Guides

Things To Consider Before Buying a House

As one of the most significant purchases of your life, there is much to consider before buying a house, whether as a first-time buyer, an experienced homeowner or property developer who has just secured a bridging loan.

Today, home ownership can be an advantageous option when compared to the rocketing costs of private renting. If you are ready to take that exciting step to end those monthly payments to your landlord and start the house hunt, then its time to consider these important points before hopping onto the housing ladder:

Costs of Moving

The main costs to include when moving are:

• mortgage broker fees
• monthly mortgage repayments (do you go standard, fixed or variable?)
• hiring a moving company
• buying new furniture, TVs and appliances
• home and contents insurance

Financial security should be your number one priority in the case of buying a house. Consider the true costs of buying; how much can you actually afford? Think ahead, how long will it take you to save for your deposit? How much can you afford to repay each month? How long will it take you to pay off the mortgage? And of course, are you getting the best interest rates? If you can afford larger monthly repayments, you could have a shorter mortgage and end up paying less in interest in the long term.

If you are a first-time buyer, you could benefit from the Government’s Help to Buy Scheme and if you are under the age of 39, the newly available Lifetime ISA. The Government will add a 25% bonus on top of savings when used towards a deposit. Deposits, surveys, legal fees, insurance, stamp duty, valuation fees and removal costs are all essential factors that you should consider in the budgeting process as suggested by Money Saving Expert. Of course, having some spare cash in your pocket goes a long way when it comes to those unexpected moving in costs.

 

Choosing a Location

City or country? Commuting or walking? Fresh air or pollution? Is there 4G signal coverage or is it a phone signal black spot? Whether you are uprooting to the big smoke or escaping to a donkey farm on the edge of the Peak District, location is KEY in the search for your perfect home.

Think about what is important to you in the long term. If you work from home, great. For the most of us, your commute is an essential part of daily life, so consider the costs of petrol or train fares on a yearly basis. If the thought of being crammed against fellow commuters on the tube on a hot summer’s day makes you shudder, then you need to reconsider.

Spending a little more for a better location in return for a pleasant walk to work each day, might be the right choice for you. Do you mind being close to a noisy railway station so that you can dash out the front door, and still have time to grab a coffee en route to catch your train? Is the house underneath a busy flight path?

Check out Ofsted reports to get a gauge for the best schools in the area. Check how far away the nearest supermarket is, and does the local pub have your favourite beer on tap? Weighing up the pros and cons, however large or small can be a laborious task but, in the long run, you will thank yourself.

Viewing The Property

This is your chance to assess the nitty-gritty. Always view the property more than once and at different times of the day. Your estate agent is there to be quizzed, so prepare for each viewing by being armed with questions as advised by the Home Owners Alliance.

There’s likely to be some negative factors that the vendor or agent will be keeping from you, so it’s important to draw these out before you purchase. Ask how long the house has been on the market, or why the seller is moving?

Have there been any recent issues with the boiler and how energy efficient is the place? Have a scan of the windows and walls in each room to check for damp or cracks, you don’t want to end up having costly repairs later on. Especially something like asbestos which could make the property absolutely inhabitable - so getting this checked beforehand could save you a lot of time and hassle.

Does your furniture match the decor or will you have to redecorate? Can you actually envisage yourself living there for the foreseeable future? The answers to these questions will save you time and help you to avoid disappointment.

Will it Hold its Value?

As a keen property investor, you need to know whether or not this place will keep its value or be worth significantly more in the future. There are some areas that are certainly up and coming and likely to skyrocket in the next few years, such as Tottenham (following the rejuvenation of the stadium and area) and trendy-Shoreditch with and-waterson-launch-shoreditch-property-scheme/">Long and Waterson's development scheme.

A good developer is able to suss out a good deal on the market or at auction and see the potential return on their property after 1,2,3 or 5 years. Above all, you need to consider whether the work you are putting into any refurbishments or renovation will bring you a good margin. You certainly don't want to spend too much on a loft conversion, garage and bespoke kitchen only for the area to not maintain its value.

Is There Room For Improvement?

There are several smart ways to increase the value of your property and being able to spot that potential is key. For instance, seeing that there might be space for a basement, loft conversion or conservatory can easily increase the value of the home by 10% to 30%. Importantly, is there the opportunity to get planning permission to do these kinds of changes or will there be obstructions from the neighbours and local council?

