The stamp duty holiday deadline ended on 30 June but buyers have until 30 September to take advantage of the lower stamp duty holiday threshold of £250,000. Landlords will be able to save up to £2,500 although they still have to pay the 3% stamp duty surcharge for owning more than one property.
First Time Buyers now pay less or no tax if all purchasers are First Time Buyers and the purchase price of the property is £500,000 or less.
Since 1st July 2021, the current Stamp Duty Land Tax (SDLT) threshold has gone down to £250,000. Although the bigger savings before this date have now been reduced, there is still an opportunity to save up to £2,500 on SDLT before it returns to its regular threshold rate of £125,000 from 1st October 2021.
What has gone unnoticed by most commentators is the change that affects First Time Buyers, which also came into effect from 1st July. Since that date, First Time Buyers now pay less or no tax if all purchasers are First Time Buyers and the purchase price of the property is £500,000 or less.
First Time Buyers are exempt from SDLT for the first £300,000, but since 1st July, they now pay a reduced rate of 5% on purchase prices above £300,000 and up to, and including, £500,000. So, if you’re a First Time Buyer, but were unfortunate to miss out on the 30th June deadline, there are still longer-term savings to be made, as these will continue for First Time Buyers after the SDLT returns to its £125,000 threshold from 1st October 2021 for all other buyers.
Further to the Government’s announcement yesterday evening, and the clear instruction on all non-essential businesses to be closed, we will be closing our offices to the general public until further notice.
However, we will continue to be available to assist and manage emergency related issues. We will still be available via email on email@example.com/ firstname.lastname@example.org
This has become a necessity to protect our clients, staff and contractors.
For those facing financial difficulties, have contracted Covid-19, are self-isolating or are self-employed, the Government has released advice on what you can do to get financial assistance, please visit https://www.gov.uk/government/publications/support-for-those-affected-by-covid-19/support-for-those-affected-by-covid-19
If your tenant has been layed or has been informed that they have been let go due to the above, we have asked them to provide written proof of the same.
However, the Government has prepared a ‘wage package’ called the ’Coronavirus Job Retention Scheme’, where:
“…all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.”
We have urged Tenants to should speak to their employers about this to see whether it would apply to them.
In the meantime, the following extract details specifically tenants and Landlords:
If you are experiencing financial difficulties meeting your mortgage repayments because of COVID-19, you may be entitled to a mortgage or rental holiday for 3 months. This includes if you are a landlord whose tenants are experiencing financial difficulties because of COVID-19. If you are a tenant experiencing financial difficulties because of COVID-19, the government will ensure you do not face the threat of eviction for at least 3 months:
- the government has agreed with mortgage lenders that they will offer repayment holidays of 3 months to households in financial difficulty due to COVID-19
- this will also apply to landlords whose tenants are experiencing financial difficulties because of COVID-19
- emergency legislation will be taken forward so that landlords will not be able to start proceedings to evict tenants for at least a 3 month period. This applies to private and social renters
- at the end of this period, landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances
Essentially this means that, during the next 3 months, tenants who have difficulty in paying their rent, will be ‘protected’ from being evicted, however, this does not mean that rents are not due/waived, but deferred/delayed.
During the next 3 months, it is recommended that rents is paid as much as possible, after which both sides are expected to agree affordable payment plans to clear arrears and cover future rental amounts due.
We have been in discussions with HomeLet, our Rent Guarantee provider, who has confirmed to us that, at present, they will meet their obligations with existing policies but we would need to make you aware that the policy contains a clause regarding ‘Force Majeure’, which they may decide to enact
‘Force Majeure’ means “unforeseeable circumstances that prevent someone from fulfilling a contract”.
However, please note that any legal action will the subject to the above ‘protection’ for those who have been directly affected by Covid-19.
Separately, they have informed us that they are not accepting any new applications, until further notice.
It’s important to ask potential conveyancing solicitors the right questions, to ensure your purchase goes as smoothly and quickly as possible.
