SPECIAL FEATURE: Buyers must not let speed triumph over sense when rushing to beat rising interest rates – Adkirk Law

Special Feature: Adkirk Law writes an article that discusses why buyers must not let speed triumph over sense when rushing to beat rising interest rates.

Time is truly of the essence for prospective buyers in the current market. With buyers aware of increasing mortgage rates, they are dashing to get deals over the line before existing mortgage applications expire. Moreover, the average cost of buying in the UK increased 9.7% between March and April of this year according to the ONS, and we could well see further increases if the market continues at its current pace. We have seen a similar panicked flurry of activity before, as last year, buyers rushed to complete before the end of the Stamp Duty holiday. Rushed transactions typically lead to avoidable mistakes, so it is crucial that buyers remain mindful of common pitfalls when looking to complete quickly.

The cost of borrowing is rising, and with the clock ticking on existing pre-rise mortgage offers, prospective buyers are (understandably) becoming increasingly worried of being priced out of the market. With the UK also grappling with a lack of available stock, buyers must be particularly cautious of not rushing into an ill-conceived purchase. Now more than ever, buyers must take every step to prepare and equip themselves for a thoroughly considered and efficient purchase – but what are the key factors they must keep in mind?

Too many buyers begin the process of purchasing a property without understanding the full extent of the costs involved and their responsibility to arrange the processes incurring these costs. Surveys serve as a prime example of this. A mortgage survey is, at its core, nothing more than a valuation carried out for the bank. Too often, buyers are not given the option to upgrade this valuation to a home buyers survey, either. Buyers should seek professional advice and ensure that they understand the range of survey types available to them before a purchase. They can then leverage these alternative survey options to ensure their purchase is as cost effective and efficient as possible.

A key aspect of knowing the full costs involved in a purchase is knowing when they are payable. Seeking professional advice and having a good understanding of this before placing an offer can be key to navigating through a purchase quickly and with minimal setbacks or unexpected costs. If clients delay in conducting their own property survey, they risk this cost coming in addition to the bank’s valuation. This is a common occurrence, and it can often lead to costs spiralling further if additional reports are recommended.

These additional reports can come in a wide range of forms, including drain reports, roof reports, and damp and timber reports. Gas and electricity certificates must also be considered, which can often be a tricky point for buyers, as many don’t understand that providing gas and electricity certificates is only the seller’s obligation if works have been carried out.

Buyers also frequently overlook budgeting for the often-expensive fees payable to a landlord or management company when purchasing a leasehold. This is a common error and can lead to setbacks and unforeseen overheads. Most leaseholds or freeholds with a service charge require notice of assignment or transfer to be served to both the freeholder and/or management company, and so in many cases separate fees are likely. Having a sound understanding and remaining mindful of what will be payable to landlords or management companies can have a significant impact on budget, and it will help avoid any unpleasant surprises when looking to complete quickly.

Ultimately, prospective buyers need to recognise that buying a property is the most expensive purchase they are ever likely to make, and the due diligence required in that transaction must meet the seriousness of the undertaking. The right advice early on can make all the difference between high but sensible costs and overrunning expenses. We all know which we would rather face.