Home Ownership

Home Ownership

Are you looking to purchase a home?

This section provides information on:

  • Affordability and running costs
  • Finding a property
  • Making an offer

 

Can you afford to purchase a property?

To buy a property, you must have a regular income, some savings and limited debt. This will then be used to determine how much money you can borrow to buy a home. To estimate the amount that you can afford to borrow try out the Affordability Calculator. 
 

You may also be eligible for our Help2Own Plus scheme. Please click here for more details
 

Mortgages
A mortgage is the money that you borrow to buy a home. A mortgage is a loan that lasts for a fixed period called a 'term'.
When you take out a mortgage you will also be charged interest on the amount you borrow. If you do not keep up the agreed repayments, the lender can take possession of the property. 


Additional costs

There are a number of additional costs you will also need to budget for when purchasing a home:

  • Survey fees
  • Valuation fees
  • Stamp duty land tax (visit GOV.UK for details)
  • Land registry fee
  • Fees charged by mortgage lender or broker
  • Solicitors fees
  • VAT
  • Removal expenses

NB: If you start the process of purchasing a property and the sale falls through, you will still be required to pay for any legal work, valuations or surveys which have taken place.

 

Can you afford the running costs of a property?

When you buy your own home you are responsible for any running costs. These include:

  • Council Tax
  • Water Rates
  • Ground rent/Service charges
  • Buildings and Contents insurance
  • Gas and Electric

An energy performance certificates can help you to work out the energy efficiency of your property.

Choosing a property

You should always arrange to view a property you are interested in. You can arrange a viewing through the estate agent or the seller's solicitor/agent. Ask as much as possible about the property when visiting it. You may also want to consider:

  • Room for expanding the property in the future
  • Schools
  • Crime rates
  • Transport Links

Is the property leasehold, freehold or commonhold?

Freehold: This means that the land on which the property is built forms part of the sale, so there will be no ground rents or service charges.

Leasehold: This means that the land on which the property is built is not part of the sale and you will have to pay ground rent to the owner of the land - who is called the freeholder. The length of a lease can vary and you should check that the length of the lease on the property is acceptable to your mortgage lender. You may also have to pay an annual service charge on a leasehold property (this usually applies to flats). The service charge covers maintenance and repairs to the buildings, cleaning of common areas and looking after the grounds. For further information on leaseholds visit The Leasehold Advisory Service.

Commonhold: If the property is commonhold, this means that 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 (known as a commonhold association). In commonhold, a ground rent or service charge is not payable. However, a share of the commonhold association's expenditure on maintenance, insurance and administration will be payable for the common parts of the building.

Making an offer

When you decide to buy a particular property, you do not necessarily have to pay the advertised price. If the property is being sold through an estate agent, you should tell the estate agent what you are prepared to pay for the property. The estate agent will then put this offer to the owners.

If the owners do not accept your first offer, you can decide to make an increased offer. There is no limit on the number of times you can make offers on a property. If you make a written offer it will always be made subject to contract. This means that you will not be committed to the purchase before finding out more about the state of the property. If you make an oral offer this is never legally binding.

 

When the offer has been accepted
When your offer for the property has been accepted you will have to consider the following:

  • Is a holding deposit payable?
  • Arranging a mortgage
  • Is a survey necessary?
  • Who will do the necessary legal work

Arranging a survey
The valuation which is done for whoever is lending the money is not a survey. You should consider whether or not to have an independent survey carried out in addition to the valuation. The survey would not only consider the value of the property, but would also examine the structure of the property and should identify any existing or potential problems. There are two levels of survey:

  • Full structural survey - suitable for a property which is large, more than 80 - 90 years old or in doubtful condition
  • Intermediate or ‘house/flat buyers report’ that gives a report on the condition of the parts of the house that are easy to see and to get at and may recommend further tests or investigations, for example, a specialist check for woodworm. This is particularly suitable for properties built this century which appear reasonably sound. It is much cheaper than a full structural survey.

You can use the same surveyor to do both the valuation and the survey (which may be cheaper), or you can use a different surveyor for the survey.
If the surveyor reports that there are some problems with the property, you will have to consider whether you still want to go ahead with the purchase or want to negotiate further about the price. The surveyor will usually advise you as to how the identified problems should be dealt with and the likely costs.

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