1. How much will you charge?
Yes it’s a pretty obvious one but you’d be surprised how many people fail to ask this at the start of the conveyancing process. It’s important to get quotes from a few different conveyancers to ensure you’re getting a good deal.
Most conveyancing quotes will include third party costs (or disbursements) such as the cost of local authority searches and Stamp Duty. If a quote seems surprisingly low, it could be that third party costs aren’t included in the conveyancing fees. Ask for an itemised quote so you can see what the conveyancer’s time actually costs.
2. Who will handle my case?
The most experienced solicitor in the firm may give you the quote, but often you’ll find it’s the junior team member who actually works on your case. That’s not necessarily a bad thing. For straightforward sales the conveyancing process should be pretty standard and nothing a newly qualified solicitor couldn’t handle.
However, it’s important to know who is working on your case so that you can build a relationship with them and, in the event you run into issues and need to speak to someone for clarification or a concern. If your case is a little more complex (for example, buying a leasehold property where you will want to discuss restrictions and costs associated with being a leaseholder), you may prefer a more experienced solicitor. Ask for the name of the person that you will be speaking to in that instance.
3. How often will I hear from you?
Trust us, there is nothing worse than radio silence when you’re in the house buying process. You’re on tenterhooks, desperate for everything to go ahead as planned and your solicitor has suddenly gone to ground. No updates, no calls. Frustrating is an understatement. At the same time, you don’t want to be calling everyday when they are trying to progress your case.
You can avoid this frustration by having a frank discussion with your conveyancer at the start of the process about what level of communication is reasonable and when you can expect to hear from them.
4. Which bodies are you a member of?
Conveyancing solicitors should be members of professional bodies such as the Law Society and the Council of Licensed Conveyancers. Check which professional body they’re a member of before appointing them.
5. Have you dealt with many cases like mine?
Not all home sales are the same. Yes, there’s the run of the mill, three bedroom 1930s semi but there’s also a host of factors that can make things a little more complicated. And if your conveyancer isn’t accustomed to cases like yours, it could hold the whole process up and mean you aren’t getting the level of service you need. If you’re buying a leasehold or buying a new build home, for example, you’ll be much better off opting for a solicitor who has dealt with similar properties before.
6. What costs will I have to pay if the sale falls through?
It’s important to ask your conveyancing solicitor how much you’d need to pay if the sale falls through. It is possible to find firms that offer ‘no move, no fee’, but you should double check what that means in reality. For example, does it mean that you still need to pay third party costs? Do you need to pay for an insurance policy to be eligible for this, and if so how much will the premiums be?
It’s common for disbursements (the cost of searches and out-of-pocket expenses incurred by the firm) to be excluded from most ‘no sale no fee’ quotes. However, if you’re unsure whether to progress with a a purchase – for example if you are still finalising your financing, or waiting for survey results – you can always instruct the lawyers but ask them not to incur any expenses yet, and to hold off on any searches. That way, if the purchase doesn’t progress, you shouldn’t be out of pocket – at least with regards to the law firm.
7. Are you approved by my mortgage lender?
Many mortgage lenders will only work with conveyancing solicitors that are on their approved panel, but most conveyancing referral services will ask this upfront so you don’t end up with a conveyancing solicitor that your lender rejects.
You can still choose to work with a firm that isn’t approved, but you’ll need to pay extra and the costs can pile up.
8. Where can I check feedback?
There is no better way to check a firm’s performance than by reading reviews. If your chosen firm is proud of its track record it’ll have no problem directing you to where you can find feedback from past clients.
9. When do I need to pay conveyancing fees?
It’s important to check when you’ll be expected to pay the conveyancing bill. It could be that you need to pay when you exchange, or when you complete. You may be asked to pay a deposit at the start, and you may need to settle the bill for disbursements as they come up. In short, this varies by firm so make sure you find out when payment is due.
10. What’s your procedure for disputes?
It’s always a good idea to prepare for the worst case scenario, so asking how the firm deals with disputes is very important. Aside from giving you a feel for their level of customer service, it’ll arm you with invaluable knowledge if you do need to raise an issue. If a firm doesn’t have a solid procedure, or if the conveyancing solicitor is unsure of what to do in this situation, it should raise a red flag.
