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UK Property Purchase Strategies (I) Process and Precautions


This is a practical guide introducing to you the process and considerations for buying a property in the UK. Basically, the process of buying property in the UK can be divided into three stages.

1. Determine the listing
At this stage, buyers need to look into the target area of the house they want to buy.

  1. Surrounding amenities: is there a supermarket? A hospital? The park? A bus stop? The business district?
  2. Neighbours: is it a white area? Is it an affluent area? How many punks are there on the road? What class of car are the surrounding households in?
  3. Peripheral environment: is the crime rate high or low? Is there enough parking space? How does the school's reputation rank? Is the overall street condition good?
  4. House construction: is the interior layout of the house, and are the water, electric, and gas lines working to your liking? High or low energy consumption level of the house

Generally speaking, if you're looking to buy to let, then it's best to choose a one-bedroom home that is safe, easy to commute to, and close to the business district. Two-bedroom apartments are better, and if you are renting it out to students, then, of course, it's better to be close to the school. If you are planning to live by yourself, the security of the surrounding area should be good, preferably in an affluent area, and whether there are good schools around is also to focus on.

Note: There are two types of land titles for residential properties in the UK: "Freehold" and "Leasehold.". Freehold is the ownership of the land within the boundaries of the house in perpetuity, which the owner is free to use in accordance with the law. Most detached, semi-detached, duplex, flat, etc. houses in the UK are freehold. Leasehold means that the landlord owns the property but not the land. Usually, the developer owns the land and the homeowner pays a small annual rent to the developer. Apartments generally fall under this type of ownership.

2. Price negotiations

Once the property is identified, it's time to negotiate a price with the seller. Generally, this process is done through an estate agent (also known as a broker). Currently, the housing market in the UK is a seller's market. The seller will refer to the buyer's price based on his or her offer and choose the one with the best price out of all the bidding buyers. The buyer first tells the estate agent their offer, and the estate agent then passes it on to the seller. If the price is accepted, the realtor will inform the buyer in writing that the price has been accepted and will need to provide the lawyer's contact information. If the realtor informs the buyer that the price is not accepted, the buyer can continue to make offers until the home is sold.

Note: The buyer can contact a surveyor (surveyor) individually to have the property valued. This step can be done either before the buyer makes an offer or after the seller has accepted the buyer's price. As this cost (hundreds or thousands of pounds) is borne by the buyer. The risk of doing it before making an offer is that if the seller doesn't accept the buyer's price, the cost of the property appraisal will be wasted.

3. Delivery of the house

At this stage, the buyer needs to hire a Solicitor to handle the paperwork and follow up with the realtor throughout the process. etc. The lawyer will ask for proof of funds from the buyer. If the buyer needs a mortgage loan, the attorney will also help you contact the lender. After completing all the above documents, the lawyer will negotiate a contract exchange date on your behalf with the seller. When exchanging contracts, you are required to pay the seller a deposit of about 10% of the price of the property and set a date for the completion of the contract. The final stage of the delivery of the property is the completion of the contract. The buyer transfers the balance of the purchase price and the lawyer's fee to the lawyer within the time specified in the contract, who in turn transfers the money to the seller. After the contract completion, the lawyer will change the registration at the land office and send the relevant documents to the buyer. At this point, the whole process of buying a property is complete.

Note: In England, a property transaction only becomes legally binding when the contract is exchanged. This means that no matter how much the buyer has put in upfront, as long as there is no exchange of contracts, the seller has the right not to sell or resell to someone else. So my advice is to work with a lawyer to complete the exchange of contracts as soon as possible.


So what are the additional costs of buying a home in the UK, apart from the purchase price?

1. Stamp Duty Land Tax (SDLT)

The stamp duty here in the UK must be handed over to the government, and this property transaction is only legal if you pay the stamp duty. The rate of stamp duty is different for the first and second properties, and the rate of stamp duty for the second property will be higher than the first.
There is currently no stamp duty on properties under 40,000 pounds in the UK (can anyone tell me where I can find a 40,000 pounds house)

  • For properties between 40,000 and 125,000, there is no stamp duty on the first property and 3% on the second one.
  • Properties between 125,000 and 250,000 are subject to a 2% stamp duty rate for the first property and 5% for the second property.
  • For properties of 250,000-92.5 million, the stamp duty rate for the first set is 5%, and the stamp duty rate for the second set is 8%
  • For properties of 925,000-1.5 million, the stamp duty rate for the first set is 10%, and the stamp duty rate for the second set is 13%
  • For properties above 1.5 million, the stamp duty rate for the first set is 12%, and the stamp duty rate for the second set is 15%

2. Solicitor fee

Attorneys are an integral part of the real estate closing process and their work will begin with the seller's acceptance of the buyer's offer, so The cost of a solicitor's fee is also a must. Generally, legal fees range from ?00-?,000, but this is in addition to the cost of additional investigative services and processing fees.