As a property developer, you need to be able to see potential immediately. Other ways to boost value of a home include sprucing up the garden, adding some kerb appeal like doing up the windows, lighting and entrance.

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by Daniel Tannenbaum

How to be a Good Landlord

Becoming a good landlord requires a lot of commitment and clear communication. With so many landlords obtaining a bad reputation these days, it is important to make sure you are choosing the right tenants and keeping those tenants happy. The following tips will help you to avoid that unjust bad reputation and guide you into becoming an excellent landlord.

 

Keeping your tenants happy

• Investing in your property
• Good communication

We’ve all heard those awful landlord related horror stories where the plumbing is a shambles and the walls are so thick with mould it feels like the house might fall down at any moment. Investing the time, money and energy into your properties will be beneficial to you in the long term.

If you can cover the costs, some good quality DIY will go a long way in keeping your tenants happy. If you have the time and skills to do so yourself, great. If you need to seek professional help it would be advisable to get to know the local plumbers in case of any urgent fixes. For all properties its ideal to keep up regular maintenance no matter how much you are charging per month.

 

 

The better the landlord, the happier the tenant right? Including a bottle of bubbly on move-in day is a plus but think about the overall life-cycle of the tenancy. Who is your target audience? Are you letting out to students, professionals or families? It’s important to keep up a decent relationship with your tenants and to get to know them so that you can tailor the property to their needs. Good communication is key to becoming a good landlord. Dependant on the type of tenant, you might have differing landlord approaches or properties.

A recent BBC programme ‘The Week The Landlords Move In’ documents the lives of landlords who have to spend a week living in one of their own rentals. Under great scrutiny, the show puts these millionaire landlords to the test to see how well they know their tenants, and how much they are really working hard as landlords. Ben for example, makes a fortune by renting out many properties in Egham to students. A great way to make a large profit quickly from poor students who have no choice in the amount of rent they have to pay; but sadly the programme highlights how this landlord has lost touch with this tenants, leaving it up to an agency to sort out anything that goes wrong with the property.

The boom in a number of students privately renting at rocketing prices has lead to landlords taking advantage and not putting their share of the work in. 

This lack of communication can have huge implications on health and safety, which could lead to tenants not paying their rent or seeking legal action. Even if you use a letting agent to deal with your properties, it will be worth your while keeping in regular contact with individuals to avoid nasty relationships developing and costly repairs. Make yourself easily contactable and always give at least 24 hours notice before visiting the property.

 

Understanding your legal requirements

• Health and Safety Requirements
• Screening your tenants
• Insurance

Whether you are new to the landlord or a professional understanding your legal responsibilities are essential to making you a good landlord. Health and safety should be a number one priority, make sure you are following government guidelines for private renting to ensure you are meeting safety regulations for gas, electric and fire hazards. Ensure you have provided an Energy Performance Certificate which should contain information about the property’s energy use and costs. Understand tenancy agreements and check you are abiding by landlord-tenant laws. Its common practice to seek legal advice and ask a solicitor to draw up the tenancy agreement.

Screening your tenants properly before approving a rental agreement is key to your success as a landlord. Run a credit history check and ensure they have provided evidence of income as well as a guarantor reference, such as a previous landlord. Be sure to check that your tenants have the right to rent in the UK by gathering important documents and identification. Even if you are using a letting agent it would be wise to meet with the individuals face-to-face to develop a relationship with them.

Insuring the property is your responsibility, you can tailor a policy to suit your needs. Residential Landlords Insurance should typically cover you for: buildings insurance, contents cover, loss of rent, public liability and employer’s liability. If the property is furnished, draw up a detailed inventory of the contents. You need to provide proof of the items included in the tenancy agreement, as well as documenting the condition of each room. Sit the individuals down and talk them through the agreement in detail to make sure they understand everything. If both parties are in agreement before the tenancy it will help to avoid disputes in the future, or at the end of the tenancy.

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by Abi Pritchard

Tips For Building a Great Kitchen

Let's face it, the kitchen is the room where everyone lives. Our lives are focused around food, whether it is Mum preparing food in the kitchen whilst the kids are doing their homework, having dinner or the long breakfast and lunches on the weekend. The kitchen is where it happens. So if you are renovating your existing kitchen or building a new one from scratch, we give you some great trips to put in place:

• Think budget
• Making it practical
• Using space effectively

 

Think Budget

 

 

Sure, we'd all love the world's greatest kitchen, both beautifully designed with all the latest tech and gear that comes with it. Whether it is pop-up TVs, hidden cupboards, power taps or the funky tap that changes hot and cold. But whilst The Mirror explains that even the most practical kitchen can increase your home's value by 4%, you still have to be conscious of budget and we will explain why.

