Given the Stamp Duty holiday and the changes in the Help to Buy Scheme starting next year. First time buyers are trying to get on the ladder quickly.
In the Autumn 2018 budget, the then Chancellor, Philip Hammond, announced caps on the value of properties. These caps reduce the amount that an individual can borrow as an equity loan in accordance with the property value. So buyers that can afford larger properties but do not have the deposit amounts.
|Region||Property Value Price Cap|
|East of England||£407,400|
|Yorkshire and Humber||£228,100|
So there is a small window in which you can buy a higher value property while getting the stamp duty relief. However, it is important to realise that you need to pay these loans back after 5 years and therefore should ensure you can make the payments.
With the Help to Buy scheme, young people have found more affordable mortgages and have been able to get on the ladder.
Buying a new build is more complex than buying an older property as there is much more potential for problems. It is imperative to find a solicitor or conveyancer that has experience dealing with new build properties. Like us. They have to understand regulations surrounding developments, maintenance of developments and plans including sewers and roads.
Developers’ solicitor and sales team usually exert huge pressure to exchange contracts and an independent solicitor can help to ensure your interests are maintained.
The process starts once the offer is made and accepted by the developer. At this point you need to instruct Farani Taylor Solicitors.
You may need to pay a reservation fee for the plot, which is usually deducted from the purchase price on completion.
We advise that you get a mortgage in principle agreed prior to making reservation.
You need to pay the deposit, with Help to Buy it is usually 5% with the Help to Buy covering a further 20% of the deposit.
What we look for?
At this point there is the risk of losing the deposit if the housebuilders valuation is higher than the value of the completed house. Therefore the mortgage company may withdraw the offer and if unable to get another mortgage then the deposit could be lost.
We discuss the contract and work for you not the developer, explaining the risks. Establishing whether the price is finalised at point of exchange is the original valuation or if not fixed which may help to reduce the risk of losing deposits.
You need to be aware of what it means to buy a leasehold or freehold property. If leasehold then need to understand how common areas are managed and other related costs. With a new build you would expect a long lease term.
It is vital that solicitors deal with the searches properly. As experts, we check that the appropriate planning permission has been sort and the construction is built in accordance. Further that roads are built and utilities are established. Conducting of local searches ensures that your investment is protected.
Our team highlight any associated charges and any covenants written into the lease. If you are prohibited in making changes to the property such as an extension then you need to know immediately.
If you are buying off plan then you may not see the property. It is important that a snagging provision is put into the contract. This helps should the building quality fall short of the expectation. A snagging survey is conducted prior to exchange of funds to ensure that the developer is responsible for fixing any issues.
Once everything is completed then the final step is to get the keys, manuals, log books and guarantee. Then move into your new home safe in the knowledge that you have protected yourself and your investment.