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Every buyer must have had this dilemma in their minds at one point: is it cheaper to rent or to buy?
Those in Scotland can almost be convinced that it is better to buy than to rent. It’s the statistics there for the last 9 years, time in which the cost for buying a property actually decreased.
Obviously! Any house left empty – for a longer or shorter period of time is more likely to be subject to acts of vandalism or thiefs. Insurance can cover all of these problems that might occur when you are a homeowner or a landlord that has an unoccupied house.
The steps are easy to take and it saves you from a lot of trouble…
Quite simply, conveyancing is the process that happens between you putting in an offer on a property and completing, in order for you to become the new legal owner of the property. It is the transferring of a property’s legal title from the old owner to the new owner.
Who does my conveyancing?
You can hire a solicitor, property lawyer or a licensed conveyancer to do your conveyancing for you.
All solicitors are qualified to undertake work of this kind, but not all are experienced in it.
It could therefore prove sensible to hire a solicitor who specialises in residential property transactions, or a dedicated licensed conveyancer who only works on cases of this kind.
You may, however, find that you have to choose from a list of conveyancers approved by your mortgage lender, or pay a fee to go elsewhere.
Making sure legal processes are followed properly during a property sale is vital otherwise the whole thing could fall through. So you need to find a solicitor you are confident will do a good job. You can search for conveyancers on the Council for Licensed Conveyancers website.
Conveyancers will either charge you a flat fee or a percentage of the value of the property. Costs will vary, but you can expect to pay between £500 – £1,500 depending on how complex the transaction is. Get a few different quotes before choosing who to use.
Try not to use a solicitor who is too busy to give your case the attention it needs. If possible tell them your preferred exchange and completion dates and ask if they can meet these.
Also avoid choosing a solicitor who is very junior or lacking in conveyancing experience. All solicitors are qualified to do conveyancing but if possible use a firm that specialises in this area.
It can also help to use a local solicitor, they will have a good knowledge of any laws or issues particular to the area. Although most of the process can be handled via phone or email, being able to drop into an office to handover paperwork or check on things can speed things up.
If you are dealing with an estate agent they will often recommend a conveyancer to you, but you don’t have to use them. You should shop around yourself to see if you can get a better deal on price or service.
What happens on completion day?
After finding a house, securing a mortgage, ensuring the legal aspects are covered and exchanging the contracts, the big day arrives, so what can you expect?
Completion day is the main event, where the purchase funds are transferred between solicitors, the keys are handed over and ownership of the property is transferred, leaving you free to move in.
Your conveyancing solicitor will aim to have this arranged by midday, checking you are happy to proceed with the transaction and ensuring the funds are available for release, allowing formal completion of the sale. They will then inform you that the sale has gone through and you can pick up the keys to your new home either from the vendor or the estate agent, formally finalising the deal.
What happens after completion?
Once you are in your new home, the conveyancing process continues as your solicitor ties up the remaining loose ends, drawing the transaction to a close.
This will involve any remaining administrative issues, such as:
Checking all deeds and documents are correctly signed and legally binding
Paying the necessary Stamp Duty Land Tax (SDLT)
Applying to the Land Registry to record the transfer of ownership and mortgage (where necessary), and pay the required fees
Liaising with the Land Registry to resolve any issues raised by requisition
Checking that registration of ownership and mortgage documents are in order and names etc. are spelt correctly
Sending a copy of the title deeds to you, along with any remaining documents that are not required by the mortgage lender.
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Shared Ownership
This scheme allows you to buy a share in a property and then pay rent on the remaining part. This means you can start of paying the mortgage that you can afford and then overtime buy a bigger share of the property when your finances allow, this process is called ‘staircasing’.
To be eligible to buy a home through Help to Buy: Shared Ownership in England you’ll need to:
Have a household income of £80,000 a year or less outside London, or £90,000 a year or less in London.
Own no other property (you cannot be a homeowner or be named on the deeds of another property).
Have no outstanding credit issues.
Properties that can be purchased through shared ownership are from Housing Associations and can either be new builds or resales of existing shared-ownership properties. When purchasing a shared ownership property you will work with a Home Buy agent, who will manage your application.
Other shared ownership schemes
There are other schemes that offer shared routes to shared ownership and are focused on particular groups.
Key Worker Housing Eligibility:
Each housing association will have a specific allowance of properties that are reserved for key workers. Each local authority will have their own specific list of key workers and eligibility criteria but as a general rule you must be employed in a qualifying key worker profession and have a minimum of 5 years to serve before reaching retirement.
Eligible key worker job roles include:
NHS
Education
Police
Prison Service
Probation Service
Local Authority
Fire Fighters
Ministry of Defence (MoD)
Environmental Health Officers
Highways Agency Traffic Officers
HOLD (Home Ownership for people with Long-Term Disabilities)
This scheme helps assist people with long-term disabilities to purchase a home and live independently. As with other shared ownership schemes, you buy an initial share and then more shares as you can afford it from the Housing Association or Registered provider. The difference, however, is that if the properties available are not suitable to accommodate your needs, you may be able to buy a property from the open market. This requires a referral to a specialist provider and your local authority to validate the application. It is a voluntary scheme and as a result not necessarily available throughout the UK.
