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How to find a place to live and buy it.

Where on Earth shall I live? First of all you need to think about the location and size of house that is ideal for you.

Location: Do you want to live in a city or the country side? Think about factors like your job, nearest shops and if there are good links to places you travel to frequently. Think about the future, things like local schools might be a good idea if you’re moving to a new place with a significant other. And if there are any things in particular that you want to avoid living by, like an airport or a landfill site.

Size matters Who is moving? Just you, or do you have your whole family to think about? How many bedrooms do you ideally need? Are you going to be spending the rest of your life there, if so a flat on the 14th floor might not be great for those old legs. When you go and look at houses, do you want to move somewhere that needs a lot of work doing to it, or just somewhere you can move straight into.

How much do I have to spend? Look at how much money you can afford to spend on a house And work out how much you need to borrow. You will need 10% of the house selling price to pay the deposit on exchanging of contracts. Most people are given mortgages by societies or banks and if you have a good credit score you’ll be allowed a mortgage.

Apart from the actual house, you have to spend money on: - Survey fees - Valuation fees - Stamp duty - Land registry fee - local authority searches - fees charged by mortgage lender - The solicitors costs - VAT - Removal expenses - Final bills for your old house

You should also think about the running costs of the house you are about to buy.

Larger Houses = Higher Bills - Council tax - Water rates - Ground rent on leasehold properties - Service charges if you’re looking at a flat - House and contents insurance

Where do I find a house? Places you can look for a house: Estate Agents Property pages of newspapers New house development companies for any new builds in the area Look online

Deciding on a Property

Arrange to look at any houses that catch your eye When you look around make sure you look at any areas that may need improvements

- Normally a potential buyer visits a few times - before deciding to make an offer -

Energy performance of houses: You will receive energy performance details for the house. Using a scale A to G, the certificate is accredited by a domestic energy assessor.

- If an energy performance certificate isn’t provided Trading Standards can issue a penalty charge. -

Freehold Property Where the land that the property is built on is part of the house sale. You own the whole lot.

Leasehold Property Where the land that the property is built on is not sold as part of the sale. Like if you buy a flat. and you will have to pay ground rent to the land owner. Lengths of leases can vary and you should check that the length of the lease in the small print if you’re looking at a flat. If there are only a few years left on a lease then you should consider the value of the property, or look somewhere else. Mortgage lenders won’t lend you money if the lease is too short. On leasehold properties you may have to pay an annual service charge for stuff like building maintenance and cleaning in the common areas. A group of lease holders living in the same building may have the right by buy the freehold of the property jointly

Commonhold Property This means 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

How to make an offer You don’t necessarily have to pay the price that you see on the for sale paperwork You can always offer less if you think there is a lot of work that needs to be done. And if your lower offer is not accepted you can always increase your offer. If you make a written offer it will always be subject to contract. Which means you won’t be committed to the purchase before finding out more about the state of the property through inspections.

When the offer has been accepted you will need to think about ... - Arranging a Mortgage - If a Holding Deposit is payable which is a small deposit to the estate agents of between £500 and £1000 to show that you’re a serious buyer.

- If a property survey is necessary - Who will be in charge of any legal work - And, if you’re buying the property jointly with someone else

What’s a Mortgage and How do I get one?

A mortgage is a loan for a fixed period of time. If you don’t keep up to the payments the lender has the right to repossess your property.

Types of Mortgage: Repayment mortgage: The capital that is borrowed and repaid gradually over the period of the loan. Normally in monthly instalments, with amount interest as well.

Interest-only mortgage: You pay interest on the loan in monthly instalments to the lender. And instead of repaying the mortgage each month you pay into a long-term savings plan which should grow enough to clear the loan at the end of the mortgage term.

Where to get a mortgage from: - building societies - banks - inurance companies - large building companies - government backed sources, available to some groups of people like first time buyers or people in financial difficulty.

- Only borrow what you can afford to pay back Normally they take about 3 weeks to get sorted from the application to the formal offer being made by the lender.

