Property - House rules
With property prices continuing to soar and half of UK buyers reportedly being forced out of the market, buying a home has never been costlier or more nerve-wracking. But take heart, The List’s reporters have scoured the country and consulted the experts to come up with loads of innovative ways to buy a home. Over the next six pages Karin Goodwin and Shelley O’Neill dispel the myths, uncover the bargains and provide a wealth of top tips.
Buying property - the very words are enough to strike terror into your heart. Horror stories hang on every street corner. In Edinburgh a humble council house in Stenhouse attracted 720 bids last month, while in Glasgow a one-bedroom flat recently went for 50% over the asking price.
The property boom that took hold in Scotland almost a decade ago has been unrelenting, with prices rising by 9% in the past year alone. In the capital, the price has nearly doubled since 2002. According to a Joseph Rowntree Foundation report produced in December 2006, 50% of first time buyers across the UK have been priced out of the market. With average prices of £229,600 in Edinburgh and £143,600 in Glasgow it’s easy to see why.
Set against this backdrop, what starts out for many as a hopeful hunt all too often turns into months of anxiety, disappointment and frustration - a battle with a seemingly unbeatable offers over system, fuelled by endless solicitor and surveyor fees.
But there are ways and means of taking the sting out of what is widely acknowledged to be one of life’s most stressful experiences. From lawyers and estate agents to architects and auctioneers to television property experts Kirstie Allsopp and Phil Spencer, we’ve pumped those in the know for their hot tips. We’ve also spoken to alternative homeowners across the country whose response to the property boom has been to think creatively about what they could own, and where they could own it.
So, whether you’re looking for a starter flat with investment potential, a smart city slicker pad, a country home for all the family, or even a houseboat, read on for inspiration.
Buy with friends
Buying property with friends is an option worth considering if you are unable to afford a mortgage on your own. Chris James, a 31-year-old photographer, first tried to buy a flat in Glasgow a couple of years ago, but gave up when he realised how little he could afford. ‘I saw some terrible hell holes where you couldn’t swing a cat,’ he explains. When even the grubby flats that initially appeared in his price range were going for around 40% over the asking price, he called off the search.
Over a year later he discovered his friend Sarah was also struggling to afford her own home and the two decided to take the plunge together. After a brief and concentrated search they opted for a two-bedroom flat in Dennistoun in Glasgow’s east end, which cost around £110,000. The agreement was simple - everything would be split down the middle from initial costs and deposit, to mortgage repayments and profits when they eventually sold up.
‘It was all quite straightforward,’ says James. ‘The benefits of buying together weren’t just financial - it helped to have two pairs of eyes and it was good to share the stress.’
Buy in a cheap area to get a foot on the ladder
The easiest way to get a foot on the property ladder, claim the experts, is to buy in a cheap area before selling and moving to a more desirable location, by which time you should have enough for the deposit.
According to ESPC figures first-time buyers in Edinburgh should consider areas such as Wester Hailes where flats have average selling prices of £67,860. Pilton, Granton, Duddingston and Prestonfield are also areas where flats can regularly be found for under £100,000.
There are plenty of options in Glasgow too. In the east end prices are around half of those in the west, according to the GSPC. With the BBC due to move to Pacific Quay this summer, it might be time to look to Govan or Ibrox for investment potential.
Build your own
An increasing number of people are responding to the over-heated property market by building their own. With the arrival of the kit house - the most famous of which is the Ikea flatpack home - this no longer needs to be as expensive or complicated as it once was. Plots can be difficult to track down but there are lots available and land without planning permission can be extremely cheap. But make sure you are buying the whole plot and be aware that the council may own a section of pavement or road that you can’t use for access to your new home.
Expect to pay from £20,000 for half an acre and from £80,000 for the plot, kit and construction. You can save up to 50% on the price of a home and have input into aspects of the design.
Fleming Homes (Fleminghomes.co.uk, 01361 883785) in Berwick offers a range of kit properties from £13,000 together with advice on mortgages and plot searches as does Build Store (www.buildstore.co.uk, 0870 870 9991). Both companies report that business is booming and they are currently experiencing their busiest year on record.