OPSO – Older People’s Shared Ownership
Supporting people over 55 to home ownership, it follows the same principles as other shared ownership schemes but the properties available are exclusively for those over the age of 55. The maximum you can own however is 75% of the property and if you do so, you will not have to pay rent on the remaining 25%.
If you already have a property this will need to be sold before applying to the scheme.
Extra Care is an extension provided by some OPSO schemes and is a Sheltered Shared Ownership scheme, which provides the added benefit of onsite care. This allows residents to live independently in self-contained, modern homes with access to tailored care package and support programme.
Rent to Buy is another route to shared ownership for those who haven’t yet been able to save the 5% deposit that is required. Housing Associations and registered providers offer homes to rent, the rents are typically about 20% less than the open market rent, giving you an opportunity to save a deposit. You will also be given the option in the future to purchase a share of your home and staircase up as you are able to invest more in your home.
Starter Homes is a new scheme which is due to launch shortly aimed exclusively at people 23-40 looking to get on to the housing ladder. As part of the planning conditions, developers will be required to supply specific ‘starter homes’ which will then be sold through an approved scheme, priced at least 20% below market value. The maximum property price outside London will be £250,000 and inside London £450,000.
You’ve found the home of your dreams, but it’s listed. Should this put you off, or is it nothing to worry about?
Photo source: Geograph.org.uk http://bit.ly/2EqVJCd
Here are five things you need to know about buying a listed property
Listed buildings are on a national register of properties which are of architectural or historical interest. There are around 500,000 listed buildings in the UK. There are three distinct types of listing:
Grade I: This means the property is of ‘exceptional interest’. Only around 2.5% of listed buildings are Grade 1 listed.
Grade II*: This means the property is important and considered of more than special interest. Around 5.5% of listed buildings fall into this category.
Grade II: This means the building is of special interest. The clear majority of listed buildings, around 92%, fall into this category.
All buildings constructed before 1700 are listed, as are the majority of those built between 1700 and 1840. Some modern buildings are listed too if they are considered of special importance, such as the Royal Festival Hall and the BT Tower in London. You can find out if a property is listed by searching for it on the National Heritage List for England.
If you want to make changes to a listed property, such as building an extension or changing the internal layout, you will have to apply for listed building consent. It can be more difficult to get this consent, as conservation officers need to take the property’s historical significance into consideration. If planning permission is granted, you may need to use specialist materials or techniques so that you don’t alter the character of the property.
If you’re considering buying a listed property, you must check that any work that’s been done in the past had planning permission. If it hasn’t, then you rather than the previous owner will be responsible for putting things back to how they were.
You’ll often have to hire tradesmen with specialist skills and products to make repairs to a listed property, which can be far more expensive than using a ‘standard’ builder. Do plenty of research before buying and make sure you get a comprehensive survey, so you get an idea of the sort of work that might need doing.
Historic England, which is the public body that looks after England’s historic environment, occasionally offers grants to owners of historic buildings if they need repair. They are usually offered in situations where, without a grant, a project would not be able to go ahead. You can find out more about some of the grants which might be available and how to apply for them at historicengland.org.uk.
When taking out home insurance, you must let your insurer know if the property is listed. Depending on the type of property you are buying, you may need specialist cover, although some mainstream insurers will cover listed buildings.
Remember too that your buildings cover should be for the rebuild cost of the property and not its market value. Listed buildings often have higher rebuild costs than other properties because they may require specialist materials. This means cover can be more expensive than if you are buying a home that isn’t listed. Never scrimp on cover – if you are underinsured, this could cause serious financial problems if you need to make a claim.
No question that a listed building potentially presents more problems than a new home, but owners of listed properties say it’s the same as owning a vintage car. It may need more servicing but every time you look at it, you feel a little surge of pride and pleasure!
Photo source: Wikimedia http://bit.ly/2Ekbk6c
In recent years we have seen an increase in the construction of high-rise, with more high-rise buildings being constructed than at any other time.
Across the UK there are currently over 270 existing high-rise buildings and structures, of which around 70% are in London. There are just 17 high-rise buildings over 150m (492ft.) in height and just one building – The Shard in London – over 300m, and London itself is considered ‘low-rise’ for a global city and financial capital of the world.
However, in recent years, there has been an increase in the number of high-rise buildings proposed and approved for construction in the UK. The UK development pipeline currently stands at around 500 buildings, of which over 85% are planned in London, while the rest are clustered in key cities such as Birmingham, Liverpool, Manchester and Salford.
In terms of end-use sector, around 70% of high-rise buildings currently under construction or under consideration across the UK are primarily residential, but with an element of mixed-use, e.g. retail, community or leisure.
AMA Research has revealed that in London, the high-rise market is being driven by the private housing sector, especially at the top-end of the market, and recovery in demand for commercial property.
