If required, it is always best to get a mortgage agreed in principle before you go out and begin looking at properties. This will tell you just how much the mortgage company will lend you and let you know exactly how much you have to spend! We work closely with an independent financial advisor who we can put you in touch with if you need any mortgage advice. Give us a call on 01273 721061 and a member of staff will put you in touch them.
STAMP DUTY
When purchasing a property at the price of £125,001 or above you will have to pay stamp duty. You should always budget for this throughout the process. This must be paid in full and cannot be added to your mortgage. Your solicitor will make the payment on completion.
Purchase price of the property – Percentage of the total price to be paid
Purchase price of the property Rate of Stamp Duty- Percentage of the total price
Up to £125,000 0%
£125,001-£250,000 2%
£250,001-£925,000 5% see below
£925,001-£1.5m 10% see below
Over £1.5m 12% see below
Under the new rules set December 2014, no tax will be paid on the first £125,000 of a property, followed by 2% on the portion up to £250,000, 5% on the portion between £250,000 and £925,000, 10% on the next bit up to £1.5 million and 12% on everything over that.
Example of how the new rates and calculation method applies:
Buyer exchanges contract for the purchase of a house for £275,000 on 5 December 2014. Completion has been fixed for 5 February 2015. Under the new rules SDLT is calculated as follows:
-0% on the first £125,000 = £0
-2% on the next £125,000 = £2,500
-5% on the final £25,000 = £1,250
-Total SDLT payable = £3,750
The old rate would have resulted in a stamp duty payment of £8,250. The saving to the buyer under the new rules amounts to £4,500.
The new rates and method of calculating Stamp Duty Land Tax (SDLT) apply to properties where exchange of contracts happens on or after 4 December 2014.
MAKING AN OFFER
So you’ve seen your dream property and now it’s time to make an offer. When putting your offer to a vendor, the more information we can give them about your position, the better chance you have of having an offer accepted.
We would need full details if you have a related sale or chain and also need to see a copy of your mortgage agreement in principle. It is always helpful for us to be in contact with your financial advisor if you already have one, as they can further confirm your position to proceed.
SALE AGREED – CONVEYANCING BEGINS
It's now time to appoint a solicitor. It is a good idea to get a few quotes before making a decision. We are happy to put you in touch with local solicitors that we have worked with and have previously had successful dealings with. (TIP* don’t always go with the cheapest quote!)
SURVEYS
If you are buying a property with a mortgage, you will be required by the bank to have at least a 'Mortgage Valuation' however buyers often decide to have a more detailed survey. This can usually be upgraded through your mortgage lender to a ‘Homebuyers Report' or can be sought independently as a homebuyers report or full structural survey. There are a number of local surveyors with whom we have had dealings with and would be happy to assist you with a survey on the property/provide you with a quote.
EXCHANGE AND COMPLETION!
Once your solicitor is happy with all the documentation & searches and you have received your mortgage offer, they will look to exchange contracts which is when the sale becomes legally binding. Thereafter you will complete the purchase of your new home (usually a week or two after exchange) and collect the keys!
USEFUL TIPS FOR MOVING
• Inform all relevant parties that your address will be changing – such as utility companies, your employer, your bank & redirect your mail.
• You may need to contact the Council Parking Office so they can post a non parking restriction outside the property to allow space for removal vans.
• You need to have buildings insurance in place as soon as you have exchanged on your purchase.
• When you move home your TV Licence doesn’t automatically move with you. You need to change the address on your licence – you can do this online up to three months before you move.