Advice on buying property
Buying, selling or extending a home is one of
the most exciting things you'll ever do it's also one of the biggest
financial commitments you'll make.
More than ever before, property means big money - your
money. It will pay for you to seek the best advice possible from
professional experts who really know what they are talking about. You do need to remember the agent selling a property
to you has a contract and responsibility to his or her client and not to you
But if you purchase your property through an
estate agency or a firm with they will adhere to a strict code
of professional conduct. They are regulated and the way they do business
with all parties will be fair and clear.
Most people are inexperienced in property dealings and
the UK housing market is complicated to navigate through. You will have
peace of mind buying through a firm that self regulates and where the agents
follow the best practice methods.
Part of the buying process includes surveys and often, property buyers are
confused about the distinction between the alternative types of surveys on
offer as well as between a survey and a valuation. A building survey will bring you
peace of mind and may well in the long run save you a great deal of money.
Buying a property can be a complex
process - and an important part is the survey. Your home is probably the
largest purchase you'll ever make, so having a survey makes good sense - and
could save you thousands of pounds in costly repair bills. You do need to remember the agent selling a property
to you has a contract and responsibility to his or her client and not to you
But if you purchase your property through an
estate agency or a firm with they will adhere to a strict code
of professional conduct. They must be regulated and the way they do business
with all parties must be fair and clear.
Arranging a mortgage
Unless you're a cash buyer, you’ll need to arrange a mortgage to buy a home.
A mortgage is a loan against the property, and there’s a huge range of
different ones available from banks, building societies and other lenders.
Mortgage rates vary too, so it’s worth shopping around to get the best deal
What can you afford?
Based on your income, your mortgage lender can help you work out how much
you can afford to spend on a property. Most lenders will give you what’s
known as an ‘offer in principle’, or the amount they’d be prepared to lend
–and it’s useful to get this before you start looking for a home. Also, bear in mind there are always additional
expenses like legal fees and moving costs. Here’s an idea of the things you’ll
need to budget for:
- Deposit - normally 5-10% of the
property value. If you take out a substantial mortgage, you may be asked
to pay a mortgage guarantee premium
- Mortgage repayments and lender
- Building survey or homebuyer
valuation and survey
- Solicitor's fees, including
searches, Land Registry (registry of deeds sometimes in Northern Ireland)
and stamp duty
- Removal costs
- Possible reconnection costs for
phone, gas, electricity and water
- Re-directing post.
- Buildings and contents insurance
- Council tax
- Water rates
- Electricity and gas
- Phone and internet
- Ongoing repairs and decoration.
Choosing your property
Decide on the kind of property you want, such as semi-detached, terrace, or
flat – then ask yourself a few questions each time you view somewhere:
- Can you really afford it?
- Is it near the transport links,
or schools, or facilities you need?
- Do you like the area?
- Is it big enough?
- How old is it?
- Does it have enough outdoor
space, such as gardens and garages?
- Is it freehold or leasehold?
- How easy will it be to sell?
To find suitable properties, you can try looking
through local papers or search on the internet. It’s probably a good idea to
look round several properties and get a feel for the market before you buy.
New properties are very popular and offer lots of advantages:
- They need less upkeep early on
- Fitted kitchens, bathrooms and
flooring are often included in the asking price - and you can usually
choose the style and colour of fittings
- Some builders also offer a range
of home exchange schemes and deals on moving costs
- Building regulations for new
properties set high standards of insulation, which means your
home should be more energy efficient and less expensive to run.
Most new homes are covered by a National House
Building Council (NHBC) Buildmark or equivalent certificate. This provides a
10-year guarantee, but it's not comprehensive, so don't assume it covers
Things to keep in mind
New houses often sell at a premium to reflect the included extras. After a
few years, the price of new property moves into line with the local property
Before you buy a new property, make sure you have a
solicitor on board to check the property:
- Has proper planning permission
and is correctly built on its allocated plot
- Hasn't been built on contaminated
or filled land - or if it has, you have valid certificates ensuring the
land has been properly treated first. This is crucial for building
You should also get the builder to
- Proper guarantees, such as NHBC
Buildmark or similar certificates
- Test certificates and user guides
for any electrical, gas or built-in appliances
- The final certificate from the
local authority building inspector
- Confirmation the property's
energy efficiency matches the SAP (Standard Assessment Procedure) rating
provided to the local authority.