While leasehold is a common form of tenure for flats, it is increasingly applied to new build houses as well. So whether you’re thinking of buying a house which is leasehold – rather than freehold – or have realised your house is leasehold now that you’ve moved in, we look at what you need to know before you go any further.
I own a leasehold house: what are my options?
First off, you should consider suing your conveyancing solicitor for professional negligence
This seems like a drastic first step, but if you weren’t alerted to the fact your house was leasehold then your solicitor or conveyancer was negligent in not making you aware. You’ll need to be up for a battle; after all they do this for a living. It is not enough to believe or feel that you were inadequately advised, it is all about how much proof you have.
Your first job is to get a copy of your file from the solicitor who advised you when you bought your house. You can do this yourself by simply writing to your solicitor or you could instruct a solicitor to do this for you. Be prepared to wait: your solicitor has to provide you with this report but there is no legal timeframe for them to do this by.
The most important document is something called your “Report on title”. This is the report on the pros and cons of you buying this property. This is the document that could give you the proof you need to sue your conveyancing solicitor. The most important bit of your file to look for is the part where it explains the ground rent ground in your lease and the implications it will have for you in the future.
You will also need to check all the documents in your file as well to see if any other documents your solicitor provided you in your report included advice on the ground rent of the lease, and:
- If there is no mention of ground rent or their implications you could have a very good chance of suing.
- If your file shows the solicitor simply states your ground rent is “£250 per annum” with no other advice you may still have a case to win.
- If it says “Ground rent is £250 and doubles every 10 years” but does not offer any other advice you may still win but a solicitor will try to assert they did advise you.
- If your file says “Ground rent is £250 doubling every 10 years and this could be bad” then your chances of success are reduced even further as the solicitor will insist they had properly advised you.
Second, consider buying the freehold of your home
Broadly speaking there are three different ground rent schedules for leasehold houses.
- Doubling ground rent every ten years. This is by far the worse one and is considered onerous.
- Doubling every 25 years. This is not as bad and is not considered onerous.
- Linked to RPI. This essentially means the ground rent you pay is linked to inflation and technically you pay the same amount each year forever more.
You need to keep in mind however that all these ground rent options are totally needless and exist for the sole purpose of creating an asset class for the ground rent investors. By buying your freehold you could free yourself from these unpredictable and unfair fees. Under the 1967 Leasehold Act you have a legal right to force your freeholder to sell you the freehold of your home.
To work out how much it should cost you need to calculate the total ground rent you owe your freeholder for the remainder of your lease, taking into account inflation and the capitalisation rate. We advise you get dedicated advice from experts in calculating a ballpark figure before you formally start the process.
But buyer beware: Avoid informal agreements with the freeholder
Once you know where you stand on likely cost of buying your freehold, you will want to contact the freeholder to get the process started. At this point your freeholder may offer you the opportunity to bypass the process of buying a freehold using a formal process with lawyers and may suggest an informal agreement. This almost always leads to a worst deal for you the leaseholder and should be avoided at all costs. Remember your freeholder has bought your freehold to make money.
Furthermore, buying your freehold ‘informally’ from your freeholder places you outside any legal protection you would have if you acted inside the 1967 Leasehold Act. Your freeholder can negotiate the very best deal for themselves on the freehold transfer and there is nothing you can do to remove anything from the contract you don’t like, it’s a take it or leave it deal.
Finally, buy your freehold as part of a group using your statutory legal right under the 1967 Act.
The very best thing you can do is to buy your freehold as part of a group with your neighbours acting at the same time. The bigger the group the more money you will save. There is an economy of scale when you act as a group but it will also give you formidable negotiating power against your freeholder when trying to agree a fair price.
It may seem like technical legal language, but there are few things more important about your home than whether it is freehold or leasehold. It makes the difference between owning your own home outright, and having a landlord.
Disputes between leaseholders and freeholders
It is very common to have tension between freeholders and leaseholders.
