Tag: buying

What is Stamp Duty? How much will I pay?

What is Stamp Duty? How Much Will I Pay?

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Buying a house is expensive and difficult. When you get towards the all-important business end of the deal, it’s vital to question everything and seek clarity on all aspects of the process. So let’s deal with the elephant in the room. What is Stamp Duty? And how much will you pay? We all know you need to pay Stamp Duty, but what do you actually know about it?

What is Stamp Duty?

First-time buyers have a lot to think about!

When you buy a home in England, Northern Ireland or Wales costing more than £125,000, you need to pay Stamp Duty Land Tax. If you’re buying a second home, this drops to £40,000. If you’re buying a second home or buy-to-let you’ll also have to pay an additional 3% in Stamp Duty as well as current rates.

What About Scotland?

You don’t actually have to pay Stamp Duty in Scotland. Before you pack up your bags and head north, Scottish home buyers don’t get away that easily. An almost identical tax exists named the Land and Buildings Transaction Tax. It’s the same style of lump sum tax – the only difference is the thresholds. More about that later.

How Much Will I Pay?

The more expensive a property, the more stamp duty you’ll have to pay. This goes up in bands and you’ll have to pay a percentage of the cost. You do however only pay the higher percentage on what is above that threshold.

Below you can find a table to help you with working out your Stamp Duty Land Tax:

Stamp Duty Table

Below is a table to help those living in Scotland work out their Land and Buildings Transaction Tax:

Land and Buildings Tax Rate Table

Money Saving Expert offer the following example to better illustrate this:

England, Northern Ireland and Wales:
If buying a property for £300,000
You pay nothing below £125,000, which is £0
You pay 2% on between £125,000 and £250,000, which is £2,500
You pay 5% on the value of the property above £250,000, which is £2,500
So in total this means you’ll pay £5,000 (£0+£2,500+£2,500).

If buying a property for £300,000
You pay nothing below £145,000, which is £0
You pay 2% on between £145,000 and £250,000, which is £2,100
You pay 5% on the value of the property above £250,000, which is £2,500
So in total this means you’ll pay £4,600 (£0+£2,100+£2,500).

If you don’t want the fuss with working out how much Stamp Duty you’ll pay, The Money Advice Service offer a handy Stamp Duty Calculator here.

How is Stamp Duty Paid?

Once you’ve completed the home buying process (signed the contract, received the keys) you’ve got 30 days to pay Stamp Duty. If you don’t pay within this time, you could be fined and charged interest. Your solicitor usually deals with this and will encourage you to pay immediately. Some are known to require the cash before completing the purchase. Having said this, the legal responsibility is yours – so don’t neglect it.

If you’re moving home, be sure to get a full and comprehensive understanding of your new area. Fill out a property detective report and find all you need to know about local amenities, noise, crime rates, schools, flight paths and more. Enter your postcode to view your Property Detective report here.

The Pros & Cons of Property Buying

The Pros & Cons of Property Auctions

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Gone are the days where property auctions are only for big money investors or buyers. This form of house sale has seen a recent surge in popularity as hungry homebuyers are eager for a bargain. Mainstream buyers and sellers are now commonly seen at these events. Unfortunately, this form of buying can be unpredictable and prone to falling flat. Here’s our guide to the pros & cons of property auctions.

What Happens at a Property Auction?

Property auctions see a high paced sale of numerous homes in a single sitting. Usually these would have been planned in advance. Most attendees know what they’re bidding for before the event has started. Unless buying the property outright, most bidders agree a mortgage in principle before the event.

All houses up for sale will mention a guide price. Don’t fall into this trap, these tend to be lower than what the property is actually sold for. A seller often places a reserve price on the lot to ensure it doesn’t sell below a specific amount – this is usually confidential.

Immediately after the auction, buyers must complete all legal paperwork and pay a deposit (usually 10%). Buyers only have around 28 days to pay in full once an auction has ended. Fast paced, nerve wracking and competitive, property auctions can be daunting.

