Buying Your First Home in 2017 – What to Expect as a New Homeowner

Buying Your First Home in 2017 – What to Expect as a New Homeowner

February 27, 2017

Buying Your First Home in 2017 – What to Expect as a New Homeowner

This year, thousands of people will become homeowners for the first time. Throughout our guide to buying your first house we’ve talked about the importance of budgeting, of finding the right house for you, how to reach an agreement on price and how to bring the sale to completion. The end goal of all this has been to finally have a home to call your own, where you can live comfortably and happily – however, one aspect we’ve not discussed is what to expect as a homeowner.

If you’ve been renting all your life, you’ll be used to a certain set of responsibilities; as a private tenant, you aren’t responsible for the majority of the property’s maintenance, and the landlord (or their property manager) will be on hand to arrange repairs. Once you own the house, though, it’s your job to keep everything shipshape, and you’ll find that the scope of your responsibilities increases greatly. This guide will help you to understand just what it means to be a homeowner, and highlight some of the most important issues which can arise when you own your own property.

First Steps

There are a few things you’ll need to start thinking about as soon as you’re settled in to your new home – really, you’ll want to start preparing for these ahead of time, but you won’t necessarily need to act on them until you’re actually unpacked and in place. Make a list of these tasks and make sure you take care of them in the first couple of weeks:

Change the locks: As soon as you’re living in a new home, you need to swap out the old locks for new ones. You just don’t know who has a copy, or where any spare keys ended up – whether you decide to fit these new locks yourself, or have a professional locksmith do it, make sure this is sorted out as quickly as possible.

Check your billing address: All your utilities will need to be set up for your new home, which means ensuring that each and every one of your service providers knows where you’ve moved to. The process of setting up utility supplies to your new property will require that you inform them of where you’re living, otherwise they won’t be able to provide your services. However, you’ll also need to update your bank with your new address, so that they don’t send correspondence to your old home.

Service Checks: One of the first things to take care of in your new home is to make sure that every piece of equipment is working properly. You’ll need to arrange for qualified technicians to carry out tests on your electrical systems, gas equipment and boiler, to ensure that they all meet the necessary standards. Without these checks, you can’t be certain that these vital parts of your home are working properly, which can be dangerous if not caught early.

Labelling Circuit Breakers: Your home’s circuit box can be a complete mystery if it’s left unlabelled. If you ever run into electrical problems, you won’t want to be flipping switches on and off to see what’s connected to what; one of the first tasks to take care of should be adding little labels to each switch so that when you need to use the circuit board, it’s easy to do so. Taking the time to do this now, in a low-stress environment, means you won’t have to struggle with it later, at a time which might be more stressful.

Redecorating

Even if you’ve bought a hideously decorated 1970s-era house, redecorating shouldn’t necessarily be the very first thing you do when you move in. It’s a big task to take care of, and the stress associated with moving into a new home, rearranging your life and getting settled again is bad enough without the added hassle of redecorating a room. In many cases, you’ll be better off waiting until the dust has settled before you begin redecorating, and your opinion of the decor might even change with familiarity – what seemed like it needed stripping out and redoing might in fact only need some subtle changes.

This also goes for remodelling; if you intend to make major changes to the property, it’s not always best to do this as soon as you’ve moved in. Give yourself a little time to become accustomed to your new home before you start the lengthy process of improving it.

Maintenance

As a homeowner, the buck stops with you; if something needs to be sorted out, you’re the one to sort it. This means you’ll either have to take care of it yourself, or contact a local professional to help you with it. For many people, a certain amount of DIY isn’t too tall an order, but the extent to which you’re able to make repairs will depend on your skills and experience. Some homeowners might be perfectly happy plastering their walls, or repairing furniture, but others might not have the time, skill or patience to do this themselves.

When carrying out repairs, it’s important to ensure that whoever does the work is properly trained for the job. This means finding a reputable contractor, and in the modern day there are dozens to choose from – if you can’t find someone with a suitable rating online, ask friends and family for recommendations. Remember that not all firms will work to the same standard of quality, and you’ll get what you pay for; sometimes the cheapest option isn’t the right choice.

If you’re having major work done, you must be sure to get several quotes ahead of time. Different contractors specialise in different areas, and prices for their services can vary considerably; check several competitors to make sure that you’re getting a good deal. You should also receive a written confirmation and receipt of the work that’s carried out, which isn’t just important for your own records. If you come to sell the property later on, you’ll need to provide evidence that any major work was carried out by a reputable contractor, and provide a means for the new owners to contact the original workers.