- Fees are a major source of contention, with one in four (26%) leaseholders feeling their freeholder is over charging, but being able to do little about it. While the ground rent usually costs in the region of £100-250, even on ordinary flats the annual charges can amount to over £1000 a year
- Leaseholders often complain that freeholders don’t maintain the building to a sufficiently high standard, or keep common areas clean and tidy. One in four (23%) leaseholders complain of a lack of control over what major works are done and almost one in five (18%) have had difficulty getting necessary works done (2019 annual Homeowner Survey)
- Freeholders often complain that leaseholders breach the terms of their lease, for example by making too much noise or not getting permission for building works
The declining value of leaseholds
When the term of the leasehold goes down to zero years, then the property reverts to the freeholder. So, if you have a 40 year leasehold, you only have the right to use the property for 40 years before it goes back to the freeholder. A lease with a term of zero years is clearly worthless, and all other things being equal, the shorter the lease, the less it is worth. The value of long leases stays fairly stable, but the value of short leases can drop rapidly. For example, a flat with a lease of 60 years is worth more than 10 per cent less than if it had a lease of 99 years – you might think that a flat is worth £200,000, but actually it is worth less than £180,000, with the difference in value being owned by the freeholder.
Should I avoid buying a property on a short leasehold?
Leases of less than 90 years can start to be problematic for leaseholders, and should be approached warily. Certainly, any lease of less than 80 years can start to significantly affect the value of the house. If you have a short lease, the property can decline in value even if property prices in your area are generally rising. This means that fewer people will want to buy it when you resell; it also means that mortgage companies might be reluctant to lend on it.
Extending your lease
A series of Government acts have given leaseholders protection against short leases, by giving them the right to extend their lease or the right to buy the property – but this can be very expensive indeed. The law is slightly different depending on whether you have a house or flat:
- You normally have the right to extend your lease by 90 years on top of your unexpired term
- If so you won’t have to pay any more ground rent and you can negotiate new terms for the lease, like who pays for works on the flat
- However, you only have the legal right to do this if you have held the lease on the property for 2 years and it was originally leased on a “long lease”, usually more than 21 years.
- You will have to pay a premium for extending the leasehold.
- Many people considering buying a short leasehold property (generally less than 80 years) insist that the leaseholder extends the lease before they buy it.
- After you tell your landlord that you qualify for the right to extend the lease they can accept your offer, negotiate, or reject your offer. If they do the latter you can challenge them in court
- You might have the right to extend your lease by 50 years on your house
- If so you can renegotiate the terms of your lease, like who pays for works on the house
- However, you only have the legal right to do this if you have held the lease on the property for 2 years and it was originally leased on a “long lease”, usually more than 21 years
- Unlike flats, you don’t have to buy a lease extension for a house, but your ground rent is likely to go up
- You should get a professional to help you extend the lease. For example, if you live in a converted house the rules for extending a lease on a flat might apply instead
- After you tell your landlord that you qualify for the right to extend the lease they can accept your offer, negotiate, or reject your offer. If they do the latter you can challenge them in court
Buying the freehold on a leasehold property
You might also have the right to buy your house or flat outright, so that you own the freehold. This is called ‘enfranchisement’. While there are complicated legal procedures and legal costs involved this process of enfranchisement can be invaluable. Again, the law depends on whether you have a house or flat. Ensure you get professional advice and assistance.
What is commonhold?
- Commonhold is a variant of freehold, created by the Leasehold Reform Act of 2002, which overcomes some of the worst aspects of leaseholds.
- Commonhold is where a multi-occupancy building is divided into a number of freehold units, so each individual flat owns its own freehold. The common parts (staircases and hallways etc) are owned and managed by a Commonhold Association, a company that is itself owned by the freeholders of the flats.
- This means there is no superior freeholder, but rather the owners of the flats manage the common and external parts of the property jointly. This protects people both from greedy landlords, and from the problems of short leases.
- But, as with any form of community ownership, problems and conflicts can arise between members of the Commonhold Association. Moreover, only about 15 to 20 commonholds have been completed in the UK.