If you'd like to know more about what to look for when
buying a new home in the UK, visit the National House Building Council
If you're looking for something different, you could check out the
possibilities of pre-fabricated buildings, constructed in a factory to your
specifications and delivered on-site. Off-site construction can include
anything from simple extensions built ready to plug into mains services,
right through to entire pre-fabricated houses.
and those needing work
If you want to buy an older property, we'd strongly advise having a building
survey first. You could avoid spending a small fortune to
fix things at a later date.
When you buy an older property for renovation, you
need to check building regulations carefully, as some major building
repairs may also need permission from your local authority building
regulations department. Before you buy a property to renovate, work out the
total cost of repairs on top of the initial outlay - and decide whether the
property is still worth renovating.
If the property is a listed building, or in a conservation area, any work
you do on it may be restricted, and have to follow certain guidelines. The
scope for any structural change could be extremely limited and you'll need
to discuss any proposals with your local planning authority. You may also
have to get consent from English Heritage (or Welsh Heritage/CADW)before
work can begin.
Buying at auction
Most property is bought and sold through estate agents, but you can also buy
property at auction. If you buy at auction you must exchange contracts and
agree the sale straight away - you'll be legally bound to the sale and can't
back out. Undertake a survey of
the property before you buy.
Some auctions are carried out using a sealed bid
system. This means all potential buyers send a letter to the agent stating
how much they want to pay for the property. When the letters are opened, the
property is sold to the highest bidder.
- Get a copy of the auction
catalogue from the auctioneers
- Get a survey on the property
- Get your solicitor to check local
and national searches and title deeds for any covenants or restrictions
- Ask your solicitor
to check relevant local authorities for planning, building regulations,
highways and anything else which might affect the property
- Check how to pay the auctioneer.
If you’re the successful buyer, you’ll usually need to pay a 10% deposit
straight away, and pay the rest within four weeks.
Restoration or Conservation can help you with:
- Property extensions - contacting
your local authority for permission to carry out the work, and advising on
any likely restrictions and costs
- Re-planning property - advising
you how to demolish or erect structural walls and other building elements
- Any work affecting boundary or
party walls with your neighbours
- Safety features, including means
Types of ownership
There are four types of ownership or 'tenure' for property:
If you buy a property freehold, it means you have full ownership of the
property until you decide to sell it. Freehold properties are usually houses
If you buy a leasehold property, it means you have part ownership and the
right to live there for a fixed time only - usually either 99 or 125 years
(999 years or longer in Northern Ireland). Leasehold properties are
generally flats and maisonettes. A landlord owns the freehold of the
building, but doesn't have access to your flat unless invited.
The value of a lease decreases with time, but you can
usually extend your lease or buy a new one. Many building societies and
banks may have restrictions on granting mortgages where leases are below 70
You'll also probably have to pay
ground rent on leasehold property, and if it's a flat or maisonette, you may
have to pay a service charge to cover repairs and cleaning of shared areas.
Before you buy, get your solicitor to check:
- How much these extra charges are
- Whether you have to pay them in
- If a management company is
responsible for collecting payment
- Whether building maintenance is
managed by the freeholder
- Any future costs, such as
re-roofing, exterior redecoration, replacement of
lifts or communal heating boilers.
A survey of a leasehold flat or maisonette will tell
you who has responsibility for repairs and maintenance.
Leaseholders have the right to convert from leasehold to common-hold if they
buy out the landlord, in both new and existing buildings. Common-hold
provides a different management structure for blocks of flats and other
interdependent buildings with shared services and common areas. Please note
that common-hold does not exist in Northern Ireland, but leaseholders have a
right to buy out their ground rent.
