There's no place like home...

Written by Eleanor McIntosh.

For sale signs 007Unlike Dorothy and Kansas, home has been many flats and apartments over the years, as the thought of buying a house, being tied down, and owing such a large amount of money to the bank was enough to send my inner “Scrooge” running to the metaphorical hills.

However, recently this has changed as my partner and I have gained permanent residency in the UK, and with this we have both felt an overwhelming desire to have four walls to paint, decorate, and call our own as well as being faced with the economic reality of paying someone else’s mortgage for the last 10 years but owning no capital to show for it. I’m sure there’s material here for a Tui billboard...

Knowing little about purchasing houses in the UK, my partner and I decided to tentatively dip our toes in the property waters and start viewing a few houses, whilst grappling with the concept of stamp duty, whereby you are required to pay a certain amount of tax on the property purchase (% dependent on the property price and normally around 2%). Over 100 properties later and during the next year and a half we quickly became able to sort the “wheat from the chaff” aided by the below:

We also managed to avoid a few near misses as these sites contain valuable information on neighbourhoods, house prices, and planning permissions for properties in the relevant council area (in our case Bromley).

house1During this time, we were forced to deal with the “resident evil” of property purchasing AKA the real estate agent, and when it came time to make an offer (or two!) we were subjected to aggressive tactics to drive up the property price, including my personal favourite doublespeak – “there’s been floods of interest” which translates to you, and perhaps one other, being interested. Bottom line...

don’t bow to pressure from the agent and do your research, as their primary concern is the sale and their resulting commission.

When making an offer on a house, many agents are very interested to see an AIP or “Agreement in Principle” from your mortgage provider. These are not really worth the paper they are written on as only a “soft” credit check is performed based on your current situation and earnings, but tend to open a few doors (pardon the pun) with agents, give guidance to your borrowing potential, and can save you time when you come to officially apply for a mortgage. Whilst it may seem common sense, go back and inspect the property several times before making an offer and be sure to turn on all the taps, lights, and check the heating and hot water as it is amazing what DIY additions (ahem...disasters) which may be lurking in the recesses, walls or bathroom cupboard in our case.

In addition, once your offer is accepted, the agent will want to agree a timeline for exchange of contracts and completion of sale. Please note that these are guidelines only so again don’t feel unduly influenced by the agent should these need to move by a day or two further down the line.

It is also best to source a solicitor early on in the process or immediately after your offer being accepted, as the agent will apply a large degree of cyber and telephonic pressure until you have done so. Your solicitor will run a variety of searches and reports for you, as well as transacting all the legal paperwork with regards to the house purchase. Be aware that there may often be conflicting reports (at one point it seemed to be unclear if we were in a Radon affected area or not – go figure) and that some of the laws are as decrepit as Henry VIII who decreed that you, the commoner, may be called upon to replace your local churches’ chancel unless you have insurance or there is no claim in your area (irony of ironies the cost to check is the same as the insurance).

We spoke to many friends and colleagues who had purchased houses previously and made sure to select a solicitor who was regarded as professional, efficient and most importantly responded to emails, as a mediocre solicitor can add weeks or even months to the process unnecessarily. The costs for a solicitor are usually pretty steep but expect to budget approx. £1400 all up and for the process to take on average 2-3 months.

Whilst you are navigating this minefield, you will also need to officially apply for your mortgage and decide on your deposit, at which point you will be able to capitalise on the lowest interest rate for the period that the mortgage offer is valid (deposits of 15%+ secure the best rates). Do shop around and find the best deal as independent providers do not always necessarily have access to the big banks’ rates, and vice versa for building societies which can have some surprisingly good offers.

NZ house PricesAs part of the mortgage process, your provider will seek to conduct a valuation survey which can be paid for separately or rolled into your mortgage and is not to be confused with the separate building survey which you are at liberty (and your own cost) to conduct. The latter are highly valuable as they can highlight costly building faults or issues such as subsidence (common to the UK), and may be the deciding factor as to whether or not you end up purchasing the property. There are three main types of survey – basic (suitable for new properties), mid-range or Home Buyers Survey (suitable for non-period properties), or intensive (suitable for cottages, older period conversions) and the cost for each increases incrementally depending on the level chosen. As a guide, a mid-range or Home Buyers Survey costs £500-£800 and in our case we were able to combine this with the valuation survey which brought the cost down.

The surveys generally return a value of 1-3, 3 being the most critical and requiring immediate attention down to a 1 where a brick might need replacing at some point in the future. Surveyors are paid to be picky so expect to see a lot of 1’s and a few 2’s as there are always a “surprise” or two awaiting you. This information can then be used to negotiate with the buyer and either arrange for a reduction in property value or for them to undertake further works. Try to hold off performing any searches or paid for wo rk until this point, in order to give you room for manoeuvre should the buyer not want to do this or you should want to exit the buying process for any reason. You may also need to get further quotes for any future work which the survey has highlighted, and would highly recommend doing so as this can be costly and needs to be taken into account.

Unlike NZ, a buyer or seller may pull out of the sale at any point up until the contract is signed so it is important to be aware that you and they do have options, however, it is unlikely that the seller will pull out especially if they are in a “chain” i.e. are committed to purchase a property whose sellers are then committed to purchase a property and so on, unless the chain falls through or they change their mind. It seems that a lot of sellers in the UK do become overly emotional when selling their property, so do expect a certain amount of backlash and empty threats when raising issues or concerns, and again it is important to remain focussed on the sale throughout.

Surprisingly, it is very easy in principle to buy a house as when you “exchange” contracts you will find it is only a few pages long, along with the various inventory reports, deeds of sale, and condition of property at sale, and not the weighty tome you expect. Common sense I know, but again try to read the documents in full and highlight any concerns to your solicitor as this is your last chance to play the “get out of jail card”. If possible, try to negotiate a clause into the contract as regards cleaning of the property, and care taken on moving out, as it is common for the seller to simply up and move without doing this or cause further damage to the property upon doing so.

At this time your solicitor will also ask you and the mortgage provider to transfer the cost of the property to transact the sale for you, with stamp duty to be paid straight after to HMRC. They will also arrange a time to collect the key, normally on or around 12.00pm on the day that you arrange to officially “complete” the sale which can be at any point after you exchange. However, it is best to allow a couple of weeks or at least a few days leeway in case you need to have the contract or additional documents revised.

Whilst a small part of me wishes I had become a property magnate sooner, I do think you have to make sure you have the cash reserves to not only complete the purchase, but for the costs that follow on from this which tend to be forgotten in the excitement of buying a house i.e. insurance, furniture, renovations. The process is also a daunting and frustrating one that requires a large degree of resolve and is not to be undertaken lightly, but it is an indescribable feeling when you finally have the keys to your very own “micro castle” in hand.

If you work in property and can assist other women in our Network to purchase property we’d love to hear from you. info@nzwomen.co.uk