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House hunting – how much will you compromise?

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Whether you’re a first time buyer or already on the property ladder, most of us have to make compromises when searching for our dream home. But how far should we go – and what aspects are we happy to sacrifice?

As someone who works in the home moving sector as a mortgage adviser I’m not immune to the effects of compromise. When I bought my first property seven years ago I had to make concessions on the outside space, but in return got a decent property in a good area, with an easy commute in to work.

The second time around, my priorities had changed. I had children and outside space was crucial, as was proximity to good schools and living in a good area. We looked at properties in areas that were outside of our price range and eventually found the perfect property; the compromise this time was the fact it needed a lot of work.

Is there ever a ‘right’ house?

Recently Which? Mortgage Advisers conducted a survey looking at compromise. We asked people who had bought a house in the past five years if they had made any compromises on the property they bought, and if so, what aspects they had sacrificed. We found that seven in 10 people had made some form of compromise on their property purchase.

Compromise, no matter how big or how small, is an inevitable part of any house search. Interestingly the research found that the level of compromise between first-time buyers and those who’d bought a property before was also almost identical, at 69% and 68% respectively. In short, the perfect house that has everything you ever wanted doesn’t exist, at least not for most people.

Being able to compromise in a market where across the board house prices are rising is essential. It’s important to put compromise into perspective. It doesn’t mean giving up on a dream or settling for second best, it’s all about being flexible and realistic with your budget. For buyers who aren’t willing to compromise and instead hold out until the right property comes to market, they may find that the right property will never exist and they could be squeezed out of the market.

What we are willing to compromise on

The survey revealed that 90% of homebuyers weren’t willing to budge on local crime levels, and almost the same percentage (86%) weren’t willing to compromise on the number of bedrooms or the property’s proximity to schools.

Conversely, three in 10 people were willing to make concessions on the overall condition of the property, and a quarter were willing to compromise on its location, general layout and whether it had a garden or outside space.

Are you happy with your compromises?

Buying a home and imagining your life in that environment is an emotional experience and while many of us are resistant to compromise the research found that 89% were ultimately satisfied with the compromise they made.

While there is no such thing as the perfect property, there is such a thing as the perfect home – amazingly only 3% of those surveyed said they were dissatisfied with the compromise they made.

Compromise isn’t about settling for second best, it’s about looking at the bigger picture and being realistic about what you can afford in the market you’re looking in. The compromise I made on my second property meant we’ve had to put a lot of effort in renovating the house to the standards we wanted. By compromising we’ve been able to get everything we wanted and while it took a little longer we’ve been able to turn our house into our dream home.

What kind of compromises have you made when house hunting? Are you happy with the compromises you made or would you do things differently next time around?


The interesting thing about buying a house is that, generally, and over time, it will appreciate in value, unlike buying a car. If you buy the wrong car the depreciation is such that you will lose if you sell it and buy another. With a house there is always depreciation over the first year or two as the costs of purchase [including stamp duty land tax] and any essential non-recoverable expenditure have to be absorbed within house price inflation, but after that one would expect no loss to arise on a sale and in the case of new houses there can be a decent profit in year two but that tapers off in later years as the price falls into line with local market prices. So why do people hesitate so much if a house they like and ticks most of their boxes doesn’t exactly match their ideal specification? They could buy it and change again when a better house comes along. The elephant in the room, of course, is the upheaval of moving.

I think we should banish this word ‘compromise’ in house hunting. It’s making people feel guilty if they ‘settle’ for something less than perfection. With a few stutters and false starts the housing market is moving forward again and the lack of supply is driving prices upwards in most areas. Waiting for the perfect property is a mug’s game in a rising market so sensible people are prepared to stretch their journeys to work or accept they will have to do a place up; but these are not ‘compromises’ – they are rational and sometimes very beneficial decisions that enable people to move forward instead of being stuck in a groove of rejecting every property they see on line because of some perceived drawback. From personal experience of looking at hundreds of houses I would say that property websites are no more than a coarse filter and that most properties have unexpected extras that might tip the balance in favour. Unfortunately some have unexpected bad points but even that can be turned to a positive if the price is open to negotiation. The best way to choose a property is to view it close up with a realistic but positive outlook and be willing to adjust your expectations as you explore the market, but don’t take too long over it or else the best will become the enemy of the good.

It is true that house prices rise – your investment appreciates – but that profit is illusory unless you sell and move to a cheaper part of the country. Stay put, and the houses you would like to move into will also have gone up in price – more than yours as you usually trade up.

My philosophy was first to find a property that we could stay in for a long time; I do not relish the thought of regularly buying and selling a home, otherwise it never really becomes a “home”. That meant a small property that had scope for extension as funds permitted, in a “nice” area with a decent garden. The “dream home” is more about something homely than anything else. So extending both creates the kind of space you want, and in a style you like. In our case we did as much of the work ourselves – hard work, takes time – with a builder doing the basics.