If buying outwith the city limits, you may qualify for a Communities Scotland Rural Home Ownership Grant which covers up to a third of the cost of the build and which will be written off if you live in the property for ten years or more.
David McCraw built his house using a kit from Fleming Homes. He says, ‘It’s really straightforward. I found a plot of land without any trouble, for £30,000, and it was reasonably easy to get planning permission. We got a self-build overdraft. There’s no way I could have bought a property like this otherwise. It saved me more than a third of what I would have paid otherwise.’
Buy with an investor
If you’d rather live alone, buying with an investor is an option. But whether you strike a deal with a parent, a friend or an acquaintance, make sure you have a rock solid legal agreement, warns Professor Robert Rennie, lecturer in conveyancing at Glasgow University and partner at Harper MacLeod in Edinburgh. ‘I’ve been in property for 35 years and in my experience money and friendship do not mix,’ he says.
He also advises looking carefully at the terms of the mortgage to check that it is appropriate for people planning shared ownership. ‘There might be an issue where there is a sleeping partner as there is a standard lending condition used sometimes that states you must live in the property,’ he explains. ‘You need to make sure you look at the different types of mortgages thoroughly and chose the right one.’
Think big and rent out rooms
Another option is renting out a room in your home. This is easy to organise although a legal lease will have to be drawn up. Renting out one room could cover a substantial part of your repayments. Some mortgage lenders will agree to take your tenant’s rent into account as extra earnings, allowing you to take out a bigger mortgage. The government has launched a rent a room scheme which allows you to earn up to £4250 a year in extra earnings without having to pay tax, so one lodger paying £350 per month would be under the tax-free entitlement. You can claim expenses for cleaning, maintenance and utility bills.
Ali MacGregor, 32, an assistant TV producer bought her three-bedroom flat in the west end of Glasgow with the help of her parents and rents out a room.
‘I soon realised that buying a bigger flat and renting out a room was going to work out to be cheaper for me because I would be sharing all my bills and running costs.’ she explains. ‘I’ve usually rented to friends or friends of friends, who come with a recommendation. Though I ask for a month’s deposit I’ve never had to keep that for any reason.’
As well as enjoying the company, MacGregor says the best thing about this arrangement is the flexibility. ‘It’s the type of home you can grow into. That means I can gradually invest money doing it up and making it just the way I want it.’
Buy at auction
Buying at a property auction can be a way to find something totally different, from an old railway cottage to an abandoned warehouse. Sales are held regularly in Glasgow and Edinburgh. When buying at auction the property is equally available to all interested parties and there is no chance of the seller pulling out at the last minute if they receive a higher offer. All the legal work and surveying is completed before the auction so the sale is arranged quickly and you own the property from the date of the auction. You can arrange a viewing prior to the auction and auction houses have details of the properties including photographs.
‘The golden rule of buying property at an auction is do your homework,’ says Shaun Vigers, director of SVA property auctions. ‘Make sure you know exactly what you’re buying and that your finance is already in place because, once you’ve bought, the process moves quite quickly.’ Buyers should stick rigidly to their budget, despite the temptation to go higher. A down payment of around 10% is usually required. The Royal Institute of Chartered Surveyors (www.rics.org) has a good online guide.
Susan Pask and her husband James who live in Newport-on-Tay, Fife, scoured the auction catalogues for months before buying Wormit Reservoir’s old service building for £80,000.
‘My husband is an architect and I’m a designer, so we were in a good position to find something that needed a lot of work,” she explains. ‘When we saw the building it immediately appealed to us, and though we didn’t get it surveyed independently we were able to see that it was structurally sound enough that we could fix any problems.’
The building they bought was just a shell but the views over Wormit right down the river Tay took their breath away. The renovation took nine months. ‘Lots of people do it but you just need to look at a programme like Grand Designs to see how easily building costs and budgets can spiral out of control,’ she says.
Though the Pasks won’t reveal how much they spent, it was completed on budget and they feel they truly got a bargain. ‘The great thing about buying at auction is that you can get something really different,’ says Pask. ‘I’d definitely do it again if something interesting came up in the right situation.’
For those who don’t want to get their hands dirty, buying a new build can seem appealing. But purpose-built luxury apartments don’t come cheap. One way to bring the price down is to buy off-plan. ‘Buying off-plan is a relatively recent trend,’ says Mark Hordern of GSPC. ‘Ten years ago you would have at least expected to see the show flat.’
One of the main benefits is that if you get involved at an early stage you can choose fixtures and fittings and avoid paying VAT on any extras. Despite fears that a glut of buy-to-let flats in the completed development might lead to a reduction in value, Horden believes that, in the long-term, it is unlikely that an individual purchaser will lose out - the finished flats still usually fetch more on the open market than at planning stages.
Fiona Duff, who runs a PR firm, bought her Edinburgh flat, converted from a new town hotel, from the architect’s plans and believes it can be an excellent way of getting what you want for less than you’d pay at a later stage.
‘The great thing was I got to make lots of choices about what colours were used and the tiles on the wall and so on,’ she says. ‘When the flat opposite me went on the open market it went for considerably more than I paid.’
Rescue a wreck
By far the cheapest way of getting exactly what you want is to buy a wreck, roll up your sleeves and do it yourself, especially if you are handy with a hammer, or have good contacts in the building trade. Do always bear in mind how important a strict budget and a good contingency fund are in any large-scale project. That said, it can be a way of picking up a fantastic and unique property, such as the kind of listed buildings which are included on the Buildings at Risk register run by the Scottish Civic Trust (see www.buildingsatrisk.org.uk). Remember that there may be restrictions on the type of improvements you can make - Historic Scotland offers help and advice on 0131 668 8716.
Take to the water
Restoration and clean-up work started on Scotland’s canals in 2000 and the network has been open for around five years, breathing life into the country’s waterways. British Waterways Scotland (www.britishwaterways.co.uk) has granted fulltime residential moorings to barges in Glasgow, Bowling, Crinan, Ratho in Edinburgh and Auchinstarry near Kilsyth and there are still plenty available. Houseboats can be surprisingly large and relatively inexpensive, starting at around £40,000. Would-be water babies should start their search by contacting BWS. Marine mortgages can be expensive and have higher interest rates, but boats are not as expensive as houses. A personal loan might be enough to cover the start up costs.
To live on the water, you will need to pay mooring fees of £100-150 per foot of the boat’s length, which are the nautical equivalent of council tax, and a boat licence, which costs around £100 per year. Residential moorings are not easy to find but they are cheaper than most rents and running costs are exceptionally low. You can run a surprising number of household appliances from the boat’s 12 volt battery so you don’t have to sacrifice too many home comforts. Moorings have facilities similar to campsites so you can use their electricity, rubbish collection, washing machines and even have your post delivered there.
For Claire Blackler, 33, from Kent, a houseboat offered the perfect solution when her husband Paul, a pilot, was offered a job with Loganair. The Blacklers bought a 60ft by 7ft narrow boat with mooring at Auchinstarry Basin on the Forth and Clyde canal for £60,000 with the help of a mortgage.
The boat has separate kitchen and living areas, two bedrooms and a shower room - as well as diesel-fuelled central heating and a telephone line. A washing machine is provided in the onsite washhouse.
While her husband commutes to work in Glasgow, Blackler runs her wine tasting business from the boat. Last August they sailed the boat to Edinburgh Quay and moored it there for the three weeks of the festival. ‘It was fantastic,’ she enthuses. ‘We went from peace and quiet to the hectic pace of the city in a few minutes. We could go out to shows and come home to sleep on the boat every night. Living on a boat gives you a lot of freedom and flexibility.’
Distillery worker Alex McMicking bought his houseboat for £25,000 and spent around £10,000 doing it up. He is moored at a basin between Kilsyth and Croy. ‘I couldn’t possibly get a mortgage,’ he says, ‘and this was one of the only options available to me. I got a personal loan to cover the cost and I know that these boats, fitted to the standard that I have here, can sell for twice that amount.
‘Running costs are much cheaper than a house and it’s surprisingly comfortable. I’m in the countryside but less than an hour from Glasgow and Edinburgh and even closer to Stirling. I work in the west of Glasgow and it’s so easy to commute. It’s even better when I finish work and I can come home and just go for a sail up the canal. It’s a beautiful area and the views are stunning. It can be really windy but you’re right in the countryside so it’s really peaceful.’