The reality is that the cost of your kitchen needs to relate to the value of the home and those on the road. If your house is worth around £500,000 and so are all the others on the road, there is no point spending £100,000 on sprucing up a kitchen because your house value cannot rise by more than £100,000 - especially if all the neighbours' home similar in size. So you have to be practical in how much you spend and how this impacts the overall value of your home.

There is also no overall benefit of having the world's greatest kitchen but then a mediocre bathroom, living room or dining room - as it does not fit in with the rest of the house and future buyers will not dig it.

 

Making It Practical

Does It Also Become Your Dining Room?

A lot of households are also making their kitchens their dining rooms as a way to maximise space in the home. After all, a lot of dining rooms are only really for entertaining and are sometimes grand rooms that just end of getting covered in dust.

So if you're one of these modern households that want to make the kitchen the main dining area, it is worth smarting it up a bit and also allowing enough room for family and friends to join you around the table. This means that there is no point having a table with just 6 chairs around it but getting a table that can expand and fit 12 could be worthwhile.

 

Using Space Effectively

 

 

If you like to cook or you have kids that like to work and hang out in the kitchen, you can use space very effectively. For instance, case studies from leading designer The Wood Works shows the use of an island in the middle of the kitchen to store things and also clever bar stools for your children and their friends to hang out.

On the subject of making it child-friendly, a careful consideration is how it works for kids of all ages. For instance, if you have small children, does the table and island have space for a child seat? Can they climb up the bar stool without your help? Does it provide them with some support or will they fall off? In addition, you want to be careful about any tables of boards having sharp edges that you or your children could potentially bump into, especially if they are at heigh level for your offspring.

 

Colour

The colour of your kitchen is a careful consideration. A lot of kitchens go with the subtle tones of white (to match white goods) or light tones of grey, beige or even wood. If you are doing up a property as part of a property development finance project, you want a look that is fitting with the rest of the house and not too overpowering. Similarly, what chair colours and accessories go with it is also something to discuss - with the pink chairs featured above working nicely.

 

Easy To Clean

The kitchen is where we prepare food and where our children spend a lot of time - designing things and doing arts and crafts. So creating a kitchen that is easy to clean is very important. Some like the metallic look, like a restaurant kitchen just because it is so easy to clean. But for some people, you need to consider what materials and surfaces are most practical. For instance, tiles can be tougher to clean as things get through the cracks whereas flat surfaces and marble are certainly a lot more convenient.

 

Flooring

Your flooring must be practical. Whilst some shades of limestone look amazing, they can be on the slippery side which makes it not well suited for children and having lots of guests.

On the topic of cleanliness, the flatter surfaces are easier to clean compared to tiles or carpet which is likely to get stained or have things fall in between the cracks.

 

The Appliances

Are you a big family with a big appetite? Especially with babies and toddlers, you need a fridge to hold all the foods and formulas. Do you go with a normal size fridge or with a mega fridge like you see on MTV Cribs? Depending on your space, you can opt for the fridge and freezer in one, or some people have their freezers in the garage or utility room.

 

Fewer and fewer people are putting microwaves in their kitchens these days - after all its like nuking your food and can't be healthy, right? The only reason people use microwaves is really for popcorn anyway. But how your diet and your family's food habits vary will determine whether or not you need one and if so, you have to make space for it. With some people putting them plugged into the corner of the room or having them fitted within the actual wall units.

Other things to discuss are whether you go for an old school gas hob or a new snazzy electric hob. They say that gas hobs are more effective for cooking up a storm whereas the electric hobs are much easier to clean - so you have to weigh it up.

Is there anything else you would add to your perfect kitchen? Comment below!

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by Daniel Tannenbaum

What Are Your Rights as a Tenant?

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by Daniel Tannenbaum

What Are Your Rights as a Landlord

With the rental sector enjoying a boom in industry, more and more people are interested in becoming a landlord or are simply curious to what it entails to be a landlord! Specifically, bridging finance is commonly used by buy-to-let investors and property developers who are looking to use the money to purchase a property, develop it and rent it out to tenants (both residential and commercial).