Conveyancing is essential when you’re buying, but it’s complicated. Find out everything you need to know about the conveyancing process for buyers now.
What is conveyancing?
Conveyancing involves the legal transfer of home ownership from the seller to you, the buyer. The conveyancing process starts when your offer on a house is accepted and finishes when you receive the keys.
Who does the conveyancing?
A solicitor or conveyancer usually conducts the conveyancing process, but it is possible (although difficult) to do it yourself as long as you are not taking out a mortgage.
What happens first?
Before anything can happen, you need to decide if you want to hire a professional or do this yourself. Most people would prefer to find the right solicitor or conveyancer and “instruct them” to oversee the conveyancing process. If you do this, try to avoid using your estate agent’s recommended conveyancer as it will likely be a commission-based referral and may end up costing you more.
Before choosing your conveyancer, see a guide on important questions to ask your conveyancing solicitor before instructing.
Once you’ve appointed a conveyancer, they will draw up a draft contract or terms of engagement with you, setting out their charges and deposits required.
Your solicitor will write to your seller’s solicitor to confirm they are instructed and request a copy of the draft contract and any other details, such as the property’s title and the standard forms.
One of the first parts of the conveyancing process involves your solicitor examining the draft contract and supporting documents and raising enquiries with the seller’s solicitor. You will be expected to go through the forms the seller has completed and let the solicitor know if you have any queries or concerns.
In particular you will want to double check the tenure of your new home: is it leasehold or freehold? If it’s leasehold, don’t rely on your solicitor to check for the length of the lease. Leases below 80 years are a problem, can be costly to extend and you need to have owned the property for 2 years before you are eligible to do so. Leases under 60 years are best avoided.
There are things you may not know about the property just from viewing it with estate agents or even getting a survey. As part of the conveyancing process, a conveyancer will do a set of legal searches to ensure there are no other factors you should be aware of. Some searches will be recommended by the solicitor for all purchases and others will be required by the mortgage lender to protect them from any liabilities that the property may have.
- Local authority searches: are there plans for a motorway in your new garden? How about radioactive gas?
- Checking the ‘title register’ and ‘title plan’ at the Land Registry– these are the legal documents proving the seller’s ownership. Both checks are legally required in order to sell
- Checking flood risk – this can also done at the Land Registry. If you are already getting an environmental search (see below), you might not buy this one separately as the search will contain much more thorough flood information and maps
- Water authority searches – find out how you get your water and if any public drains on the property might affect extensions or building works
- Chancel repair search – to ensure there are no potential leftover medieval liabilities on the property to help pay for church repairs. However, you may decide to take out Chancel repair insurance instead for £20 or so. The laws around Chancel repair changed in October 2013 so now the onus is on the Church to establish and lodge liability with the Land Registry
- Environmental Search – this report is used on the vast majority of transactions and is provided by either Landmark or Groundsure. Depending which product your solicitor usually uses, the report will give information about contaminated land at or around the property, landfill sites, former and current industry, detailed flooding predictions, radon gas hazard, ground stability issues, and some other related information
- Optional and location specific searches – sometimes extra searches are required or recommended depending on the location or type of property or due to particular concerns raised by the buyer. These could include:
- Tin Mining searches in Cornwall
- Mining searches in various parts of the UK and Cheshire Brine searches
- Additional Local Authority Questions such as Public Paths, Pipelines, Noise Abatement Zones, Common Land, etc
The cost of these searches are often charged as extras, so make sure you factor them in to the conveyancing fees.
Conveyancing for your mortgage
You will need to get your mortgage in place, which includes ensuring you have the financing available for a mortgage deposit. Your solicitor will receive a copy of the mortgage offer and go through the conditions.
You will need to get a mortgage valuation, which typically happens as part of the conveyancing process. This is carried out on behalf of the mortgage company so they know that the property you’re buying provides sufficient security for the loan. You normally have to pay for it, but a mortgage company might throw it in for free to attract business.
You also need to have any other necessary surveys done. What sort of survey you have done will depend on your specific circumstances.
