Buying UK property

Jargon and professional services needed when buying a house explained

1. Estate Agents - Using an estate agent - Buying a house Estate Agents Work for the seller so their main concern is for the seller they provide advice and property details to buyers on behalf of the seller of the house or flat
   
   
2. House details - The estate agent provides written description of the property (property particulars). It is against the law for an estate agent to make false or misleading statements about a property. If the particulars say the property has gas central heating and double glazing , it must have these features. remember to check for any details on fixtures and fittings
   
   
3. Leasehold or Freehold - Freehold the seller has full ownership and the right to sell the property. Most houses are freehold, Leasehold the seller has a lease on the property for a set time period. The seller can sell the remaining time on the lease but the property is actually owned by a freeholder. Most flats are leasehold.
   
   
4. Making an offer Make Offers via estate agents, If you want to buy a property, you must first make an offer through the estate agent. This can be above, below or the same as the asking price. Before making an offer, Seek legal guidance from a solicitor.
   
   
5. Offer to Seller - When you make an offer, the estate agent must pass it to the seller promptly and in writing. The only exception is if the seller has told the estate agent some offers are not acceptable, such as those below a certain amount. Estate Agents must treat all buyers fairly. They must not hold back offers from buyers who do not want to use their other services. For example, you should not be treated differently because you do not arrange a mortgage through the estate agent.
   
   
6. Other Offers - The estate agent doesn't have to tell you about other offers which have been made. It is not always the highest offer that wins. The seller may decide to sell to the person who can proceed with the sale quickest.
   
   
7. Offer Accepted - If your offer is accepted, the estate agent will send you a letter confirming the details. But at this stage there is no legally binding contract. The buyer can still receive and accept other offers, and both you and the seller can renegotiate the price and any conditions of the sale right up to the point when contracts are exchanged or accepted.
   
   
8. Gazumping - Although the seller may have accepted your offer, the estate agent must pass on any further offers received unless specifically told not to by the seller. This can lead to GAZUMPING where a higher offer is put in and accepted at the last minute before contracts are exchanged.
   
   
9. Deposits - When you make an offer, the estate agent may ask you to pay a pre-contract deposit of a few hundred pounds to show your commitment to buy. This is usually held by the estate agent. Before you part with any money, find out from your solicitor if a deposit is necessary. If it is, check whether it is refundable if contracts are not exchanged. When you pay, get a detailed receipt from the estate agent. When contracts are exchanged, you may have to pay a bigger deposit, usually 5 or 10 per cent of the purchase price. This will be held by the seller's solicitor.

Hidden costs when buying a house

1. Arrangement Fee - A fee charged by lenders to cover the cost of setting up the mortgage. Ask how much before you apply for the mortgage
   
   
2. Lender's Valuation - (Basic Valuation) Approx cost for £100,000 house = £175.00. This checks that what you are paying and percentage you are asking for in a mortgage does not exceed the valuation of the house The cost depends on the price of the property but ranges from £175.00 for house costing £100,000 upwards depending valuation of the house
   
   
3. House Survey - Approx cost for £100,000 house = £350.00. You should have your own independent detailed survey carried out to check for any problems There are two types of survey, A Homebuyer's Report, An estimation of the value of the property Level of repair and maintenance ( i.e. condition overall ), A Full Structural Survey which can cost anything up to £1,000 An estimation of the value of the property Level of repair and maintenance ( i.e. condition overall ), A much more detailed look at the structure of the house, Having a survey is important because It picks up any issues with structure of the house and things like electric, gas, floors, damp etc. It can often be used as a bargaining tool in price negotiation as quite often the person selling the house may have been unaware of any problems
   
   
4. Legal Conveyencing Fees - Price rough Guide 1% of £100,000 = £1,000. Some solicitors will offer a flat fee for conveyencing while others may charge 1% of the value of the house ask at the time you talk to the solicitor ( there are often additional costs you may be charged ) Local Authority and other Search fees ( £150 )performed on behalf of you which may additional to the Conveyencing fees
   
   
5. Government Stamp duty - Price Rough Guide 1% of £100,000 = £1,000 There are different bands but houses between £60,000 and £250,000 is 1%
   
   
6. Land Registry Fee - Rough Guide for £100,000 house = £200 There are different bands but houses between £60,000 and £250,000 is 1%
   
   
7. Mortgage Indemnity Guarantee - These fees can be significant if you are applying for a mortgage for over 75% of the house price ranging between ( It is important to ask your lender or mortgage advisor.) These are used to protect the lender due to the higher risk involved with a higher percentage mortgage As you can see from above the costs of buying your £100,000 house will range between £2,575 and £4,000 and it is best to have this money before you start.
   
   

Costs involved when moving house

1. House Movers Removal companies will move you and can provide a full range of services including Renting you the crates Packing services and of course Moving your furniture and positions from one home to another It is impossible to provide an idea of costs due to the variables involved distance, amount of furniture etc. but make sure you obtain 3 quotes and also check for references and their insurance coverage
   
   
2. Reconnection / disconnection of services You may possibly need to pay for disconnection of services at your old home and reconnection of services at your new home Telephone , Electricity, Gas , Cable, etc. Also remember to inform local authority re: council tax
   
   
3. Insurances You will need insurance for the following often required my the mortgage lender as a condition of supplying a mortgage Buildings insurance premiums Contents insurance premiums
   
   
4. Carpeting furniture / fixtures and fittings An important part of buying a house is to check fully fixtures and fittings included in the sale I.E Carpets Curtains Kitchen ( cooker fridge etc. ) These can be a big problem if you have not checked and made assumptions to your expenses when buying a house

Some of the monthly bills when owning your own home

1. Mortgage Mortgage payments
   
2. Major Utilities GAS Electric Phone Cable
   
3. Loans Credit Cards Car Loans Personal Loans Overdrafts
   
4. Insurances Buildings insurance Contents insurance Dependent on mortgage type endowment
   
5. Car running or transport costs Petrol Insurance Maintenence Car loan repayments
   
6. And I suppose you had better eat to stay fit enough to go to work to pay all these bills Food Entertainment etc

Why do most people in the UK want to own their own home

Lets be hypothetical

Why do house prices continue to rise so quickly in the UK?

Why do interest rates change so often

Are house prices guaranteed to grow at the rate they have over the last 20 years?

The Average Price of houses in each region in the UK for June 2006