Buyers Guide

Buying a Property - Considerations

Your budget

The first thing you need to do is decide how much you can afford. You will need to look at how much deposit you have available yourself and how much you can borrow. Usually you will apply to a building societies or a bank for a mortgage.

Some building societies now provide buyers with a certificate that states that a loan will be available provided the property is satisfactory. You may be able to get this certificate before you start looking for a property and this may help you to have your offer accepted by the seller.

Before finally deciding how much to spend on a property, you need to be sure you will have enough money to pay for all the additional costs.

These include:-

• survey fees
• valuation fees
• Stamp Duty Land Tax. This is payable on properties costing more than £125,000 and is at least 1% of the purchase price (in a limited number of areas, designated as 'disadvantaged', it is only payable on properties costing £150 000 or more)
  
  

  Residential property - purchase price	Rate of Stamp Duty Land Tax
  up to £125,000	0%
  £125,001 - £250,000	1%
  £250,001 - £500,000	3%
  £500,001 or more	4%

  
  
• land registry fee
• local authority search
• fees, if any, charged by the mortgage lender or someone who arranges the mortgage, for example, a mortgage broker
• the buyer’s solicitor’s costs
• VAT
• removal expenses
• any final bills, for example, gas and electricity, from your present home which will have to be paid when you move.

You should also take into account the running expenses of the property you wish to buy. These may include:-

• heating, lighting and water rates
• community charge/council tax (in England and Wales)
• ground rent, if the property is leasehold
• service charges, if the property is a leasehold flat
• insurance costs, including life insurance, buildings and contents insurance.

You will also have to pay a deposit on exchange of contracts, up to 10% of the purchase price, a few weeks before the purchase is completed and the money is received from the mortgage

Deciding on a property

It is important when you find your property to arrange to look over it to two or three times to get some idea of whether or not you will have to spend any additional money on repairs or decoration and when you are completely happy, you may then decide to make an offer.

Is the property leasehold, freehold or commonhold?

Freehold property

If the property is freehold, this means that the land on which the property is built is part of the sale and no ground rent or service charge is payable.

Leasehold property

A property may be leasehold, which means that the land on which the property is built is not part of the sale. You have to pay ground rent to the owner of the land - who is called the freeholder.

The length of a lease can vary and you should check that the length of the lease on the property you are interested in buying is acceptable to the mortgage lender. In addition to ground rent on a leasehold property, you may have to pay an annual service charge. This usually happens with a flat. The service charge covers such items as maintenance and repairs to the buildings, cleaning of common parts and looking after the grounds.

A group of leaseholders living in the same building may have a right to jointly buy the freehold of the building or take over its management.

Commonhold property/Share of freehold

If the property is commonhold/share of freehold, this means that you can buy the freehold of a flat and own common parts of the building jointly with the owners of other flats in the building (known as a commonhold association).

In commonhold/share of freehold a ground rent or service charge is not payable. However, a share of the commonhold association's expenditure on maintenance, insurance and administration will be

Making an offer

When you decide you would like to buy a particular property you do not necessarily have to pay the price being asked for it by the owners. You can offer less if, for example, you thinks there are repairs to be done which will cost money.

If the owners do not accept the first offer put to them by you, you can decide to make an increased offer. There is no limit on the number of times you can make offers on a property. If you make a written offer it will always be made subject to contract. This means that you will not be committed to the purchase before finding out more about the state of the property. If you make an oral offer this is never legally binding.

When your offer has been accepted

When your offer for the property has been accepted you will have to consider the following:-

• whether a holding deposit is payable
• arranging a mortgage-
• whether a survey is necessary
• who will do the necessary legal work

We will assist you on all these points