Optimism for 2013 housing market – so prepare now
Commenting recently on house prices, Nationwide's chief economist Robert Gardner has said "the predominant theme remains one of stability”.PAccording to the latest monthly report from Rightmove, UK residential property prices are up by 2% year on year, the highest annual rate of increase seen in the month of November since 2007.
Miles Shipside, director and housing market analyst at Rightmove has reportedly said that “this stability may indicate a sounder springboard for 2013 as the wait goes on for a sustainable recovery in transaction numbers”.
Combine this with the recent report by Reuters that mortgage approvals hit their highest level since January last month and the picture looks positive. Onlender has started to offer home owners the lowest ever two-year fixed rate mortgage deal at 1.99 per cent, kick-starting the first home loan price war since the credit crisis began in 2008.
Graham Beale, Nationwide's chief executive, has also reportedly hailed the Society’s highest six month mortgage lending period for four years.
But for those thinking of moving, now is the time to prepare, and to do it right. Do not overlook the following costs of house buying:
1. Stamp Duty Land Tax (SDLT)
This can be the biggest, and often overlooked, budgetary expense when moving. After all, you get nothing for your money, just the privilege of buying an expensive home. You can avoid SDLT if you purchase a property under £125,000. You will pay SDLT of 1% of the purchase price between £125,001 and £250,000; 3% between £250,001 and £500,000, 4% between £500,001 and £1m; 5% between £1 million and £2 million; and over £2 million a huge 7%.
2. A mortgage lender’s charges
Often referred to as arrangement, booking, completion or administration fees, you might be forgiven for thinking that mortgage lenders would want your business, but in fact you pay them to lend to you. These charges can run into £1000s – and most will also charge you to value your property – so do not automatically think a cheap mortgage rate is best. Look at the arrangement fees. In this regard, always consult a specialist IFA mortgage adviser – as their advice could save you further £1000s.
3. A building survey
You would want to have a mechanic inspect a car you buy, so for a house, a survey must always be considered. Your conveyancers will almost always advise one is carried out. And your conveyancer can explain the types and likely costs. Do NOT assume that the estate agent selling the property offers the best type or cost, nor indeed your mortgage broker.
Often the qualification and quality of the person handling the legal work involved in your house move is blurred by their description as ‘conveyancer’. It is not enough to employ a conveyancer. Ask who that person is. Obtaining a conveyancing quote even from a firm of conveyancing solicitors does not mean you will actually receive a solicitor, or other qualified lawyer (e.g. chartered legal executive). That prospect can be very worrying, as the change of ownership in a property is a highly complicated and risky legal transaction, where even in 2012, older houses continue to have had mistakes carried out by previous conveyancers. So choose wisely – consider such things as CQS and Lexcel accreditation. And make sure the ‘conveyancer’ is legally qualified (e.g is an actual solicitor, chartered legal executive). When comparing conveyancing quotes have in mind common place hidden charges to help you weed out those conveyancing quotes not worth even considering.
5. Buildings insurance
Your conveyancing solicitor will explain that usually you must take this out at the point of exchange of contracts. However, recent 2012 flooding has demonstrated the need to obtain an insurance quotation at the earliest starting point, perhaps when first viewing a property you are interested. Flood cover may boost the premium due to the geographical area in which it is located.
Moving your belongings may well require a removals company. Never underestimate how many possession you own or how exhausting your own DIY packing and lifting will be. Obtain several quotes and check whether they carry loss/breakage insurance, and seek a recommendation and check whether they are members of either The British Association of Removers or The National Guild of Removers and Storers.