Before exchange of contracts can take place your lender will require you to get buildings insurance for your new home. That’s because you are responsible for the property as soon as contracts have been exchanged, so it’s in your interests to protect yourself in case of any eventuality.
Since receiving the draft contract from the sellers solicitor at the start of the conveyancing process, your solicitor will have have been in correspondence with you about what is covered. Before signing the contract your solicitor will need to ensure:
- That all enquiries have been returned and are satisfactory
- That fixtures and fittings included in the purchase are what you expected
- A completion date has been agreed between the two parties, which is usually one to four weeks after exchange of contracts, though this can vary widely
- That you have made arrangements to transfer the deposit into your solicitors account so that it is cleared in time for an exchange. You may want to negotiate on the size of the deposit, which is normally 10% of the value of the property. However even if you agree to pay less than 10% you are still liable for 10% of the value of the property if you later pull out of the agreement. Therefore if you pay a 5% deposit and pull out of buying the property you will not only lose your deposit but also legally owe an additional 5% of the value of the property
Go to the property with the estate agent and the fixtures and fittings inventory list to ensure that everything you paid for is still there and the house has not been damaged in any way
You and the seller will agree on a date and time to exchange contracts at any time on any given day. Your solicitor will exchange contracts for you, which is usually done by both solicitors/conveyancers reading out the contracts over the phone (which is recorded) to make sure the contracts are identical, and then immediately sending them to one another in the post.
If you are in a housing chain your solicitor/conveyancer will do the same thing, but will only release it if the other people in the chain are all happy to go ahead. This means if one person pulls out or delays, then everyone in the chain gets held up.
Once you have exchanged contracts you will be in a legally binding contract to buy the property with a fixed date for moving. This means that:
- If you do not complete the purchase, you will lose your deposit and owe the seller more if the deposit was less than 10%
- The seller has to sell or you can sue them
- The seller can no longer accept another offer (you no longer need to worry about being gazumped)
Between exchange and completion
One of the final steps in the conveyancing process involves your solicitor lodging an interest in the property, which will mean that the deeds to the property are frozen for 30 working days to allow you to pay the seller and lodge your application to the Land Registry to transfer the deeds into your name.
The seller will move out (although they may leave this to the day of completion).
You should get organised for your moving day.
The solicitor will send you a statement showing the final figure to pay, which will need to be cleared into your solicitors bank account at least one day before completion.
On completion day
Completion is normally set around midday on the specified date, although in practice takes place when the seller’s solicitor confirms that they have received all the money that is due. Once this happens the seller should drop the keys at the estate agents for your collection. This means that the conveyancing process is over, and you can move in.
Your solicitor will tie up some loose ends:
- Pay Stamp Duty Land Tax on your behalf.
- You will receive your legal documents about 20 days after completion after your solicitor has sent them to the Land Registry
- Send a copy of the title deeds to your mortgage lender, who will hold them until you pay your loan off
- Notify the freeholder if the property is leasehold
- Give you a bill for their payment
You will want to collect together all your paperwork from the purchase of your new home, including the estate agent’s brochure, to file away and keep safe for when you move again.
Would you spend just 20 minutes viewing a property that is going to be your home for many years? Some buyers do – and live to regret it. Don’t remember the things you should have looked for after you have left.
1. Is there damp?
The main giveaway signs are a mouldy smell, flaky plaster, and watermarked walls or ceilings. It sounds obvious, but make sure you look closely near the ceiling and around the skirting boards. Another clue might be if the room has just been repainted – possibly covering any damp
2. Is the building structurally sound?
Big cracks are what you are looking for – but you should expect some hairline cracks. Look especially around where extensions join, end-of-terrace walls, and bay windows, all of which can start to fall or bow away from the rest of the house. You’re looking for issues now that you can ask the homeowner or estate agent about and then ask your surveyor to investigate later. But you can only look for what you know; a chartered surveyor with years of experience is trained to spot risks and know what needs attention. For more information on whether you need a surveyor to see What sort of survey should I have?
