The number of buy-to-let mortgages products available on the market in June 2019 was the highest in over ten years at 2,396, according to a new report from Moneyfacts. That represents a 21% increase in the number of available BTL mortgage products in the year to June, compared with the same period in 2018.
As George Osborne continues to support Prime Minister David Cameron’s campaign to persuade Britons to vote to remain in the European Union at the June 23rd referendum,
When you’re selling your current home and buying a new one to move into, there’s a lot of important things that need doing and paying for over a relatively short space of time. While you’ll be the recipient of funds from the sale of your existing home, the costs involved when it comes to completing a property sale and purchase are significant.
We’re here to guide you through all the possible costs involved to help ensure you’ve budgeted properly for one of the most stressful things a person a can do!
Aside from the purchase price of your new home, we’ve broken down the different services you will need to pay for when you making a property sale and purchase, otherwise known as moving house. As you’ve already bought a home a least once, you’re likely to be familiar with most of them. If this is your first property sale, however, there may be a few items that are new to you.
Stamp duty – stamp duty land tax, or SDLT, is among the more significant costs you will face when you buy a home – unless the price of that property is £125,000 or less. There are a variety of price bands with each one commanding a different percentage tax payment to the Government.
As we already stated, properties costing £125,00 or less are exempt from SDLT. Thereafter the structure is as follows:
Between £125,001 - £250,000 you must pay a 2% tax.
The proportion of the property you buy that falls between the £250,001 and £925,000 bracket will be charged at a 5% tax rate.
If the value of the property you buy is between £925,001 and £1.5 million you will pay a 10% SDLT rate on that proportion.
For properties worth more than £1.5 million, the tax rate is 12% for the proportion which is above that price level.
Legal fees – you will need to instruct a solicitor or conveyancer to conduct both the sale and purchases you are making. You will likely pay a set fee for each, with the purchase attracting the higher charge due to the additional work involved with regards to legal searches, and responding to surveys. According to a Which? Survey, conveyancing purchase costs range from £400 to £850 depending on the price and size of the property you’re buying. The fees for selling a property can be a little lower, but not by much.
Survey costs – the cost of a survey will depend on which type of survey you choose for the property you’re buying. A homebuyer’s report is a basic survey and will cost anywhere from around £350 up to £950. A buildings survey is more in-depth and will cost more, from around £500 to £1500. If you are buying an older property or one that is likely to need certain works done to it then you can opt for a more in-depth, full structural survey, which will again, be more expensive.
Mortgage related fees – your mortgage fees are where you might find some unexpected costs, depending on exactly what you plan to do. If you’re just going to clear your existing mortgage and get a brand-new mortgage, then it should be straightforward with no redemption fees and a single new arrangement fee for the new mortgage. There are other things you can do such as extend your existing mortgage – for details on fees of this you’ll need to speak with your provider. Or, if you’re ending a fixed rate mortgage deal early, you could face redemption charges so take a look at what costs you may incur before making tour final decision.
Estate agency fees – when you sell a property through an estate agency you will incur costs for the service they provide. The growth of online estate agencies has brought those costs down a little on average, but you could still end up paying up to 5% of the final agreed sale price of your property. Depending on how much you sell your property for, this is another significant cost you’ll need to budget carefully for.
Removals costs – if you’re an existing home-owner, chances are you have a house full of furniture, electricals and white goods that need moving too! You can do this yourself by hiring a van and asking some friends to help. Or, if you have a lot of things, you might be better off employing a removals firm. Costs for removals companies vary widely on the area you live, where you’re moving to and how much furniture and other goods you are moving. The average price, according to a Lloyds Banking Group survey is £1,111.
Local area and Land Registry search charges – these will be payable to your conveyancer but they aren’t included in the agreed fee. They are an essential part of a property purchase as they show you if there are any unexpected plans for the area you’re moving too or any other local problems you may be unaware of. The Land Registry searches show the boundaries of the property you’re buying so you know exactly what you will own on completion of the sale. There is also a Land Registry registration fee when the deeds of the property you’re buying are transferred into your name.
EPC – an Energy Performance Certificate isn’t the most expensive property-related item on your list but it is another thing that you will need to pay for. The EPC is generally arranged by the estate agency but you pay the company directly a charge of around £70.
When it comes to selling your property, you won’t be paying for the survey that is conducted on it. However, if anything is uncovered in the survey or the searches the buyer instructs, there is the potential for unexpected costs to arise.
If the survey uncovers something the buyers aren’t happy about and a legal paper needs drawing up or an indemnity needs to be purchased, then there’s a big possibility you, as the current owner, will be expected to foot the bill.
If you’re not happy about it, instruct your solicitor or conveyancer to negotiate a share of the costs with the buyer. But, if they refuse you need to consider carefully whether £2-300 is worth the loss of a sale. It can be galling to pay for these items that weren’t required when you bought your home. However, if it’s the difference between securing a sale or not then you might just need to make that payment and move on. Don’t let emotions ruin the sale of your current property or jeopardise the purchase of your new home.
While you will likely have enough furniture and home comforts to fill most of your new home, don’t forget to keep some of your budget aside to add a few finishing touches to your new home and make it your own.
It could be a new picture, some curtains, carpets or lamp shades or something bigger like a complete redecoration or knocking down a wall. Whatever it is you want to do to make your new house feel like it’s yours, set aside the money you’ll need so you can do it. You won’t regret it and it will help erase the stress of the past few weeks of selling one property, buying a new one and physically moving in!
If you’re planning to buy a home, one of the most difficult parts of the process is saving up for a deposit. Most mortgage lenders will ask for anywhere from 20 per cent or more of the property’s value as a deposit, which means a lot of saving for most people – unless you can get yourself a 100 per cent mortgage.
UK landlords have seen the maintenance and running costs of their investment rental properties rise in recent years. Now, it appears they plan on making changes to reduce those costs. In addition, some 20% of landlords also intend to raise their rents to help make their properties that make up the UK’s still growing Private Rental Sector, more profitable.
The month of January is closely associated with post-Christmas sales, as shops attempt to rid themselves of their stock from the previous year and make way for fresh trends and items for the new year. However, it appears that in 2019, some mortgage lenders are joining the January sale mindset and shaving a little from some of their mortgage products.
Applying for a mortgage can be a stressful time in your life, even though it’s very exciting – especially if you are buying your first property! So make the process go smoothly by following these tips.