Avoid the open market
An increasing number of solicitors are now offering a private sales service. While buyers should be prepared to pay what would be considered a good price on the open market, this can provide access to the rarely available properties that are usually quickly snapped up.
Barbara Armstrong, property manager at Maxwell MacLaurin solicitors in Edinburgh, helps buyers track down choice finds before they hit the market. ‘Some types of properties are very hard to find, for example a new town flat with a garden,’ she says. ‘But no matter what my clients’ requirements are I’ve always found a suitable property within four months.’
Minimise your long term costs with an eco house
Ethical living is a priority for a growing number of house buyers. Ron and Liz Johnston recently bought an eco house in Carnoustie which was commended in the Angus Design Awards for New Builds. The property is built from sustainable timber, has solar panels and is heated using an under-floor hot water system. A tank in the garden collects storm water which is recycled for household use. ‘The house was very reasonable to buy,’ says Ron. ‘Now we are in, it’s pretty much maintenance-free. We are happy to be minimising our impact on the environment, and we save a small fortune on bills.’ For information see www.bruntondesignstudio.co.uk or www.sci-scotland.org.uk/consultancy.php or www.arc-architects.com
Try a shared ownership scheme
The Scottish Executive’s shared ownership scheme, which was launched in 2005, allows single prospective buyers earning under £19,700 or those in larger households earning under £25,100 to buy a stake in their home, purchased jointly with a housing association.
Applicants take out a mortgage for part of the property, typically between 60-80%, and the government owns the rest. After two years you are entitled to increase your share of the property. Profits will be split accordingly when the property is sold. The option to buy a stake in an open market property, previously only available in Edinburgh, is now being rolled out across Stirling, Aberdeen, Moray, Perth and Highland local authorities. Communities Scotland (www.communitiesscotland.gov.uk) will guide you through the application process.
Sonney Murray took on a shared equity scheme after splitting from her partner. She says ‘It was the only way I could get on the property ladder. Renting felt like a waste of money. I’d rather own 60% of something than 100% of nothing. I hope to increase my share of the property, but selling even 60% would leave you enough profit for a deposit on a full mortgage. I have a son so the security of owning something is very important to me. I would definitely recommend this to anyone.’
The experts’ view
Kirstie Allsopp and Phil Spencer from Channel 4 series Location, Location, Location give their top ten tips for buying a property
Put yourself in a strong position
Before you view any properties, make sure you know your budget and get yourself a mortgage promise in place. This will show the seller that you are a serious and eligible purchaser.
Remember all the costs
As well as the purchase of the property, remember to budget for the extra costs, including the survey and conveyancing costs. Get a solicitor in place early so you can shop around for the best quotes.
Viewings - get in there quick
Don’t just check websites, talk to the agents - they will know what is coming onto the market. It is best to get in there quick and view properties asap, as being the first to see a property gives you a head start.
Know what you want but be prepared to compromise
Having a clear idea of what you want before you go through the front door is great, but make sure this doesn’t close your eyes to potential. Being realistic is also key - you may want four bedrooms for £100k but that doesn’t mean you’ll find it.
Don’t be put off by other people’s taste
Even if avocado walls aren’t to your taste, don’t let décor get in the way of recognising a good property: a lick of paint and it could be as good as new. Also, don’t be swayed by a swanky interior - you can buy that flat screen later. The ‘feel’ of a house is important but you also need to make sure that the practical considerations have been covered - check when the property was last rewired, the central heating was fitted, whether it has been damp-proofed, and if you already own furniture then take a tape measure.
Get to know the area
Make sure you check out the area before you buy. It is a good idea to visit at different times of the day - a quiet residential area by morning could turn into a party hot spot after dark. Issues such as safety, proximity to shops, transport links and the neighbours could alter your experiences. Also, check with the local authority if any developments are planned that could affect your property.
Surveying is the way
A survey is the best way to identify any potential defects in a property. While a valuation survey tells you what the property is worth it will not highlight problems. Getting a building survey on older buildings may be a big pay out, but could save you thousands in the long run.