Pros of Property Auctions

There are numerous positive aspects to auctions. This is why buying this way has seen a surge in popularity:

  • Bag a bargain – Property auctions are renowned for offering the occasional hidden bargain. The house could be undervalued, have planning permission or even be a nice little project for renovation.
  • No fixed prices – Irrelevant of market value, there is no fixed price (except the reserve). The house is simply sold to the highest bidder.
  • Fast paced – Things move quickly with property auctions. A deposit is paid on the day and the transaction is complete after 28 days.
  • Reliability – Have you experienced the stress of being gazumped or losing out due to the chain falling apart? Property auctions remove this problem entirely.
  • Less fees – Auctioneers charge a buyer’s premium of 1.5% and an administration fee of around £150. This usually works out to less than Estate Agent fees.

Cons of Property Auctions

Property auctions are precarious places to be. For those who are prone to get carried away, you really should bring a friend. After all, when that hammer falls you’re in a legally binding contract (no pressure!).

  • Waste of effort – It takes a lot of effort to plan for a property auction. If you’re outbid you’ve wasted a lot of time, effort and money.
  • Ready to cough up? – As soon as you win an auction, you’ve got to pay the deposit. The rest of the money has to come within 28 days. Don’t buy something you can’t afford.
  • Not all relevant – There are plenty of auctions out there that aren’t relevant to you. Commercial properties and dilapidated houses are usually of no interest to the average home buyer.
  • Refurbishments – The majority of homes bought at auction need to be renovated in some way or another.
  • Secure finance – It can be a lot easier to secure finance when buying a home through the conventional route.
  • No way out – Once you’ve won and the hammer’s fallen, you’re in a legally binding contract – no backing out now!
  • Guide prices – Guide prices at auctions are usually brought down to attract interest. Expect to pay more.

How to Prepare for an Auction

There are some key things to do before bidding at a property auction. Don’t skip any steps here. Trust us, it’ll save you a lot of money and stress:

  • Research – As with every other major life choice, do your research and you’ll be rewarded. Study the properties on offer. It’s also worth watching other auctions to get a feel of what you can expect.
  • View the Property – Try to do this more than once if possible. You need to know it’s definitely what you want. Houses sold at auction are usually in bad shape so remember to keep an open mind.
  • Do a check on the neighbourhood – Find out key information about the local area, potential noise complaints, local amenities, crime rates and more with a Property Detective report.
  • Mortgage – Visit a mortgage advisor, they’ll be able to help you secure a mortgage in principle.
  • Legal – Do the necessary legal checks and ensure you scrutinise any legal paperwork given to you.
  • Arrange a survey – This is an absolute must! You should never go to buy a property at auction without one, you never know what issues lie under the surface.
  • Budget – Decide on a budget and absolutely stick to it. Take a friend with you if you’re concerned about this.

As part of your pre-auction checks, be sure to research the local area. Find out about noise pollution, crime rates, local amenities, flight paths, schools and more with a Property Detective report.

House Viewing Checklist: Get the most out of your property hunt

House Viewing Checklist: Get the Most From your Property Hunt

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So, house hunting is tough! The problem is, you’re often so excited about the possibility of finding your dream home that you overlook the details that actually need your attention. It’s always good to be prepared for viewings. This is where we come into the frame. We’ve put together a handy house viewing checklist so you don’t have to worry. Get the most from your property hunt and good luck out there, it can be wild.

A Few Tips to Start

First thing’s first, before we start telling you about what you need to look for, let’s offer a few insights. It’s important to do some thorough research!

Here are some solid tips that’ll give your home hunt a helping hand:

  • Do a drive by – Have a look at the outside of the property and surrounding area. Sometimes this can be enough to put you off a property.
  • Never go alone – It’s important to attend the viewing with a friend, family member or partner. A second pair of eyes is always helpful – especially if you fall in love with the property.
  • Be friendly – Remember you’re trying to buy this property (usually for less than the asking price). You’re likely to be competing with others. Make yourself memorable and build rapport with the seller.
  • Inspect, don’t move in – It’s tough but when viewing a property, you should inspect it. Don’t mentally move in before you’ve bought it. A dream home soon turns into a haunted house if there are some serious underlying issues you’ve missed.
  • View more than once – Be eager and pop round more than once. This will show interest and help you spot potential problems.
  • Spend as long as you want – Don’t just rush around the house quickly. View for an extended period of time. Get a feel for the house and its pros & cons.

