The first step should be to choose a region in England where you want to buy the house. It is good to choose the area earlier. You should take the following factors into account: distance to work, school availability in the area and public transport. Buying a property abroad is an important decision in your life, therefore each aspect of moving and of the new area should be taken into account and analysed thoroughly.
- A house or a flat? Number of bedrooms? It is worth remembering that a bigger property means not just a higher price but also higher costs of living. Check your budget and financial circumstances thoroughly. Buying a house in England should be looked at from many angles.
- Contact a mortgage adviser to check your credit affordability. Remember that the agreement in principle depends on verifying your income, credit history and the price of the property.
- When you decide all the above, you can start the process of buying a house in the UK. Contact property agencies local to the area you have chosen. Don’t forget to search online – websites such as Zoopla & Rightmove give you the chance to specify exactly where you want to live, how many rooms you want and many other preferences you might have. You also get a chance to receive regular notifications of new adverts. Make an appointment to view the property.
- After finding your perfect home in England, you can make an offer. It is usually done through a property agent. It is worth emphasizing that the offer depends on its estimated value and the contract. Additionally, you may demand that the property is no longer advertised on the market. If the offer is accepted by the seller, the process of buying a house in the UK moves on to the next stage.
- It is now time to make a full mortgage application. The value of the property is also estimated and the Mortgage Valuation is prepared for the credit provider. You can also consider a more thorough report – Home Buyers Report or a full one – Building Survey.
- At this point you should have a Solicitor or Conveyancer, who will represent you legally in the whole process of buying a house in the UK. They will be responsible for many things – including the confirmation of the property certificate, contract verification or making Local Authority Searches.
- After the final acceptance of the contract by the notary public and confirming the details with the credit provider, a deposit has to be paid into your notary’s account. Then there is the Exchange of Contracts. Also, the Completion date is set then – it is a date on which you will get access to your new property. After Exchange of Contracts, make sure that you have a home insurance. It is also important to insure the credit takers. Life insurance, critical illness cover and income protection are especially important.
- Completion. At this stage your representative transfers the agreed sum of money for the property to the solicitor of the seller (your deposit and mortgage). You now have to pay for the legal fees and move. If you have purchased a house worth more than £125,000, you will also have to pay Stamp Duty, maximum 30 days after the Completion date.
The most significant costs in the process of buying a property.
- Solicitor and legal fees – £800-£1500
- Stamp Duty Land Tax (max. 12%)
Price of the property Tax rate £0 – £125,000 0% £125,001 – £250,000 2% £250,001 – £925,000 5% £925,001 – £1.5 million 10% Over £1.5 million 12%
Example 1: Value of the property purchased £180,000 – tax to pay £1,100
Calculations: £180,000 – £125,000 = £55,000£55,000 x 2% = £1,100
Example 2: Value of the property purchased £300,000 – tax to pay £5,000
Calculations: £300,000 – £250,000 = £50,000£50,000 x 5% = £2,500
£250,000 – £125,000 = £125,000£125,000 x 2% = £2,500
First time buyers will pay zero stamp duty on the first £300,000 of any home costing up to £500,000 (effective from 22 November 2017 until further notice).
- Broker’s fee – typical fee at Prestige Financial Services is £299
- Basic Mortgage Valuation £150 – £350
- Mortgage arrangement fee (payable to the lender) – £100 – £1,000 (in most cases, you can add this amount to the amount of mortgage
- Costs of moving £300 – £500
The aforementioned calculations are estimates only. The final cost depends on individual circumstances and many other factors, which you should consider when preparing a budget for buying a property in the UK.
Important! The process of buying a property in Scotland is different.
Prestige Financial Services offers advice on mortgages for people planning to buy a house in England, Wales and Northern Ireland.
Do you need help? Call us on 0203-488-1751 or fill out the contact form below and we will call you back.