Legal costs to be expected for your property purchase in London
Buying a property is often considered as one of the most stressful things for people, even before getting a baby! So when it comes to buy in a foreign country on one of the busiest and intricate housing market of the world, buying a property can seem complicated at best, terrifying at worst. Stack the odds in your favour and get ready by listing in advance all the legal costs or fees and taxes related to your property purchase in London.
Legal costs
Stamp duty
The largest among the legal costs is the ‘purchase tax’ you will have to pay the UK government when you buy a property. Recent changes in Stamp Duty calculation made it more affordable for budget below £925.000, but more expensive for top market budget.
If you already own a house in the UK or abroad, or if you the property you buy won’t be your main residence, you will be charged an additional 3% of the value of the property on the top of the rates shown below.
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Real cases studies :
FLAT Share of Freehold-Purchasing price: £550,000 – First Time Buyers. No Stamp Duty for the portion <£425,000 and 5% STD on the portion between 550,000 and 425,001 (because purchase price <625,000) : STD = £6,249.95 (1,14%)
Terraced HOUSE Freehold – Purchasing price: £1,725,000 – STD: £118,250 (6,86%)
FLAT Leasehold-Purchasing price: £6,250,000 – STD: £661,250 (10,58%)
Land registration fee
The Land Registry is a government department that keeps records of all registered properties in England and Wales. It charges a fee for registering property with a new owner. The fee will vary depending on the property price but you can expect to pay between £200 and £500.
Conveyancing/Solicitor costs
You will need to hire a solicitor to deal with the legal aspects of buying a property. Once instructed, the solicitor will undertake all necessary property searches to confirm the value of the house and will liaise with the seller’s solicitor to progress through each of the buying process, from offer to completion. As such, it is key to rely on an involved conveyancer offering a thorough and trustworthy service for a good price. From his reactivity depends the delay, and sometimes the success or fail of the purchase. Conveyancers will either charge you a flat fee or a percentage of the value of the property. You can expect to pay between £1,800 and £4,000 depending on how complex the transaction is.
If you wish so, Welcome Home London will recommend his selected partners.
Survey costs
When buying a house or flat, it’s important that you get a house survey done once your offer has been accepted. There are three main types of survey:
Condition Report: It is a basic survey, which gives an overview of the property’s condition and highlights significant issues, but won’t go into detail. Suitable for new properties. Costs around £500.
HomeBuyer’s Report: highlights problems with the property, such as damp or subsidence, includes advice on necessary repairs, point out anything that doesn’t meet current building regulations. Beware: they won’t look behind furniture or under floor boards, so will only identify ‘surface-level’ problems. For a +£500,000 property, around £1,200 for 4 hours investigation.
Building Survey: provides comprehensive breakdown of the structure and condition of the property, will list defects and advise on repairs and maintenance, can include projected costs for any repair work. Particularly useful for an older or poor conditions property. For a +500,000 property, around £1,600 for a full day inspection.
A mortgage valuation is not the same as a full survey. Don’t get confused between the lender’s mortgage valuation survey and a survey that is done for you. You will have to pay for a valuation report in order to secure a mortgage offer but this is entirely for the lender’s benefit. The mortgage valuation merely confirms to the lender that the property is worth at least what it is lending you – it is not its responsibility to point out any repairs that need doing. You can expect to pay around £300 for the mortgage valuation.
Mortgage broker costs
Unless you are yourself a qualified banker, using a Mortgage Broker is the safest way to get best possible deals and interest rates. The average fixed-fee would be around £500 up to £1,500. Some brokers also take a commission from the bank or a percentage of the mortgage amount.
When in recent years first buyers typically used a 20% deposit to buy a house in UK, you should get the most competitive mortgage deals on the market with a deposit of 25% upwards. The recent changes in rates make it more important than ever to use a broker support.
Welcome Home London can introduce you to his qualified expert partners.
To get the best possible offer for your mortgage, check or create your credit history in UK, for example by using a credit card for regular expenses such as gym, groceries… An existing credit history will allow your broker to negotiate better conditions.
Rely on qualifed experts
If you want to invest in UK, you should also consider to do some paperwork to protect you and your family. Rely on our team of qualified experts for expatriate people.
Local will
If you buy a property in UK, be aware that UK laws will apply for your future legacy. You might have to work on a simple joint will to secure the best interest of your family.
Welcome Home London can introduce you to his qualified expert partners.
General insurance
Welcome Home London can refer you to its premium insurance partner once you have found a property. They exclusively deal with a selection of quality brokers and are not consumer facing. They have a panel of about 20 of the leading providers in the UK and are able to provide extremely competitive quotes for best cover at the best price.
Currency exchange
We can suggest you our best contacts for transferring money for much better value than the banks.
Mortgage surveys/Architect/Building work
Welcome Home London can introduce you to a few reliable partners to lead and complete your project from A to Z.