Buying a home (England and Wales)

Relocation can provide an exciting opportunity to start afresh, in your dream home. Perhaps you’ve always wanted to live in the country, or the city, have a bigger garden, be closer to work or school. This could be your chance!

However, don’t rush into any decisions. Consider carefully what you want, what you need, the sort of pitfalls you may encounter along the way, and how you can avoid them.

Below, we outline the key steps in property purchase.

Step 1 – Fixing your budget

Before you start your property search, work out what you can afford to spend. Consider how much you will probably be able to borrow (if you plan to take out a mortgage), your savings (if you intend to use them), and how much you are likely to have left from the sale of your present home once any existing loan is paid off. A local estate agent can advise on current market value.

In addition to the purchase price, factor in the other costs of buying. These include:

• Legal fees (allow several hundred pounds)
• Land Registry fee (see www.landregistry.gov.uk)
• Stamp Duty (payable if the purchase price is £125,000+). See www.direct.gov.uk for rates
• Survey fee
• Buildings insurance premium
• Removal expenses
• Mortgage lender’s fee (if applicable)

Step 2 – Organising your finances

If you’re going to use savings, plan ahead, so you’ll be able to make the necessary withdrawals without forfeiting interest.

If you’re going to borrow, arrange a ‘mortgage in principle’. This means that your lender agrees to let you borrow a certain amount, on certain conditions, the main one being that they are satisfied with the valuation on the property you choose. Having your mortgage offer organised in advance will enable you to proceed quickly once you have found your new home.

Make an appointment with a bank or building society, and take with you all relevant financial information, including details of your earnings. A representative will discuss the options with you. Alternatively, consult a mortgage adviser. For a relatively small fee, he or she will examine your options and make an informed recommendation.

Step 3 – Determining your requirements

By now, you will have a good idea of what you can afford. Your next step is to decide on the sort of property you are looking for: house or flat, new or older, number of bedrooms, and so on. Some of your requirements will probably be negotiable, while others will not. The less rigid your requirements, the more likely you are to find an acceptable property within a reasonable timescale.

Step 4 – Starting your search

Register with the local estate agents in the area you are moving to, and check their websites regularly. You might consider using a relocation agent. To make best use of time, arrange in advance to view a number of properties when you visit the area.

When making an offer, do so through the estate agent, not direct to the property owner (unless it is a private sale). The agent will liaise with the owner on your behalf. Your offer should be made ‘subject to contract’. This enables either party to withdraw at any time before exchange of contracts.

In-depth area guides for most parts of the UK, broken down into smaller regions, can be obtained from Profile Locations (www.profilelocations.co.uk). As well as describing potential places to live, these contain useful information about education, lifestyle, etc.

Step 5 – Instructing a legal adviser

Although you can save money by doing your own conveyancing, you will undoubtedly spend a good deal of time, which you can probably ill afford during what will be a very busy period. Most mortgage lenders, moreover, will insist on a professional handling the legal formalities.

Choose your legal adviser (a solicitor specialising in conveyancing, or a licensed conveyancer) when you start your search for a new home, rather than leaving the decision until an offer has been accepted. Word of mouth is often the best way. Ask for written details of charges before instructing.

Your employer, or their relocation company, if one is retained, may have a panel of recommended solicitors you can choose from. Their fees will be competitive, so do investigate this possibility.

Among the main tasks your legal adviser will carry out are:

• Approving the draft contract prepared by the seller’s legal adviser, following any necessary enquiries and negotiations. The draft contract sets out the price, terms and conditions relating to the transaction
• Undertaking local authority searches*
• Checking details of title*
• Ensuring that a satisfactory mortgage offer has been issued
• Establishing that all parties are ready to exchange contracts if there is a chain
• Agreeing a completion date with all parties

* Home Information Packs (HIPs), which must now be issued for properties with three or more bedrooms by the individual or organisation responsible for marketing them, will contain this information. However, there is concern that the searches contained in the packs may not be acceptable to some mortgage lenders. We recommend discussing this with your legal adviser.

Step 6 – Exchanging and completing

After obtaining a valuation, either for your own purposes or for your mortgage lender, and when all parties in the chain are ready to proceed, exchange of contracts takes place. At this stage, you are required to pay a deposit (normally 5–10% of the purchase price), and you become liable for insuring the property. It is difficult to withdraw subsequently without incurring financial penalties.

At exchange, a completion date is agreed, when you will pay the balance of the purchase price, and the property will become yours.

If you are buying a newly built home, your solicitor will request a standard form of contract from the developer. The procedure will then continue as above. Some developers offer a fully self-contained system, with the company providing advice on a range of matters, including financial and legal ones. We recommend, however, that you retain your own solicitor, to avoid any conflict of interest.

© 2007 of Re:locate magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein.