Property pilates: Is it worth stretching your budget for that pretty North London pad?

There’s a lot that goes into deciding what to offer on a house sale. We’ll admit, that three bedroom garden flat on Stroud Green Road is a rare beauty. It’s been recently refurbished to boot. But do you really need that third room for your cat’s wardrobe and the basement for wrapping presents?

Weigh up the pros and cons before you dive in

If you’re well within your budget then make that offer post haste, but we’d steer clear of throwing the kitchen sink and all your savings at property before weighing up all the pros and cons first. We don’t just mean financially, either. From asking prices to making sure you’ll be living comfortably post-sale, here’s our decades-old sage advice when it comes to deciding what to offer, and how far to streeeetch, for that dream pad in N4. For you and Moggie’s sweater vests.

Should I Mighty Max out my mortgage?

Although some lenders (depending on your credit history and circumstances) offer up to four and a half times your salary, you’ll be shelling out a hefty monthly fee for your mortgage. Interest rates and deposits also impact these monthly payments. It’s worth saving for a larger deposit first to save yourself in the long run. Future you will thank you.

Consider your budget

It can be tempting to throw caution to the wind on a four bed in Highgate, but take an honest assessment of your monthly budget (commuting costs, food expenses etc.) and make sure you won’t be left short should any unexpected bills* come your way. *By bills we also mean the pitter patter of tiny feet – furry or otherwise.

Well how much should I be spending on my mortgage then?

Some like to adhere to the 28% rule, whereby your mortgage payment should not exceed 28% of your earnings. This equates to roughly a week’s salary. With the average property price in North London £709,689 according to Foxtons, this often does not apply to renting scenarios, unfortunately. When calculating repayments and deciding what to offer on a house sale, it’s essential to consider your job security.

How likely it is that your salary is secure for the duration of your mortgage? So if you’re making £25k a year, then the 28% rule would suggest you’re spending around £500 per month on your mortgage (and £600 a month on bespoke woolen cat booties).

Is it wise to offer the listing price on the house of my dreams?

If it’s your Barbie dream house, chances are it’s someone else’s too. You’re up against some keen competition. Don’t get whipped up in the panic and end up putting in a stupidly high offer. Delightful though that is. You’ll also need to make sure to get an Agreement in Principle from your lender before taking the plunge with your bid. You want the seller to know you mean business.

There will be opportunities to find just as attractive a pad within your budget. It’s also helpful to consider the future desirability of a property too. Consider up and coming areas, ‘doer uppers’ etc. We can help you find them, without you going bankrupt in the process.

I don’t know where to start with my offer!

Well, you can research the property online which is a fabulous place to start when deciding on what to offer on a house sale. Online house price tools will give you an estimate of the current home value, and prices of similar homes in the area. If the gorgeous maisonette is still available, it’ll tell you how much was paid for the house when it was last sold and you can get an idea on what is reasonable to offer.

Make use of your estate agents

Try contacting your friendly and well-informed estate agent (good morning). They know the market better than anyone else. They can provide fascinating insight on realistic prices – and the best place to get an iced flat white in the area. While you’re here, take a look at our handy guide to vetting your potential new neighbourhood before making any offers.

Two pound! One pound fifty! Is it common to haggle over the price of a home?

You decide on your price, you’ve made your bid and now you wait. It’s been 24 hours and the phone rings… Boo it’s been declined. But not all is lost! This is when you reassess your budget and decide whether to increase your offer or not. You can also attempt to negotiate.

You could use your hidden appeal such as the fact that you’re not part of a chain (see our article on the perils of property chains). If you’ve already sold up your home, or you’re a first time buyer – shout that from the rooftops and see if you get a better result. Most sellers will want to avoid chain pain and sell up quicker.

Time to celebrate?

Once your offer is approved then it’s time to start celebrating! Order paint samples and slowly remember that you were supposed to budget for conveyancing fees and solicitors… congrats! Remember – buying a home, particularly for the first time, will always come with a unique set of challenges. With careful planning, however, strategic budgeting and a little help from your friends at Davies & Davies, you can successfully make it onto the property ladder and start living your best homeowner life.

For more top tips and invaluable advice, give your (expert) friends at Davies & Davies a prod and we’ll be more than happy to help.

Please note that all content contained within our website is for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, or other advice. All Content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. We advise seeking professional advice from a legal, financial, or other professional.

Contact us:

alex@daviesdavies.co.uk – Lettings Director (contact for lettings and property management)

mark@daviesdavies.co.uk – Sales Director (contact for sales, new homes and chartered surveying)

Davies & Davies Estate Agents, 85 Stroud Green Road, London, N4 3EG

Article & images by Barefaced Studios

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