Just when you’ve found the perfect house, you realise it’s right near a bad estate. But the question is; should you buy this house or should you give it a miss?
There are a number of factors to consider when buying a house near a bad estate, which include how difficult it will be to sell the house in the future, and what effect this will have on future house price increases because it’s near a bad housing estate.
It is for these reasons why you need to consider carefully whether you should buy a house near a bad estate.
Only buy a house near a bad estate if you have considered what effect the proximity of the estate will have on the future sale value and how difficult it will be to sell the house in the future. The closer to the bad estate and the worse the estate is, the bigger the effect on value and saleability.
Please also read this article to discover how you could save £71,475 on your next mortgage if you sell your house and rent before buying again. Even I was amazed when I did the calculations! Especially if you are selling at the same time as considering the purchase of a house near a bad housing estate.
Why it’s important to carefully consider whether you buy a house near a bad estate
It is important to be careful about buying a house near a bad housing estate. When considering your purchase, the following factors will have a bigger or less affect on the house:
- Distance from the bad estate. The closer to the bad estate, the more it will be affected the house in a bad way.
- How bad the estate is and whether there are associated crimes committed by people living on the bad estate. The worse the estate is, and especially from a crime perspective, the more of an effect the estate will have on the value and saleability of the house in the future.
- It may prove more difficult to sell a house that is near a bad estate. Houses that are near bad estates will be more difficult to sell in the future.
- House price increases will be affected by the proximity to a bad estate. The closer the house is to a bad housing estate, the bigger the discount will be on its value when compared to similar houses further away.
What to check when considering a house near a bad estate
When you are looking at buying a house that is near a bad estate, you are best to do more research. The additional research would include the follow:
- Look at how long the house has been listed on sites like Rightmove. If the house has taken a long time to sell, this may be an indication that buyers are put-off by the fact it is near a bad estate. This may indicate that the price is too high for its location. Even houses near bad estates will sell, but at the appropriate price for its location.
- Check what other houses have sold using sold comparables on the same road or street, or certainly within the same postcode area. The price a house has been listed for should always reflect its location, and houses near bad estates will demand a lower price to similar houses that are not near a bad estate.
- Check the price movements on Rightmove by installing the Chrome Extension Property Log. This great Chrome extension will give you the complete history of Rightmove price reductions. A house showing price reductions indicates that a house is difficult to sell. Which may be because of its close proximity to a bad estate.
Should you listen to what the estate agent tells you about buying a house near a bad estate?
You should not listen to what estate agents tell you about buying a house near a bad estate. Estate agents work for the seller and they are only interest in selling the house and being paid their commission, which means they are biased against you, so they will not tell you what’s in your interest.
How long has the house near a bad estate been on the market?
When considering whether to buy a house near a bad estate, check if the house has been on the market for more than 6-8 weeks. If it has. this may imply the house is over priced and giving other buyers cause for concern due to how close it is to the bad estate.
How will the price of a house near a bad estate compare to other similar houses further away?
The price of houses near a bad estate are usually lower than similar houses further from the estate. Houses closer to the bad estate will be affected more. But also, the price will also be affected by how bad the estate is, so the worse the estate, the more it will affect house prices.
How close is the house to the bad estate?
Look at how close the house is to the bad housing estate when considering if you should buy the house. If the house is just yards or metres from the bad estate this will affect how difficult it will be to sell in the future, and will impact future price rises.
But if the house is a mile or more from the bad estate, this is unlikely to affect the price of the house.
How bad is the estate that is close to the house?
Before you buy a house near a bad estate, you should consider how bad the estate is.
If the estate is notably bad, and is the cause of increased in crime in the area, you should take this into account before you commit to buy.
When you buy a house, you should always consider the resale in the future. If the estate is really bad, or gets worse, this may hamper your sale in the future.
When you may want to consider buying a house near a bad estate
There may be good reason why you would buy a house near a bad housing estate, which include:
- If you have a limited budget. If your budget is limited and the only house that fits your criteria and how much can you afford to spend is the one near the bad estate. But still be careful and think about your decision carefully, as you may regret buying the house if when you come to sell it this proves difficult because of its location.
- If you are an investor. As a property investor you may be able to buy the house cheaper, but it can often be the case that rents are similar to more expensive houses nearby. This will result in a higher return on investment.
- If the estate is improving. Bad housing estates can improve if incoming buyers improve the area. If this is the case, you may find that house prices will improve in the future, and saleability will not be a problem.
How much will the price of a house be affected if its near a bad estate?
The effect a bad estate can have on a house may be more than 10% off its value depending on house close it is to the estate. This discount off value will be higher, the closer it is to the estate, and by how bad the estate is when compared to other bad housing estates.
Other considerations when buying a house near a bad estate
The other considerations you may need to think about before you commit to buy a house near a bad estate include:
- If you have children. If you have children, they may interact with children from the bad housing estate. This could mean your children get involved with the wrong children are badly influenced, or it might mean they get bullied.
- Nearby schools. There may not be good schools that are in close-proximity to a bad estate.
- Car damage or theft. You may want to research car crime in the area, as you may be subject to higher car crime rates near a bad estate.
- Home theft. If you live near to criminals, it may be more likely you are going to be subject to burglaries and theft.
- Car insurance. Car insurance premiums are affected by where you live, and by living near a bad estate, this may affect premiums, so check these before you buy the house.
- Property insurance. Home insurance premiums are affected by where you live, and by living near a bad estate, this may affect premiums, so check these before you buy the house.
- Graffiti. There are more chances of having graffiti if you live in a bad area, so check for graffiti in the ear near the house.
- Will the estate improve? If the bad estate is improving or is likely to improve in the future, you may want to take this into account before buying your new home.
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