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How to Buy a House at Auction

Buying a house at auction is a great way to get a good price and find something affordable. Many houses that go to auction need some TLC or additional input in terms of redesigning space, but if you are up for a challenge and want to create something that reflects your design goals, this is a great way to do it. Check out our top tips so that you can buy your auction property with ease!

Research Any Property That Takes Your Fancy

Taking the time to research the properties up for auction and the auctioneers that provide sales is important when choosing who to go with. It is also important to note that most auction catalogues are only published four weeks before the date of sale So, you will need to become good at checking them out quickly to give you enough time to explore any specific places that interest you.

Organise Viewings Before the Auction Date

Once you have trawled the auction guides and found a property that you like, contact the auctioneer to arrange a viewing. If the property will need a lot of work, then it is a good idea to take a builder with you or someone that can help you work out whether the investment is worth it or not. Failing to view a property can result in financial loss, and so it is essential that you check out any property you like before placing a bid.

Get a Copy of the Auction Particulars

Whilst the auction catalogue will provide you with an idea of what is for sale, the auction particulars will give you a fuller picture of the property you are interested in and can be requested from the auctioneer. If you find that the legal information lacks searches, then get these done before the auction date and make sure to ask your solicitor to check for loopholes, covenants or issues that may cause you more hassle than you had considered.

Decide on Your Budget

The thrill of bidding can result in the downfall of many auction-goers, and so it is important that you decide on your budget before the big day and then stick to it, even if you are tempted to go over! When working out your budget, think about the cost of the property plus any work that will need to be done to get it up to a liveable standard, rather than spending all your cash just buying the place.

Have Your Finances in Place

Before you can buy at auction, you will need to have your finances in place in case you are successful. You do not need to be a cash buyer, but you will need to arrange any finance swiftly after the sale and have a deposit in place and ready to go. From traditional mortgages to auction finance, make sure that you check out all lending options before making your decision.

How Auctions Work

Finally, take the time to read the guide to auction etiquette provided by the auctioneer so that you act within the rules and achieve the outcome that you want to get. If you are new to auctions, it is worth visiting a few before you are ready to buy so that you are aware of what happens. Finally, take the time to read the guide to auction etiquette provided by the auctioneer so that you act within the rules and achieve the outcome that you want to get. If you are new to auctions, it is worth visiting a few before you are ready to buy so that you are aware of what happens.

When you are ready, we can provide you with a free, no obligation conveyancing quote from our panel of leading solicitors.

How Much Mortgage Can I Afford?

Before you apply for a home loan, you’ll first need to consider whether you’re able to afford to make the monthly repayments. However, there are more factors to bear in mind than just that. Mortgage providers look at your outgoings and income to determine whether or not you’ll be able to keep making payments if the interest rate rises or your life circumstances change.

How Does A Lender Work Out How Much Mortgage You Can Afford?

At one time, a mortgage lender would base how much you were able to borrow primarily on a multiple of your income, known as a loan-to-income ratio. For example, with an annual income of £50,000, a mortgage lender may have offered you a loan of around 3-5 times that sum, resulting in a mortgage of as much as £250,000.

Today, though, when you make a mortgage application, lenders cap that loan-to-income ratio at 4 ½ times your income. Also, they have to asset the level of monthly repayment you’re able to afford, taking into account your living and personal expenses together with your income in an affordability assessment.

Lenders also carry out a stress test into your ability to make repayments in the long term by taking into account the possible effects of rises in the interest rate and potential lifestyle changes. Should the lender believe you’d be unable to afford to make repayments under such circumstances, it’s likely they’ll limit the amount you’re able to borrow.

What Does A Lender Take into Account?

When a lender is working out the amount you’re able to afford to borrow, they look at the following:

  • Your income - including your basic income, any income from investments or pensions, any other earnings from commission, bonuses, freelance work, another job or overtime, and any financial support or child maintenance from an ex-partner. You’ll be required to provide bank statements and payslips to evidence your income. Self-employed individuals must provide business accounts, bank statements, and details of any income tax paid.
  • Your outgoings – these include credit card payments, maintenance payments, loans and existing credit agreements, utility bills, and insurance costs. You may also be asked for an estimate of living costs, including spending on childcare, basic recreation and clothing, and for some bank statements that support those figures.
  • Future changes which could have an impact – lenders will assess if you’d still be able to make your repayments if the interest rate went up, if you lost your job or couldn’t work because of an illness, or if your life changed by taking a career break or having a new baby.

How Much Am I Able to Borrow?

You’ll need to bear the above factors in mind before you consider making an application for a home loan. Although it might be tempting to try to borrow a higher amount, remember that if your life circumstances change unexpectedly, you’ll still be required to pay your mortgage, and this could tip you into debt. You’ll need to bear the above factors in mind before you consider making an application for a home loan. Although it might be tempting to try to borrow a higher amount, remember that if your life circumstances change unexpectedly, you’ll still be required to pay your mortgage, and this could tip you into debt.

Once you know how much mortgage you can afford, take a look at our conveyancing quote tool which will help you get the best deal possible on your conveyancing costs.

Home Improvements: What Are the Costs?

Whether you’re doing up your existing home or whether you’re considering buying a property to fix up, you’ll need to know what the potential costs might be. After all, you’ll need to set yourself a budget to make sure you don’t overspend.

You should also remember that you should put an extra 10% to one side to cover the cost of any unexpected expenses. Here, we take a look at some of the most popular home improvements and how much they’re likely to set you back.

Getting a Home Extension

There are several factors that come into play when considering the potential cost of a home extension. For example, its size, the amount of structural work involved and the location in the country are all important elements to consider. Roughly, though, an extension measuring 4x6m will cost around £26,000 - £34,000.

Loft Conversions

Loft conversion costs begin at about £20,000 but if a lot of work needs to be done, it can cost considerably more. For example, adding a bedroom with dormer windows and an ensuite could cost as much as £45,000.

New Bathroom or Kitchen

On average, a new bathroom will cost about £6,000 although if a lot of new plumbing will be required, it could be more. A new kitchen will be even more expensive, costing around £10,000 - £20,000, with some kitchen renovation projects costing as much as £50,000 but they can also add thousands to your home’s value.

Garage Conversion

Typically, a garage conversion will cost about £6,000 making it a cost-effective solution if you need to add more value to your home while increasing your living space.

Replacing Doors and Windows

If you’re keen to install some double glazing in your home, you can expect the cost to be about £400-£600 for a typical uPVC window. If you’re keen to opt for a metal or real wood window, the cost will be higher.

Installing Central Heating

If your home doesn’t have any central heating, it will cost about £4,000 to have it installed in a typical 3 bedroomed house. If your home already has central heating, however, it requires a brand-new boiler, it will be much more affordable. Replacing your combi boiler will cost about £2,700.

A Roof Replacement

Should your home need a roof replacement, you’ll need to pay somewhere between £4,500 and £12,000 depending on how large your property is and how much work will be required. The cost will also be determined by whether or not the rafters require replacement and which kind of tiles you’d like.

Once you’ve weighed up the costs of the home improvements that you’re interested in, you can decide whether or not the project is worth it. This is especially the case if you’re considering doing up your home before selling it – in many cases, the amount that you’ll recoup on the sale will be less than the amount that you’ve spent on getting the work done!

If the thought of undertaking your home improvements is just too much and you are considering a house move instead, take a look at our conveyancing solicitors and get a quote in under a minute here.