Getting the offer right
Offering in Scotland can be a tough business. Do your research and check out sold prices for the street and area, as well as gauging what the correct offers over percentage is for the area by speaking to agents.
Once a property goes to sealed bids you need to decide what it is worth to you. You won’t know how many people you are up against or their financial position, but you can do your homework and make sure the entry date you give suits the seller. Also don’t bid in round numbers, you have more of a chance of your bid being accepted by the vendor if you put in an odd figure.
Consider the re-sale
If houses have been on the market for a long time, find out why. Is it a noisy area; is it on a busy road? Anything that worries you now will worry future buyers too.
Areas to look at - Edinburgh
Gorgie & Dalry
Average price for one- and two-bed properties £108,000
Annual increase 17.7%
Amenities These neighbouring areas boast a lively centre with lots of shops and small businesses. There are many classes and events organised by the local council. Hearts Football Club has its ground here, at Tynecastle.
Transport The city centre is a 15-minute walk, or a five-minute bus ride, away. The busy Haymarket train station is close by and is served by trains journeying across the UK.
Social There are many pubs and shops in Gorgie and Dalry, and nearby Fountainbridge boasts a multiplex with a cinema, bowling alley, bars, restaurants and bingo hall. There are also bars and restaurants on the redeveloped canal front.
Positives Popular with first time buyers as there is good value for money. Strong community spirit with an active council.
Negatives House prices are rising fast and this trend looks set to continue.
Average price for one- and two-bed properties £122,000
Annual increase 7.3%
Amenities There are more than 200 shops and businesses in this traditional seaside resort, as well as two high schools and two primary schools. The Victorian swim centre has a gym, Turkish baths and outdoor swimming pool.
Transport Trains and buses are frequent between the city centre and Portobello though traffic can be very heavy. Buses take around 20 minutes and road links are good on the A1.
Social Portobello doesn’t have an enormous selection of pubs and restaurants but the situation is improving.
Positives The seaside location, leisure facilities and thriving local businesses make this a lively place to live. The shops in Portobello range from bakers and banks to pet shops and travel agents.
Negatives The traffic can be a nightmare and there’s a conspicuous lack of pubs or entertainment venues.
Average price for one- and two-bed properties £101,000
Annual increase 11.2%
Amenities Close to Telford College and home to the ongoing Granton Waterfront Project, a £1 billion scheme incorporating homes, offices, hotels, schools, a new network of canals and walkways and a number of public squares. Ocean Terminal, with its shops, cinema, bars and restaurants, is within easy reach.
Transport Granton is on the coast of the firth of Forth and buses run regularly to the city centre which is a 20-minute journey away. Transport links are being improved as the area is developed and Granton is on the list of locations likely to be served by the new tram network.
Social Mostly centred around old-fashioned local pubs but there are one or two newer bars appearing.
Positives The area is constantly being improved and the Waterfront development looks set to increase the number of houses and businesses. A good investment opportunity for early buyers.
Negatives New developments are still under construction and the Waterfront Project will be ongoing for another ten years so one for medium rather than short-term investors.
Areas to look at - Glasgow
Average price for one- and two-bed properties £94,246
Annual increase 43%
Amenities Duke Street and Alexandra Parade have shops selling everything you could possibly want. There is a full calendar of community events and Scotland’s first 24-hour gym.
Transport If you’ve spent all night at the gym and are too tired to walk, there’s an excellent bus service to the city centre and good road links to the M8.
Social Glasgow city centre is a ten minute walk away and Dennistoun itself has many restaurants and bars. Delis and trendy coffee bars are springing up, which is always a good indicator of an area on the up.
Positives Dennistoun is easily accessible and the emergence of lots of new bars, restaurants and cafés has attracted young professionals and students.
Negatives There is a brewery nearby and some areas are still under construction while large patches of waste ground are still waiting to be snapped up.
Average price for one- and two-bed properties £131,006
Annual increase 4%
Amenities The Tramway theatre, Pollock Park and the Burrell Collection are all within easy walking distance, there is a busy shopping arcade and several schools.
Transport Good train and bus links to other parts of Glasgow. It is also close to the centre and Pollokshaws Road runs directly to the city.