3. How much storage space is there?
Storage space is a valuable but often overlooked asset. Where will you keep your vacuum cleaner, towels, spare linen, and boxes of junk? Is there room for cupboards or shelves to be built in? Especially in newly built houses, storage space can be scarce.
4. Which way does the house face?
In winter, during a cloudy day or at night, it is difficult to tell the difference between north and south facing house or garden – but in summer it can make the difference between a home that is full of light and warmth, and one that is frustratingly dark. Your favourite plants might notice too, and protest by dying. Don’t be shy about taking a compass with you to the viewing – you might have one on your phone. With bi-fold doors all the rage, be aware that in moments of sunshine the solar gain can make the room unbearably warm, so try to visit and spend some time in that room when the sun’s out.
5. Are the rooms big enough for your needs?
We’ve heard of new build home developers putting smaller furniture in rooms to make them seem bigger. Be warned! Assuming you won’t be buying all new furniture as soon as you move in, will your existing furniture fit?
6. Have you been fooled by staging?
Cleverly placed mirrors, strategic lighting, delicious smells, cosy fires, and fresh licks of paint are all tricks sellers use to make their home more appealing. It’s nice to feel you can move straight in without having to do a thing, but try to remain objective. And if their furnishing makes the space, take photos and ask what they are leaving behind. Perfect light fittings, for example, can take an age to find and replace!
7. Do the window frames have cracking paint? Is the double-glazing intact?
The state of the external window frames is a great indicator of the state of the house – if people have invested in and looked after those, they are likely to have taken great care of the rest. If you can easily push your finger into a wooden window frame, they are usually rotten. If there is condensation between double-glazed window-panes it means that they are faulty. New windows need to be installed by a registered approved inspector so you should get a FENSA or similar certificate, which often comes with guarantees. Ask if this is the case.
8. How old is the roof?
Replacing a roof is an expensive business, and newer roofs have a life expectancy of only 15-20 years, depending on the materials
Also, if the property has a flat or nearly flat roof, check out the material with which it sealed. Nowadays a membrane is used and is better than asphalt and gravel, which can leave seams and edges unsealed
9. Are there enough power points and what condition are they in?
Dodgy wiring can be dangerous, and rewiring your new home can be an expensive business. Also, check out the fuse board – often an indication of the state of the wiring but a survey will confirm if it needs replacing. Having enough plug points is apparently a big selling point in our increasingly gadget driven world so worth taking note on the way round.
10. Is the plumbing up to scratch?
Run the taps to check the water pressure. Ask if the pipes are insulated, and ensure they are not lead which would have to be replaced. Do the radiators actually work? How old is the boiler? If the hot water tank is situated in the roof it is probably an old one and may have to be replaced soon
11. Is the property adequately sound-proofed?
If the sellers have the radio or television on ask for it to be turned down to ensure that you can’t hear your neighbours’ every word.
12. What’s the attic like?
People often ignore the attic, but it is an important part of the house. How easy is it to access? Is there much storage space? Could it be converted into extra rooms? Is there insulation? The latter can make a huge difference to your bills and general comfort in winter.
13. What’s the area like?
- Are you near a pub or bar or kebab shop that becomes rowdy in the evening?
- Can you walk to shops to get a pint of milk, or do you have to drive?
- Is it easy to get to public transport?
- Are there noisy roads or train tracks nearby?
- Are you underneath a flight path?
- Is there a local dump in smelling distance?
- Are you near a school that makes it impossible to get out of your drive at school run time?
And most importantly, does it feel like you could make it your home?
If you do like a property, arrange another viewing for a different time of day, and scout out the local area a bit more. If you can, take somebody with you who might be able to notice things you don’t.
TSB has launched new buy-to-let and product transfer mortgages.
New buy-to-let rates include two-year fixed rates at 1.69% up to 60% LTV and 1.94% between 60% and 75% LTV. Five-year fixed rates start from 1.99% up to 60% LTV and 2.24% up to 75% LTV.
New two-year fixed rate product transfer rates are available at 1.39% up to 60% LTV, 1.59% between 60% and 75% LTV, 1.69% between 75% and 80% LTV, 1.74% between 80% and 85% LTV and 1.89% up to 90% LTV.