3. Surveyor and Valuation Fees

They are not the same, but both are optional expenses.
The main purpose of a Surveyor is to check for structural or potential problems with the home. If you are buying a new build property, you don't need to pay for this. New build properties in the UK are subject to a very strict quality control process to ensure that there are no problems with the building. And new build contractors will offer a minimum of a 10-year guarantee, so you don't need a structural assessment. If you are buying a second hand property, there are three different types of reports that a survey agency can provide you with depending on your requirements. There is a Condition Report, Homebuyer report, and the most detailed Building Assessment Survey. These reports can cost between? 400 to 2,000 pounds.

Valuation is the process of assessing the market price of a property. Buyers will usually need to have a valuation to see if the property is worth investing in. If you're taking out a mortgage, your lender will usually provide you with a free valuation report. However, if you are a cash buyer, you will need a separate valuation, which can cost between 150 and 200 Euros. Between 500 and 1500 pounds. Tony is here to teach you a trick. You can do a homebuyer report which is the second level of the property valuation. This report will not only give you a survey of the structure of the house, but it will also provide you with a valuation of the property. You don't have to pay for a valuation at all.

4. Buying agent fee
This is an optional purchase, mainly because some buyers are not familiar with the UK market and do not speak the language well enough to hire a buyer's agent. Buying Agent to help buyers choose a home, negotiate a price, contact a lawyer, etc. (However, if you are rich and don't have the time, you can also choose this service because it saves your time.) The usual fee is 0.5%-3% of the house price.

5. Mortgage commission
Generally, it's the buyer who takes out a loan to buy a home that incurs mortgage loan fees when applying for a mortgage, including the booking fee which is usually between 99 and 250 pounds and the commission is usually between 0-2,000 pounds.. The service charge can be added to the loan amount and repaid monthly.

6. Building insurance and content insurance
If you are buying a new build property, you probably won't need building insurance as most new homes come with NHBC for ten years! Building insurance. If you're buying a second-hand property and you've applied for a mortgage then you'll have to take out building insurance. This is because the lender will require the buyer to show building insurance before approving the loan. The cost of building insurance is usually based on the size of the property, the number of rooms, the age of the building, the condition of the occupancy and the cost of rebuilding. The insurance covers the building of the property itself, not the contents of the house. Building insurance is generally between 100-200 pounds per year for a two-bedroom apartment and between 100-200 pounds per year for a four-bedroom house. Between 200 and 400 pounds. Content insurance covers furniture and personal items in the property and the cost varies depending on the value of the items you are insuring.


In addition, there are a number of costs that will need to be incurred once you have taken possession of your home.

1. Home improvement costs
For those who buy a home for their own use, most people will do some refurbishment to their newly acquired property, such as painting the walls, re-wallpapering, replacing carpets, curtains, etc. In addition, most people will also do the renovation work as indicated in the survey, such as renovating the kitchen, replacing the boiler, and so on. The average cost of renovating a new home in the UK is £5,750.

2. Property maintenance fee

Whether you are buying a property for your own use or renting it out, maintenance costs are inevitable. This is even more important for rented properties, as UK law places the onus on the landlord to ensure that the equipment they provide is working properly! to ensure the safety of the tenant. Generally speaking, properties require some inspection and maintenance every 3-5 years. Every 10 to 15 years some of the major equipment in the property will need to be replaced. For example, boilers generally need to be replaced after 15 years (because insurance companies only insure boilers up to 15 years old). Boiler replacements typically cost between 2,000 and 5,000 pounds. Also kitchens, bathrooms etc. will need refurbishment in the same time period. It may also cost more than a boiler. Doors, windows, roofs, etc. will need repairing every 15-25 years.

Generally speaking for rental properties, around 1/6 of the total annual rental income is spent on maintenance, repairs, refurbishment and special projects such as gas safety certificates. If you use a rental agent to find tenants, collect the rent and manage the property, you will spend between 15% and 20% of your rental income on maintenance, repairs, refurbishment and gas safety certificates.

Of course, there are also Council Tax and Bills. For those of you who are in the UK, you will be familiar with these two.

Finally, you will discover that it turns out that buying a home in the UK isn't all that cheap, either. In addition to the price of the home, there are various expenses to support it. Hopefully, this article will help you to budget well in advance before buying a house so that you don't end up stretched to the limit!


This article is contributed by Juwai Columnist, Li Dong Wei.

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