Mortgages, continued... The mortgage lender will want to have the property valued so they know they can get the loan back, incase you stop paying the mortgage and the house has to be sold again. If you have to take a high percentage of loan out the lender may make you take out extra insurance to cover the extra amount. Using a broker to get a mortgage: A broker may be an estate agent or a mortgage or insurance broker. They will act as an agent to introduce you to a source of mortgage loan to help buy you a home. You might want to find a broker to save yourself time shopping around.

Getting a Survey Full Structural Survey: Best option for properties that are large, and more than 80 years old. Or if the condition is not too good.

Intermidiate/house or flat buyers report: A survey of the condition of the parts of the house that are easy to see and get to. Good for properties built in this century. Further inspections may be recommended in this report. This report is much cheaper than a full structural survey.

Both reports will advise you of any problems identified and the costs of these. If the report shows up problems with the property you will have to consider if you still want to go ahead with the purchase or if you want to negotiate further with the seller.

There are two ways to buy a house jointly with someone...

Beneficial joint tenants Where the property belongs to you and other owners jointly. And you can’t remortgage or sell the property without agreement from the other owners. You don’t own specific shares in the property and you can’t give away your share. If you die, the property passes to the other owners.

Tenants in Common

This is when the property belongs to you and the other owners jointly, but that you all also own a specific share of the value. Normally this happens with an apartment building for example.

You can decide how much each share will be. You can give away, sell or mortgage your share. And you can leave your share to whoever you like in your will.

Who’s to do the legal stuff? The legal process of transferring the ownership of the property from the present owner to the buyer, known as conveyancing.

Using a solicitor: Most solicitor firms offer conveyancing services.

Using a licensed conveyancer: They’re not solicitors but they’re licensed by the council for Licensed Conveyancers

How much will this cost? Contact more than one solicitor or licensed conveyancer as there isn’t really a set scale of fees for this service.

- make sure you find out if there will be a charge if - the sale doesnt go through. check how much work is involved in their quoted cost check if it includes stamp duty, search fees, land registration fees, expenses and VAT ( get a breakdown of these costs )

More legal bits: It can take up to 7 weeks between having your offer accepted to exchange of contracts. And then another 4 weeks from the exchange of contracts to actual completion.

Local Searches: These searches are made to the local authority. and include searches into any proposed changes or developments in the area. The searches also check the Land Charges Register about anything affecting the property like tree preservation, if it is a listed building, or in a conservation area. Also included, is a set of standard questions about property boundaries, neighbourhood issues, and any fixturs or fittings that will remain in the property.

Paying the deposit: Whilst your solicitor or conveyancer is making enquiries is a good time to sort out how you’re going to pay the deposit. Remember you only need about 10% of the final agreed selling price of the property, but there are options like getting a bridging loan from your bank, although these can have high interest rates and work out to be expensive. Insuring the property: Make sure your insurance is arranged from the date of exchange, as once contracts have been exchanged you’re responsible for the property.

Exchanging Contracts - Final contracts are prepared when you and your solicitor are both happy - with the final outcome of all of the enquiries. -

All these things have to be sorted too...

- Surveyors reports have been received and acted upon if necessary. - The formal mortgage offer has to have been received. - Arrangements of the 10% deposit payment have been made. - The completion date has been agreed. - You and the seller each have a copy of the final contract that you both must sign. And at the exchange of the contract both you and the seller are legally bound, and the sale has to go ahead. - You have to start making arrangements for gas supply, electricity, telephone line and internet. and check the seller has taken final meter readings

The last tiny bit Completing: On the agreed completion day: The mortgage lender releases the money. All deeds to the property are handed over to your solicitor seller will hand over the keys and leave the property by an agreed time. The solicitor will usually send their account to you on or soon after the completion date.

Now you just have to pack up all your stuff, shove it in a van and move in to your new home!

This booklet is part of the How to guides for real life series designed and created by

How to buy a house  

Most stuff you need to know to find somewhere to live!