Buying property in the UK

The UK has much to offer with a multi-cultural society, a history that goes back thousands of years and some of the most beautiful countryside and tourist destinations you could ever hope to visit.  The Island has been involved in many conflicts, with the Romans and Vikings leaving their foot prints on UK society.

One of the top five economies of the world, the general trend for the UK economy has been on an upward curve for many decades.  While historically the housing market has been very volatile, it has remained buoyant for some time and many residents see their house as a long-term investment.  The culture of home ownership has also ensured that demand always seems to outstrip supply in the UK, a situation which has seen house prices rise substantially over the last few years, with some house prices increasing by over 30% over the last two years.

The country has a net immigration policy which as well as ensuring that the UK population and economy continue to prosper, should also bring in a more potential home buyers – thereby keeping demand fairly high.  Cities such a London continue to attract the big movers and shakers, although areas such as the North of England, and Scotland attract masses of tourists who have perhaps not been able to experience such a long engrained history in their home country. A couple of expats recommended places to live in, the first being made at the Britain Expat Forum last September 18, 2009:

Try Blackheath, just a few miles outside the city (about 15mins communting time) has a nice ‘village feel’ and some good open space. Also has good private schools.

And the second post was made at the Britain Expat Forum last September 20, 2009:

Hi, you don’t say what you do, but if you can work anywhere, why not have a few months more in Scotland and then test out England, Ireland and Wales? Depending on the weather, you might find employment prospects in Aviemore. There’s always Aberdeen or Inverness. Glasgow’s a great city.

Newcastle is a vibrant, happening city; the Lake District is well worth exploring … York, Cambridge, Oxford, Bath, …. Cardiff, Swansea …

Contents: Property Market Performance in the UK | Property Costs in the UK

UK Property Market Performance

For many years now, base rates have been the very blunt weapon with which the government and independent Bank of England have attempted to subdue the property market in times of excess demand.  While this always has the desired effect, it can take time to filter through to an often stubborn house buying market where many buyers can become over extended.

Recent figures show that house prices rose by 0.9% in April 2007 alone (6.8% year on year), and many market experts are forecasting a rise of over 20% during the next five years.  However, this long term view does however seem to tie in with what the economy is currently telling us.  People are currently more heavily in debt than ever before, interest rates are rising, mortgages are been granted on crazy multiples and the market has a fair amount of short term speculators who will disappear as soon as prices start to fall back. The current financial downturn has been weathered as foreign investment has started to trickle back into the UK property market.

While very fluid and very transparent, the UK property market has long since suffered from buyers pulling out of transactions, often disrupting a chain of buyers and sellers.  The imminent introduction of Home Information Packs should see many of these would be speculative buyers disappear, which is estimated to cost the market up to £1 million a day.

The UK property market is one of the largest in Europe although there is most defiantly a split between the North and South of the country – where living costs also vary wildly.  As more people look to work from home, or online on the move, the necessity to live in the main areas of the economy – such as London – are reducing.  This is slowly helping to reduce the difference in price variations, but will take some time to have a real impact.

A booming economy, a major place on the world political stage and a housing market that covers all periods and designs you could wish for, the UK is attracting more and more foreign nationals becoming Expats living in the UK.

Property Costs in the UK

Please be aware that currently the UK has a non-binding bid system, where as Scotland has a different system where bids are all binding. Haggling over the price is also the norm, as you may be able to pull down the overall price of the purchase you would be making.

When purchasing a house in the UK, you can expect to pay for:

Survey fees – your mortgage lender will insist on a survey of the property. This could
be a small house buyer’s survey of around £300 up to a full-structural survey of over £1000

Valuation fee – around £150

Mortgage arrangement fee – varies by lender

Deposit for property – minimum 5%-10% of property price. Some lenders will also charge a Mortgage Indemnity fee if your deposit is small

Insurance - it is advisable to insure the poprty once exchange has taken place

Solictor’s fees - these vary but a likely cost is around £600 (including VAT) just for a purchase

Electronic transfer fees – vary by solicitor but not expensive

Local searches – vary by Local Authority but up to £200

Land registry fees - dependent upon type of property but a useful guide is at http://www.landregistry.gov.uk/online/feecalc/

Stamp Duty - a % of purchase price

Residential property – purchase price – Rate of Stamp Duty Land Tax
up to £125,000 - 0%
£125,001 – £250,000 - 1%
£250,001 – £500,000 - 3%
£500,001 or more - 4%

This process will change when the new Home Information Packs are introduced, although how this will affect overall costs is not clear as yet.

Also do take into consideration the age and condition of the house especially those built during the Victorian, Edwardian and Georgian times as these cost higher and are a little more complicated in terms of purchase process.

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