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Property panic-buying could be the path to home-buyers’ regret

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  • HALF of UK home-buyers who bought during pandemic regret how much they paid
  • Nearly a QUARTER of home-buyers paid over the asking price during the pandemic, compared to 8% in the previous 12 months
  • 94% of pandemic property purchasers* felt under pressure to buy quickly, taking 46 minutes to view
  • Two fifths of home-buyers viewed their properties in person between March 2020 and June 2021
  • NINE OUT OF TEN people who bought during the pandemic found problems with their properties after moving in – compared to 69% of all home-buyers surveyed

Property panic-buying could be opening the door to homeowners’ regret, according to new research from Aviva.

The insurer interviewed 2,200 UK homeowners, ranging from people who had bought this year, to those who had purchased prior to 1997. The sample included 500 home-buyers who had agreed a sale between March 2020 and June 2021*.

The study found more than two thirds of house buyers (68%) felt under pressure to buy quickly when purchasing their latest property, rising to almost all buyers (94%) who agreed sales during the pandemic*.

In most cases, people made one of their biggest financial decisions after looking at their prospective home for less than an hour. The survey found people spent 40 minutes viewing their property before opting to buy – although this figure was slightly higher for those buying during the pandemic, taking typically around 46 minutes. Fifteen per cent of viewers felt confident of their decision after less than 20 minutes.

26%

One in four buyers felt one viewing was sufficient

On the whole, people usually viewed their property twice before putting in an offer (44%).

Under pressure… reasons for a quick decision

Those who bought quickly, did so for a number of reasons. People buying during the Covid pandemic were mostly swayed by the stamp duty holiday (34%) although many also stated they didn’t want to miss out because properties were selling so quickly (32%). A similar number (30%) said they had lost out on other properties because they hadn’t made an offer quickly enough.

Regionally, people were most likely to feel the need to buy quickly in London, where 85% of buyers said they felt under pressure. This compares with just 52% of people in the north east who said the same.

In-person house viewings fall – but not just during the pandemic

The study also discovered many buyers didn’t actually see their new home ‘in real life’ before choosing to buy it.Between March 2020 and June 2021, only around two fifths (42%) viewed their property in person, instead relying on video viewings (33%), photos (36%) and written information (36%).

While the pandemic has undoubtedly had an impact on physical viewings, the Aviva study suggests the number of people seeing properties in person was already falling. Prior to February 2017, more than four fifths of buyers saw their new homes in person. However, the Aviva study suggests this has fallen over time:

Date when sale was agreed

Percentage of people who viewed their home in person

2020 March - June 2021

42%

March 2019 - February 2020

42%

March 2018 - February 2019

56%

March 2017 - February 2018

63%

March 2007 - February 2017

83%

March 1997 - February 2007

84%

February 1997 or before

87%

HALF (50%) of pandemic purchasers* (who agreed a sale between March 2020 and June 2021) say they regret how much they paid for their properties. This compares to just 12% of home-buyers who bought their property before February 2017.

In line with this, people who bought during the pandemic are most likely to have paid over the asking price for their property. Almost a quarter (23%) who bought between March 2020 and June 2021 said they agreed a figure over the asking price. This compares to just 8% in the 12 months prior to March 2020.

From poor plumbing to noisy neighbours: further reasons to regret

On top of the financial regrets, seven out of 10 home-buyers also found property problems that they didn’t notice while viewing. In the case of pandemic purchasers, this figure rises to a staggering 92% of buyers.

Property problem discovered after purchase

Percentage of all home-buyers finding this problem

Percentage of home-buyers during pandemic finding this problem

Repairs costing more than expected

11%

14%

Furniture / fittings had covered up faults

11%

13%

Tatty appearance / in need of decoration

10%

12%

Poorly insulated home

10%

10%

Poor plumbing

10%

9%

Poor electrics

9%

8%

Damp / mould

9%

10%

Leaky / draughty windows or doors

9%

8%

Noisy neighbours

8%

11%

Busy traffic

7%

11%

In addition, 11% of pandemic-buyers found the commute was longer than expected, 10% found evidence of possible subsidence and a further 10% had problems with insects or vermin.

The cost of putting things right

On average, people said they had spent - or expected to spend - almost £10,000 to put right the problems they discovered after moving in: £9,548 to the nearest pound. However, one home-buyer in 10 said they needed to spend more than £20,000 to deal with their property’s problems.