It suggests that the concept of high-rise living has changed and the majority of high-rise residential tower blocks in UK cities are now being developed as luxury accommodation, with a mixed-use element incorporating leisure facilities, concierge services, restaurants and retail.
Such a trend may not necessarily be good for the housing industry, as Hayley Thornley, research manager at AMA Research, explained: “Going forward, the high-rise construction market is set to continue to grow, with the ever-increasing demand for housing.
“However, there are concerns about too many projects aimed at the luxury end of the market, which is not matched with housing demand. In addition, the uncertainties surrounding Brexit may influence some high-rise schemes, with many projects in the pipeline forecast to exceed stated completion dates.”
The proportion of mixed-use schemes in the high-rise buildings pipeline is set to grow, with around 18% of developments either under construction or proposed with a mixed-use function. In the office market, rising take-up, low availability of grade-A space and increasing rents in cities such as Manchester, Bristol, Birmingham, Leeds and Edinburgh, is helping to boost output in the commercial office sector and has led to more speculative building.
Sustained growth in the private rented sector (PRS) is also driving the development of high-rise housing, with increasing financial backing from both domestic and foreign institutional investors. Student accommodation also forms a small, but significant proportion of high-rise building development with a number of schemes currently in planning.
Key factors affecting the development of high-rise buildings include cost, space efficiency, wind & seismic considerations, structural safety, risk challenges both on site and in completed buildings, speed of elevators, new building materials to potentially replace steel and concrete and damping systems. In addition, significant technical and logistical factors include pumping and placing concrete at extreme heights, and craning and lifting items to extreme heights.
The definition of high-rise buildings varies, but in this report AMA Research looks at UK regional and London developments of 15-20 storeys and above.
If you’re a homeowner with an interest only mortgage, you should prioritize discussing your repayment options with your lender. Otherwise, you might be in danger of losing your home.
There are a lot of ways of launching yourself into the real estate business. And if you are really close to the business, opportunities might be even more diverse. And that is because ‘diversification’ is a trend and it creates niches of investments one can miss as an outsider.
UK is about to become a world leader for ‘for speed, simplicity and an open approach to data’, when it comes to real estate transactions. This is the goal the Land Registry set for 2018 and it should be reached once digitalization is in place – 6th of April 2018.
The process will become simpler, faster and cheaper while at the same time the integrity and security of the register against threats from cyber-attacks and digital fraud will be strengthened…
But what are the implications for those acting on the real estate market: sellers and buyers?!
Details in the article on Property Wire:
Photo source: http://bit.ly/2nartS9
Before buying a home, it’s essential to know whether it’s freehold or leasehold. It’s the difference between owning your property outright and having a landlord.
Owning a property freehold means you own the whole building and the land it stands on. Most houses – not ones divided into flats – are sold on this basis. When buying a freehold property, you are listed on the land register. You’re responsible for any and all costs incurred to maintain the fabric of the building, common parts and land.
While this might sound like a big responsibility, the benefit is that you won’t need to pay ground rent, service charges or management fees, and you’re able to modify the property to your tastes – seeking planning or building permission where required.
Leasehold means you effectively lease a property for a number of years. This is common for flats or apartments, and less common with houses. You will have bought and signed a lease agreement for the property from the freeholder, often referred to as the landlord.
When buying a leasehold, the more number of years on the lease, the better. Leases can last as long as 999 years! After this time, the lease reverts back to the freeholder. Avoid buying properties with 80 years or less left on the lease. Securing mortgages on these properties is difficult and you may have to shell out for expensive renewal fees if you wish to remain in the property after the lease has expired.
Leasehold limitations
You don’t own the property outright when you buy a leasehold. As a result, you may face restrictions and additional charges.
For example, you’ll need the freeholder’s permission to do certain things. This is known as requesting a ‘licence for alterations’. From asking to keep a pet, to seeking permission to knock walls through, actions you may need to ask the freeholder about can vary from property to property.
Ground rent and service fees apply, too. These annual fees are charged to the leaseholders for the maintenance of the building. Primarily, these fees are put towards building insurance, but also cover the upkeep of common areas, entrance ways, building security or roofing and structural repairs.
The only time this is not the case is if the leaseholders have been awarded the Right to Manage.
What is Right to Manage?
Unhappy with how the freeholder’s managing agents look after the property, or are spending the service charge funds? You could apply to take over certain building management duties from the freeholder. This is known as ‘The Right to Manage’ and is awarded by the First Tier Tribunal.
To gain Right to Manage responsibilities, multiple leaseholders need to apply collectively. For more information on qualifying for Right to Manage, visit the Leasehold Advisory Service.
Should you choose to buy a leasehold property, in many cases you may be eligible to collectively purchase the freehold. ‘Collective enfranchisement’ is when a group of leasehold property owners act together to buy the freehold of the property. Owning the freehold is an attractive prospect, because you’ll have more freedom over your property. Sounds great, but the road to get there is complicated.
We strongly recommend researching the complexities of owning a share of the freehold, seeking legal advice before making your first move. Sites like gov.uk and lease-advice.org are great starting points.