Housing associations offer shared ownership as a part-buy part-rent way to
own a property. You pay a mixture of mortgage and subsidised rent, making
the homes affordable for those on or below average incomes. If you start to
earn more, you can increase your shares in your home, and have the option of
owning the property outright.
Viewing a property
First impressions count for a lot - but you
should view a property at least twice, preferably at different times of the
day, to give you a better idea of what's on offer. Location is a big
priority, so check the surrounding area and local amenities. Here are a few
things to think about to make sure it meets your requirements:
- Nearby main roads, or pubs, clubs
or restaurants -they can be handy, but also noisy
- Nearby railway lines - or
overhead flight paths
- The feel of the community - does
it seem friendly?
- The aspect of the house - does it
get enough light?
- Is the property well maintained?
- The age of the property
- Garden size
- The condition of nearby
On the inside, check to see whether:
- The property needs updating - and
if so, how much?
- Everything works, like the
lights, taps, plugs and windows
- The rooms are big enough
- The fixtures and fittings are
going to be included in the sale - especially if you like them
- You like the views
- It feels like home.
Why surveys are important
Your home is likely to be the biggest purchase you'll ever make, so having a
survey is worth it. A survey not only offers peace of mind, but could
potentially save you thousands of pounds in costly repair bills in the
The Consumers' Association, the Council of Mortgage
Lenders and any solicitor will advise you to get a survey before you buy a
property, and not just to rely on a mortgage valuation. Here's why:
Your mortgage lender will send a specialist valuer to work out how much the
property's worth so they can decide whether to give you a mortgage or not.
The valuer is only concerned with problems that might affect the security of
the loan, not whether you have any structural problems that need fixing.
Are like a 'health check' for buildings, which could save you
thousands in the future. There are three main types:
Homebuyers survey and valuation (HSV)
This is most suitable for conventional properties built within the last 150
years which are in reasonable condition. It provides a concise report
detailing any significant problems that could make a difference to the value
of the property.
This is suitable for all residential properties, providing a detailed report
on their construction and condition. It's particularly useful if the
property is dilapidated, and has been extensively altered or you're planning a
major conversion or renovation.
01 - Find a home
The time between your offer being accepted and completion on the property
sale varies enormously. Depending on whether there's a chain involved, it
can be anything from four weeks to several months.
02 - Your
offer is accepted
Before you sign anything, make sure you know what's included in the asking
- Check you're keeping all the
fixtures and fittings as listed in the property details
- If you like the carpets, see if
they're included too.
You'll find furniture isn't usually included, unless
it's specifically listed.
03 - Subject to contract
Your accepted offer is still subject to contract - which means the sale is
agreed but isn't binding until you exchange. For the time being, either side
can back out without facing legal charges.
04- Arrange your mortgage
If you haven't already got a mortgage in place, your next step is finding
one - or making sure you have the money ready.
05 - Arrange a survey
Ask to conduct a survey of the property
06 - Instruct your solicitor
Ask your solicitor or conveyancer to start local authority searches, and
environmental searches if necessary. Once they're happy with the legal
aspects of the property, and you have the finance in place, you can exchange
07 - Exchange contracts
When you exchange, you usually have to pay a deposit of 10% of the agreed
sale price. You complete when the rest of the money is transferred to the
seller - then you can move in.
08 - Move in
Collect keys from seller's estate agent and instruct your removal firm.
Know your rights
The 'home information pack'
From the 1st of June 2007 government legislation will change the way we buy
and sell homes in England and Wales. The responsibility for getting searches
and surveys done will become the seller's, so the buyer can make a more
At the moment when you buy a property, you have to
make an offer with very little information to hand. If a structural or legal
problem shows up later, it can cause extra expense, ruin a sale, or even
destroy a chain.
The home information pack (also known as the seller's
pack) aims to reduce the time it takes from the accepted offer to the
exchange of contracts, hopefully reducing the chance of any gazumping or
This is when the seller accepts your offer - then later accepts a higher
offer from someone else.