House Viewing Checklist

Get a pen and paper ready – here’s what you should be looking for when viewing a property:

  • Structure – Check the exterior, look for damp, cracks in walls, loose tiles, broken guttering, etc. Ask questions about any issues you find.
  • What do you smell? – Have a sniff around (literally). Any musty smells or bad drainage?
  • What can you hear? – Any noisy neighbours or train lines nearby?
  • Check the taps – What’s the water pressure like? How long does it take for hot water to come through?
  • Let there be light – Do the light switches work?
  • Check for fresh paint – A common way to hide damp is by painting over it.
  • Check the bills – No one likes nasty surprises. Know what to expect.
  • Boiler – What’s the condition and age like?
  • Any renovations? – Ask about any work that’s been done on the property.
  • Land – See what land comes with the property and what you’re actually buying.
  • What’s included? – Sometimes white goods can come with the house. If they do, check out what condition they’re in.
  • Cupboards and draws – Are they functional and clean?
  • Storage – Is there sufficient storage available?
  • Layout – Will your furniture fit? Is the floorplan desirable?
  • Damp – Search every corner, ceiling and window.
  • Windows – Look for condensation, cracking sealant as well as rotten/broken frames.
  • Phone signal? – It’s pretty frustrating if your home has a poor reception.
  • Walls – Are there any ‘ripples’ in the wallpaper?
  • Any trees? – Excess leaves and trees can cause structural issues.
  • Pollution – Pollution in the surrounding area is becoming an increasing issue for homeowners.
  • Japanese knotweed – This horror plant can ruin your chances of getting a mortgage and cost £20,000 to remove.
  • Council tax – How much is the council tax?
  • Parking – Check to see whether you have an allocated parking spot. If not, is there adequate parking for you?

Don’t forget checking out the neighbourhood too. When moving into a home, it’s important to understand what the crime rates, noise pollution, amenities and local schools are liked. Thankfully, with a Property Detective report, you can find all this and more.

What to expect when making an offer on a property

What to Expect When Making an Offer on a Property

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Buying a house is the biggest and most stressful purchase you’ll ever make. In an article entitled ‘Confessions of an Estate Agent’, The Telegraph explains “we don’t so much purchase a house, as prise it out of the hands of the people who own it”. The truth is, making an offer is a minefield and you’re going to need all the help you can get. This is why we’ve put together a few simple tips about the process and what you can expect.

Before the Offer

There are some serious things to consider before making your offer. You have to research thoroughly, including the surrounding area. Keep your eyes peeled and be aware of what other local properties are selling for. If every house on the street is sold for lower than asking price, your offer should match this trend.

It’s also important to remember the estate agent wants as much money from you as possible. You’ve got to remain impartial for the viewing. Don’t rave about how you’ve just found your dream house. This will give the estate agent the opportunity to squeeze you of all the money they can. Your best approach is to downplay how much you’re willing to spend. Play it cool at viewings, ask scrutinising and testing questions. This will help when it comes to the offer stage. It’s also good practice to agree with the agent what fixtures and fittings will be included. This will avoid any nasty surprises or awkward discussions later on. It’s always best to get this list in writing.

Prepare for Negotiation

So you’re ready to actually submit an offer, it’s time to start negotiations. What must be remembered is that every offer you make must be passed on by the estate agent. This doesn’t stop the estate agent from trying you to up your price from that initial moment. In the Telegraph’s ‘Confessions of an Estate Agent’ experienced professional David Pollock advises buyers:
“Don’t be put off by the ‘ffffssss’ noise. This is the sucking-the-teeth-in sound I make, when a buyer puts in an offer that I think is too low. Quite often, that’s all I have to do for a buyer to start backtracking and upping their offer.”

It’s true that the negotiation stage is like a game of chess. Go in too high and you’ve got less room to manoeuvre. Go in too low and you’re likely to get laughed at. Meet the asking price and risk being taken for a ride. The exception to this rule is London, listen to the advice you’re given because the shape of the market is different in the capital.