Building Insurance

One crucial area which homeowners often underestimate is their building insurance policy. This is the policy which covers your property against damage, and helps pay for repairs if they become necessary. Often, mortgage providers will require that you have a building insurance policy in place as part of the conditions of your loan, because without this it’s possible that the property will be too expensive to repair.

The exact terms of a building insurance policy can vary considerably, depending on the type of cover you require, but they generally provide some sort of guarantee against structural damage. This could be in the form of a fire, a storm, an accident or pure bad luck, but if the worst happens you’ll need to know that you’re covered. It can be intensely expensive to repair a property which has suffered extensive structural damage, and if it’s become uninhabitable you’ll also need somewhere else to live whilst it undergoes repair; many insurance policies pay for alternative accommodation to be arranged for the duration of repairs.

Ground Rent and Service Charges

If you own the freehold on your property, this section won’t apply to you, but if you have a leasehold, keep reading. If you’re not sure, the vast majority of flats in the UK are leasehold, while almost all houses are freeholds (with the exception of homes purchased under the Help to Buy Shared Ownership scheme).

Leasehold properties are, as the name implies, leased from their owner, and though the lease term is very long (usually about 125 years), the contract requires that the tenant fulfils certain obligations. There are two main costs to consider here; the costs associated with the leasehold itself, and the costs incurred by maintenance of the property.

Ground Rent:

Ground rent is a fee paid by the tenant to the freeholder every year, which represents the nature of the relationship between them. In broad strokes, this exists because there is a landlord/tenant relationship in place, and this contract must require a regular payment to be made. Since it’s mainly a symbolic payment, the ground rent is usually fairly low, a few hundred pounds a year, but be sure to check the terms of your leasehold agreement; it’s not unknown for landlords to stipulate that the ground rent doubles each and every year, quickly making your property very expensive.

Ground rent can sometimes be reduced to a “peppercorn”, often as part of the terms of a lease extension. This is a minimal payment to represent the tenant/landlord relationship which exists between you and the freeholder, and can be as low as £1 (originally, this would actually be a peppercorn, but it’s the rare freeholder who’ll accept payment in pepper these days).

Ground rent is a fixed payment to be made each year. However, the costs of contributing to maintenance of the property are not fixed, and can vary each year depending on how much work needs to be carried out.

Service Charges:

As a leaseholder, you own a small portion of a building, typically a flat in a larger block. The maintenance and repair of the inside of your flat is your own lookout, and as a homeowner you’re entirely responsible for its condition.However, there are many facilities in a block of flats which require upkeep, but aren’t part of any one property; the roof, the lifts, the fire alarms, lighting and access systems, for example. These all need looking after, and the costs are divided up amongst all the leaseholders in the building. This additional charge can amount to quite a lot, but because it’s spread over so many contributors it’s often more economical than a homeowner who has to repair their own property.

However, since you’re responsible for keeping the entire building in good repair, it’s possible for costs to fluctuate depending on the work which needs carrying out. In a good year, the property might not need any major repairs and your service charges could be kept low. If you’re unlucky, though, a new lift might be required, or even a new roof. The expenses associated with this work will increase your service charges drastically, and you might find this to be an unwelcome burden.

To help you predict what your service charges are likely to be, try and meet with other occupants of the building before you move in. They should be able to give you an idea of the building’s general condition, and the average annual service charge costs. If the building is in good condition and service charges are relatively low, this is a good sign, but if it’s in bad repair it could be a sign that major work will need to be carried out soon, and your service costs could increase significantly.

The terms of your lease should make it clear what you’re expected to contribute towards, and how much this is likely to cost you. Pay attention to how this will affect your budget, and whether the price of living in a leasehold property will make it hard to afford your mortgage payments.

Life as a Homeowner

There’s a lot to consider when you have a property to call your own, and though there are a lot of additional responsibilities, there’s also a great payoff at the end of the day. Despite the burden of having to take care of every repair yourself, and despite the costs of home insurance and redecoration, owning your own home means you can build up equity in a property. The stability this brings, and the long-term benefits of owning a home, means that despite all the difficulties associated with finding, buying and living in a home, there are lots of reasons why you should buy your first home in 2017.