This is when a buyer offers a lower price than they originally offered just
before contracts are exchanged - hoping the seller will accept it rather
than lose the sale.
The seller has ultimate responsibility for accepting
another offer, not the estate agent. It's important to know your rights
before you buy or sell a property. Here are two main pieces of legislation
affecting estate agents.
The Estate Agents Act 1979
By law, estate agents must:
- Give you their terms in writing,
and say whether or not they are acting as multi, joint or sole agent
- Explain their fees
- Declare any personal or connected
- Report any offers (unless the
seller instructs otherwise) in writing quickly
- Have separate accounts for
deposits and client money
- Not misrepresent any offers.
The Property Misdescriptions Act 1991
Any information about the property must be accurate, whether it's written or
verbal. It can't be misleading or false, including any photographs or
These vary from place to place. It's worth
asking if your solicitor will offer a no buy, no charge deal. When you buy,
expect to pay the solicitor about 1% of the total agreed price - but check
the range of services they'll provide for the fee. It's often worth choosing
a solicitor on the recommendation of a friend or colleague.
Land Registry fee
This is a charge on the purchase of the property and is related to the
buying price - your solicitor will have a list of charges.
Local authority searches
These are checks to make sure there's no reason why the sale can't go
through, and can bring up problems such as roads planned near the property
which might affect your decision to buy. Fees vary depending on the property
These are to check on things like mineral rights, flooding, subsidence,
landfill sites and pollution in the area. Home check provides much of this
information free of charge.
Mortgage lender charges
This is usually included in the mortgage arrangement charges.
Mortgage arrangement fee
This varies from one lender to another, especially if you are taking out a
fixed rate mortgage.
Mortgage indemnity policy
This is a one-off charge lenders make in case they have to repossess your
property and sell it at a loss. It's approximately 8% of the difference
between your loan and what the lender thinks the future price of the
property might be - and you only pay it if your loan is for a high
percentage (between 95-100%) of the purchase
cost of the property.
Mortgage redemption charge
You only pay this if you change lenders and break the terms of the mortgage
- and it usually only applies to fixed rate mortgages.
If you complete the sale on your new property before you sell the one you
already own, you may have to take out a bridging loan. There are two types -
the closed loan and the open loan. With a closed loan you know in advance
when you can repay it. With an open loan, there's no set repayment date and
it carries a higher risk - so it's more expensive. An alternative may be
taking out a flexible short-term loan from your bank.
Keep in mind when you buy a home, you want independent advice, giving you
the detail you need. A valuation from a mortgage lender may be free, but it
only really tells you whether the house is worth the money they're prepared
to lend you. A survey from an agent will tell you a great deal more,
and could save you thousands in the long run - especially in older
properties, or when you want to make alterations.
Surveyors' fees vary, so compare prices before
choosing, and negotiate the fee to match the size and type of property. Ask
the surveyor exactly what's covered in the survey, so you know what you're
paying for and can ask them to look for extra things.
Estate agent's fees
These are likely to be between 1-3% of the sale price plus VAT - charges
vary, so get a range of agents to quote. Sole agency fees are likely to be
less than multiple agencies.
This is a tax on buying property for on the price you pay - here's a guide:
Up to £125 000
£125 001 - £250 000
£250 001 - £500 000
More than £500 000
From the moment you exchange contracts, you need building insurance on your
new property. Insurance rates vary between companies, so it's worth getting
quotes from several different insurers - and make sure you know exactly
what's covered in the policy.
You don't usually have to pay to have gas, electricity or water reconnected,
but there may be a charge to reconnect the phone.
The cost of moving varies according to how much stuff you have, how
difficult it is to pack, how far you're moving and the time of year. Shop
around for the best deal - and remember it's worth checking to see if the
quote includes insurance.
If you're not moving straight into a new home, you may have to consider
storage. The costs for this vary according to the quantity of stuff involved
- as a rough guide, a two-bedroom house will probably fill up to four
containers, and a three-bed house can fill six.