Everyone will advise you not to get picked up in the excitement of the moment and overstretch your budget when negotiating. This is a serious mistake that you’ll be forced to live with. It’s always best to agree a budget beforehand, acknowledge how much you can move from it and then stick to your guns. The property isn’t perfect if it’s out of your price range.

Sell Yourself

When competition’s fierce, it’s important to make yourself seem like the most appealing option. There’s a strong likelihood the seller will have a close attachment to the property. If you look like you’ll take good care of it, they’ll be more likely to choose you over another competing buyer.

This can also relate back to the chain. If you don’t have a chain, you’re a very attractive option. If you do, it’s best to demonstrate that your property’s sale is in hand. If you have a ‘mortgage in principle’ agreed, it’s best to notify the seller. This way, you look like a serious buyer.

Survey the Property

We cannot stress this enough. You can’t let your feelings get in the way of such an important decision. This is why the survey is so important. Use the expert opinion to your advantage. You can use the outcome of the survey to negotiate a lower price or simply reassess your options.

Before you approach the offer stage, it’s important to be in the know about your prospective area. Take a look at a Property Detective report today to get the latest updates on crime rates, schools, amenities, noise pollution, flight paths and more.

Common Home Buying Mistakes

Common Home Buying Mistakes

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Buying a home is tough and stressful. In fact, moving home is widely cited as one of the most stressful things you’ll do in your life. The buying process is strewn with pitfalls and traps. Whether you’re a fresh faced first time buyer or seasoned pro on the property ladder, you’ll do well to avoid these common mistakes.

Looking at Properties That Lenders Don’t Like

Lenders are fussy, they don’t like to take chances. There are some types of properties that lenders just don’t like. If you know this, you can either adjust your search accordingly or approach specialist lenders. So what sort of properties can lenders get awkward about?
• Unusual constructions – Any house that isn’t made from bricks and mortar.
• High rise flats – Tower blocks like ex-council flats, especially if they have problems with lifts or are surrounded by council residencies.
• Flats above shops – Any residency where multiple people have access.
• Short leaseholds – Flats with a leaseholds of 80 years or less.
• New builds – Lenders will value these as lower than the asking price.
• Former industrial land – The chance of contamination makes these properties difficult.
• By the sea – Coastal erosion can be a real cause for concern.
• Converted homes – If you’ve opted for a converted windmill, pub or lighthouse, you may have to visit a specialist lender.
• Grade 1 listed properties or thatched roofs – The cost of repairs can be a real deal breaker here.

Problems to Keep a Lookout For

When you view a property, it’s important to remember to look past the smell of coffee or attractive décor. Look at the property itself and don’t get blinded by the moment.

Inside the property, it’s important to look for damp, mould and rotting window frames. A weak flushing toilet or poor water pressure are important to spot early. If there are any obvious problems, it’s not the end of the world. It would be worthwhile getting a quote on how much repairs would cost. This can later be used as a bargaining tool.

Now it’s important to look outside the property. Always do your research thoroughly! Is there a large tree nearby? Listen out to see how noisy the neighbours are. It’s worthwhile finding out whether the area suffers from floods regularly. What’s the parking like?

General Advice

Who’s better to give advice on buying a home than those who have been through the process themselves. Here’s some advice from home buying veterans:
• Love at first sight isn’t rational when buying a home.
• If it’s right, it’s right. Stop looking for a better deal.
• Get a credit report before you apply for a mortgage, your score might not be as good as you think.
• Don’t mistake the lender valuation for a survey, they are not the same thing.
• Don’t take mortgage advice from an estate agent, they are trying to sell to you. Always get a solicitor to help you manage the process!
• Know your budget and stick to it.
• Don’t underestimate additional costs.
• Prepare for the strain on your relationship.
Try not to make yourself homeless.

This advice makes the house buying process sound very difficult. The truth is that it’s not easy at all. It’s important to know exactly what you’re getting into and what the area you’re living in is like. With a Property Detective report, you can find out about local crime rates, schools, amenities, noise pollution, flight paths and much more. Get yours here.