Five-year fixed rate product transfer rates start at 1.54% up to 60% LTV, 1.74% up to 75% LTV, 1.89% up to 80% LTV, 1.94% up to 85% LTV and 2.29% up to 90% LTV.
Ten-year fixed rate product transfers start at 2.24% between 0-60% LTV and 2.29% between 60% and 75% LTV.
All of the newly launched mortgages come with a £995 product fee.
The start of any year brings with it the hope and possibility of the new but possibly the start of a new decade increases that ten-fold.
With 2020 barely days old, and the slow return to work underway, what might we hope for over the course of the next 12 months or indeed the next 10 years?
Ironically, the start of 2020 seems to herald more of the same, with an added dose of political certainty brought about by last month’s General Election, the Conservative Party win, and the suggestion that housing market policies might now be more positive for transactions than they have been for some time.
In a sense the market appears to be holding its breath – and perhaps putting all its eggs in the policy basket marked ‘stamp duty changes’. The next Budget should not be too far away, and there will undoubtedly be a real sense of disappointment should the Chancellor not deliver on this. We await that announcement with interest and hope it provides a considerable catalyst to activity.
Overall, however, we can probably look forward to a year of benign house price growth, continuing in the region of 1-3% according to the Halifax, while UK Finance recently suggested that gross mortgage lending will fall by a small amount in 2020 compared to last year – down to £254bn from an anticipated £264bn over the previous 12-month period.
This drop is pretty much across the board, according to the trade body, with both purchase mortgages and remortgages falling – whether that truly plays out in this way remains to be seen, but I suspect advisers will need to keep a watchful eye on one part of the market.
Of all the mortgage sectors, it is product transfer which is predicted to grow. According to UK Finance it will be up to £164bn from £158bn in 2019. The intermediary community (at present) takes a majority share of this business, but lenders are targeting more of this business direct, and advisers also have to be conscious of the fact that their ability to keep clients long-term could be impacted by conducting more product transfer business. Ditto execution-only, although why advisers would be recommending this is anyone’s guess.
What we would not wish to see in the years ahead is a false sense of security in the advisory market. Yes, MMR provided a considerable boost to advisers’ business but the FCA has been pretty blunt in its recent missives – setting the groundwork for more execution-only, more use of technology to bypass advice, and a focus on customers who, in its opinion, do not need advice and have not made any savings as a result of taking it.
That focus on price is a considerable sea-change from the MMR and, if the FCA pursues these policies throughout the next 10 years, then advisers will need to fight harder and harder for their business. The positive of course is that advice has never been so necessary and customers – with all the product choice and complexity – could be impacted negatively if they believe they can choose the best mortgage for them.
Ten years is a long time to look ahead, but it seems obvious to say that the focus on climate change, the need to cut emissions, and the ‘green economy’ will seep into the mortgage market. For those borrowers who diminish the carbon footprint of their own home, there are likely to be rewards in terms of lower rates, but we can also anticipate an increase in the regulatory/legislative requirements when it comes to the EPC of properties.
We’re already seeing that in the rental space with all PRS properties needing to be of a specific grade and it seems an obvious area to focus on for Governments who want greater energy efficiency right across the board. Weather extremes will also impact on certain areas of the country and we may well see lenders deciding not to lend in newer regions of the UK who now appear more prone to flooding, etc, than in the past. It will not need us to gaze into the crystal ball to see the significant numbers of homeowners that could be impacted by this.
The 2020s are likely to be a green-focused decade – or at least they should be. The outgoing Governor of the Bank of England, Mark Carney, has already expressed concern about how global warming/climate change could impact on investment decisions and pension funds. Across the board, financial decisions will need to be couched in these terms, and the mortgage market is no different.
Advisers have the opportunity to continue the growth of their advisory services and products, but must respect the challenges that exist, and plan and prepare accordingly. A view of the bigger picture can be illuminating and it’s fair to say our changing environment is going to have a major say in all our lives – both personal and business.