I agree with you, Malcolm – that is a good way forward if you can do it, but I think it is not so easy nowadays as it was three or four decades ago. To start with, there are not that many properties left with enlargement potential as one thing the recession and slow-down in the housing market has done is encourage people to invest in the improvement of their homes and add value. Generalisations are always dangerous but I was thinking along the lines that a lot of typical house-hunters are on a rising disposable income curve and would be able to trade-up to a better home or the same sort of home in a better area or whatever combination of betterment suits their needs.

However many new homes are built, I think it is fair to say that most people would prefer to live in a settled community and it will take some time before the large new estates we see being built around existing towns and villages will mature to provide that degree of stability, possibly over twenty years, so turnover of stock will be a feature. I happen to think current house-building programmes are far too conservative and a ramping up of development would reduce the need for the compromises that stem from the subdivision of existing properties and the de-speccing of new developments in cities where living space is traded off against price to a degree that over time could prove bad for society.

My children would have preferred the route we took – a property with potential to improve and expand – but couldn’t find anything suitable. As you indicate, most of these older properties have been done-over already in the main areas of housing demand.

I have a problem getting round the cost of new houses. Reports of building land sales – such as sites originally destined for supermarkets that will no longer be built – suggests a cost of around £25-35k a plot. Add on say £80k to build a property and you end up with a cost of around £110-120k. Now their will be road and other costs and the developer will make a profit, but just how much is the real cost inflated? To what the local market will stand, of course.
I’d suggest a public body does some of this development, and either rents out properties based on cost to those who deserve a ‘subsidised’ house or flat or maybe offers shared ownership so the tenant can build up some capital to buy if they move on. Would save on housing benefit. I’m sure there is a flaw in this approach. But the gift of planning permission for land, and what is built, lies in a local authorities hands; they should use this to best advantage.

One of the hidden costs affecting new developments is the planning obligations imposed on them by local planning authorities. There used to be considerable scope for councils to hold developers to ransom by demanding infrastructure contributions [Section 106 payments] effectively in return for the grant of planning consent [which itself costs hundred of thousands of pounds for a large development]. The new community infrastructure levy has rationalised and generally standardised that to remove the bartering element. But the developers have to get this money back from the first purchasers of their new houses which significantly inflates the price, especially of starter homes.

I question, but still have an open mind on, whether new housing developments by the major house-builders really need to obtain specific approval for virtually every brick and tile and every layout and appearance detail, plus for numerous amendments as the scheme progresses. This makes work for local planning authorities and brings in income but it sure does slow the process down and add enormously to costs as these applications have to be professionally prepared and consulted on. I am not sure why the market cannot be left to decide what should be built at what density and to what style so long as it all complies with the relevant Local Plan, the Building Regulations and the NHBC guarantee scheme. There need to be some basic rules concerning environmental impact; protection of trees, watercourses and wildlife; road layout and drainage; density; and timescale for every development, plus the virtually standard planning conditions affecting site activity and operations. But after that I doubt if further council involvement adds any value to the community whatsoever.

John, I would not like to let developers loose with no control over the building style or appearance. One job of planning is to ensure that buildings fit in with an area. However, I say that tongue in cheek because I believe some planning committees may lack the taste necessary and may well be subject to “pressure”.

Clearly infrastructure needs to be provided for very large developments – school, surgery (no longer library perhaps), roads. lighting but I doubt the additional cost per house is huge.

I would much rather we excluded developers from social housing and dealt with that directly through a local authority, empowered to raise the funds, purchase the land and fund the building. but then keep control of the stock so that it goes to those who genuinely need it, but only for the time that need exists. Rental seems the most appropriate way. If rent was based on actual cost, then an £80k dwelling should let for around £80-100 a week giving the authority a 5-6% return with scope for maintenance.

I suspect the wish for public authorities not to borrow is the obstacle. Instead we have a PFI system that artificially hides debt and makes a fortune for the bankers who provide the money.

I largely agree with you Malcolm. If the present banal developments are the result of local planning influence then I can’t believe the developers’ architects couldn’t do better without it. At the end of the day they have to be able to sell what they build. I don’t know the infrastructure element of the cost of a new house – much of it [like roads, sewers and drains, public lighting, play areas] is built by the developer in accordance with specifications laid down by the relevant authority and then adopted by the authority following approval. Schools and other communty facilities are paid for from the S.106 or community infrastructure levies [often aggregated across a district and held in a special account by the local authority]. It is very difficult to get a handle on these payments and apportion them. I suspect the average charge per new dwelling is in the £10-20K range.

I agree with you about social housing. I see no role for property developers to get involved in that. Local authorities can borrow over 60 years at favourable rates from the Public Works Loan Board. A lot of local authorities must by now be coming to the end of the 60 year loans they took out in the 1960’s for the massive public housing expansion – 300,000 a year for several years on the trot; unimaginable today – so they should have some extra cash in their coffers [one never hears about these reduced spending commitments as council finances are exceedingly opaque]. At fixed interest for the term of the loan and the potential over time for rising rental income building public housing should pay for itself and more.

23:45 16/10/15