It can be easy to fall in love with a home on first viewing, but we’d urge people to do their homework 
Owen Morris, MD, Personal Lines, Aviva

Owen Morris, MD, Personal Lines, Aviva says: “The housing market is moving at an incredible pace, with multiple buyers for properties in many parts of the country. This is inevitably influencing how much people are paying for their homes and how quickly they are making decisions.

“But our research reveals many people are finding problems with their properties only when it’s too late. These range from more minor irritations, such as the need to decorate, to more worrying problems such as crumbling brickwork or a risk of flooding.

“It can be easy to fall in love with a home on first viewing, but we’d urge people to do their homework and proceed with caution when making one of the biggest financial decisions of their lives.”

Aviva has put together the following home-viewing checklist:

General recommendations:

Visit the property in person if it is Covid-safe to do so. Video viewings provide a convenient way to see a home, but they don’t always give the full picture, such as traffic levels or even any unpleasant smells in the home! It also allows you to see any smaller details that you might not spot via video.

Insist on a HomeBuyer Report. A HomeBuyer Report is a survey that will help to find issues with a property, such as subsidence and damp, when buying a home. Most mortgage providers will require one in order to lend, but it’s highly recommended for cash-buyers too. However, there are ‘red flags’ potential buyers can spot at the viewing stage, as outlined below:

Outside the property

Japanese knotweed: This invasive weed can spread uncontrollably and damage garden walls, pathways and even affect the structure of your home. Look out for signs of knotweed on any neighbouring land, as well as the grounds of your property.

Chimneys: Remember to bring a pair of binoculars to check from ground level. Look out for:

  • Dampness leaking into the roof space below.
  • White furry salts coming out of the brickwork or brown staining on the chimney breast.
  • A leaning / bulging chimney stack, deterioration of the mortar and displaced render or leadwork.
  • Small plants growing from the top of sides of the stack.

Cavity walls: Most brick houses built after the 1920s are constructed using two skins of brickwork with a gap between them. The metal ties between them can get wet, expand and eventually break, so the outer skin falls away from the building. Look out for: regular horizontal cracks and bulging of the wall.

Retaining walls: Garden walls aren’t always built to the same standard as the main building, so they can become unstable. Look out for leaning or cracked walls and disintegrating bricks or stonework.

Flat roofs: Flat roofs are often used on extensions, usually covered in materials like mineralised bitumen felt, which has a limited life. Look out for standing water, lifting or cracked joins or signs of vegetation growth.

Inside the property

Floors: In older homes, the joists supporting the timber floor can become damp and rotten. If this isn’t fixed, the floor could collapse as the timber ends rot. Look out for: springiness in the floor, a damp, musty smell or dampness on the wall.

Windows: Leaks around windows could mean they are in a poor condition. Look out for: signs of rot on timber windows and any signs of brittle or cracking sealant around PVC window frames.

Walls: Any signs of black mould could indicate condensation. This can be caused by too much moisture and a lack of ventilation or it could also be a sign of poor building design. Look out for: a musty smell, dampness on walls or ceilings and black or green mould, especially in the backs of cupboards on outer walls.

Bathrooms: Baths or showers with worn seals can cause significant water damage, but the problem can be solved fairly easily, as long as leaks are nipped in the bud. Look out for: cracked or failed sealant around sinks, showers and baths, as well as stains on the ceilings of rooms below bathrooms.

Timber: One of the biggest threats to timber is wet and dry rot. Wet rot can sometimes be dried out and repaired, but dry rot needs to be removed completely. Look out for: timber that feels wet or crumbly, fungal growth, any damp, musty smells.

Risk of flooding: Just because a property isn’t near any obvious water sources, it doesn’t mean it’s not at risk. When viewing a property, be sure to ask whether the property is in a flood risk area and whether it has flooded before. Sellers must tell you about any past floods and provide a flood risk report, if one has been carried out. You can find out if the property is at risk of flooding by using the Government’s flood risk checker.

-ENDS-

References

*All data relates to a study of 2,211 homeowners and those who had an agreed sale on a property, including 500 respondents who had an agreed sale between March 2020 and June 2021. For the purposes of this study, the phrases ‘pandemic purchaser’ / ‘pandemic property purchaser’ are used to refer to people who have agreed property purchases between March 2020 and June 2021. The survey was carried out by Censuswide Research on behalf of Aviva between June 10-17, 2021.

Media enquiries:

Sarah Poulter

Group External Communications

Notes to editors:

  • For information on how Aviva is helping our people, customers and communities impacted by COVID-19 visit: www.aviva.com/covid-19-our-response/
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