Social Shawlands has its own buzzing nightlife with lots of clubs, pubs and restaurants. Tusk bar and nightclub attracts people from all over the city.
Positives Very accessible and a hub of activity day and night.
Negatives House prices are rising as Shawlands is growing increasingly popular with buyers. The area contains a diverse range of properties so visit the patch you are interested in at different times of the day before buying.
Scotstoun & Thornwood
Average price for one- and two-bed properties £133,700
Annual increase 13%
Amenities Good primary schools, lots of parks and the large percentage of houses with gardens make this a family friendly area. Scotstoun also has an international sports stadium.
Transport Close to the city centre and served by good bus and underground links. Car owners have easy access to the Clyde expressway.
Social The lively west end is particularly close and Dumbarton Road has a strip of bars, cafés and restaurants.
Positives Scotstoun is in a conservation area so the green spaces will remain that way.
Negatives Not typically a first time buyer area but many properties are reasonably priced. The west end is increasingly popular and house prices here are likely to soar.
Areas to look at - Outside the cities
As house prices in Glasgow and Edinburgh continue to rise, many buyers are moving to outlying areas within commuting distance of the city where they are guaranteed to get more for their money.
Buyers forced out of Glasgow are moving west to Paisley where the average house price is £110,000, only a 5.9% increase on last year. Scotland’s largest town is only ten minutes from Glasgow by train and has the popular Braehead shopping centre on its doorstep.
Other popular areas are Airdrie and Coatbridge which lie to the east of Glasgow. Coatbridge has seen large increases in house prices in the last year although the average house is still under £100,000. The trend looks set to continue as road links to Glasgow via the M8 and the M74 are excellent.
With an average property price of £115,000, Musselburgh in East Lothian is an attractive option for people keen to escape the soaring house prices in Edinburgh. West Lothian is also growing in popularity, with towns such as Linlithgow, Bo’Ness and West Calder experiencing a surge in buyer interest. House prices in West Lothian are the lowest in the Lothians with a typical one- or two-bedroom flat costing less than £97,000. Again, links to Edinburgh via train and motorway are very regular.
Diary of a flatbuyer
August 2006 I’m staring at a pile of dirty dishes, questioning how my flatmate can make so much mess. After ten years of flat sharing I’ve become intolerant. It’s time to surrender my financial independence and accept my parents’ offer to help buy my first place.
September 2006 The ESPC website, repopulated every Monday, becomes my weekly lunch date. With hundreds of properties up for grabs it’s hard to know which are worth investigating. I start by drawing up a wish list that would make Kirstie and Phil proud.
October 2006 Over 20 flats all over Edinburgh viewed and rejected before a compact but cosy, third-floor flat in Canonmills springs up. Offers over £77,000. What to bid? ‘Around 20% over the asking price depending how much you like it,’ I’m advised. Except this is Edinburgh, home of outrageous property prices and my offer is obliterated by another that’s 50% over the asking price.
November 2006 Two properties come up, one in Tollcross, the other down the Union Canal by the old brewery. We’re outbid again, the second time by £200. Aaaaarrrrrggghh. I start to doubt whether I will ever get lucky.
December 2006 Perhaps ‘fixed price’ bidding is the way forward. I view an unusual apartment in a 1930s Art Deco building. Having expected to hate it I end up emailing the estate agent to express interest. On following up in the morning I’m told the flat was sold three days ago.
January 2007 Wanted. Basic one bedroom flat, in reasonable part of town, for careful lady owner. Must not have wonky floor, damp or kitchen the size of postage stamp. (Apparently there’s nothing matching this description on the market right now.)
February 2007 Another flat comes up in Tollcross. There’s no schedule online and it’s stretching the budget, but I go and see it anyway. Décor aside, the flat is packed with potential. I’m advised to have a survey done first as this will make our offer more favourable if it goes to the wire, and it’s certainly helpful to know how much the place is worth on paper when deciding what to bid. Success at last!
March 2007 It may lack heating and need some TLC but this is the place for me. Post-celebrations my attention shifts toward mortgages, stamp duty and solicitors’ fees. It’ll be late May before I get my hands on the keys but, as I now realise, when it comes to finding your first place, patience is everything.