Overall, a lot of the responsibilities in a rental/tenancy agreement lie with the tenant or tenants, and people seem to know the rights of tenants more than they do with the rights of a landlord.

If you are wanting advice on how to evict a tenant and generally want to know about your rights with eviction, click here and here.

What Are Your Rights?

Payment of Rent:

• You should always have a tenancy agreement in place, such as a assured shorthold tenancy agreement. This will initially set out the amount for rent payable by the tenant to you, and when it will be paid.
• It is best to get your tenants to pay the rent to you by standing order, this way you are pretty much guaranteed to get your rent payments each month. Furthermore, you will have evidence of which payments you do receive, and more importantly, the payments you do not receive.
• If you find that you have a tenant or tenants that do not pay you for a set period, and there is no solution forthcoming, then you as the landlord have the ultimate right to serve the tenant or tenants an eviction notice. However, you must be sure to follow a procedure when doing this as explained a bit later on. You can also legally attempt to reclaim any unpaid rent, since it is legally yours.
• Check the terms and conditions laid out by the letting agent before signing an agreement.

Raising the Rent

• You may, at certain points in the tenancy, put up the rent. This will depend on the specifics of the tenancy agreement at hand. You may have to wait for a full fixed term to end before you can make the increase.
• You cannot simply just charge what you want though. The rent has to justifiable, and as do the reasons for upping the rent prices. The rent also has to be similar in comparison to other properties rent prices in the area. Otherwise, you tenant will be entitled to complain and then you will be forced to restore the price of the rent back to an acceptable enough level, or back to what it was before.

Damage and Neglect to the Property

• Unfortunately for your property, damage caused by those occupying the property and their visitors is not uncommon. The damage can easily be by accident, but in some cases it is on purpose. Either way, there will always be tenants who do cause damage to your property and belongings, if the property Is furnished. As a landlord, you may chose to pay for repairs as part of the agreement, this is quite normal – but have the right to evict if you believe major damage was done on purpose.
• Your tenants have a very high level of responsibility to keep the house or flat clean, in good condition and smoke-free (unless your agreement states otherwise). They are also expected to complete the basic maintenance like changing the lightbulbs and using the heating system responsibly. While being a landlord comes with the responsibility of carrying out most repairs, you do have the right to charge tenants for repairs if you see it fit.

•  Tenants are obliged to stay within the terms of the tenancy agreement. This includes matters regarding as the keeping of pets – if damage or maintenance is required because of this, again you can take a deduction from the tenant's damage deposit or ask them to pay for the cost of repair altogether, since they have violated the contract.
• However, the exception to all of this is for 'fair wear and tear' such as to carpets or other furnishings – you can't charge the tenant for these since they are bound to be damaged in some way, shape or form.
• If you ever propose to charge a tenant for something of this nature, be sure that you have proof that the damage was caused while the property was occupied by those you are charging. You'll want to take photos to refer to and should properly cost the level of damage caused, complete with quotes to back you up if the tenant chooses to dispute the figure.
• If any damage is considered beyond the 'fair wear and tear' rule and the tenant will not either repair it themselves or pay for the cost of repair, you have the right to serve an eviction notice and retain the sum of money from their damage deposit to cover the cost of the damage and repairing this damage.
• Your last resort may be to go through a legal process to ask the tenant to repair the damage at their expense, but that may not be a viable option as costs could escalate. There are those who specialise in tenant eviction services that could help you through the process of doing so.

Gaining Access to Your Property

• It is actually illegal for you as a landlord and owner to enter your own property without agreement from your tenant prior to asking for access. Landlords do have rights to what is dubbed 'reasonable' access to carry out any repairs for which they are responsible for, but you will always need to get permission from the tenant with at least 24 hours' notice. If you don't follow this process, which can be a simple mistake since it is actually your property, you could be prosecuted for 'harassment'.

As a round up, here’s a quick reminder of what you do NOT have the rights to do as a landlord:

• Visit your tenants without prior warning or good reason, such as an inspection or to carry out duties of repairs, for example.
• You cannot make your tenants leave immediately, or physically force the out of the property and ‘help’ them move out. You must be careful not to make an illegal eviction, this can lead to serious legal action.
• It is a criminal offence to harass your tenants at all, this includes turning up to the property impromptu.

 

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by Daniel Tannenbaum

How To Report Noisy Neighbours

Nowadays, it is unfortunate that encountering noisy neighbours is not all that uncommon. You could complaining about noisy neighbours due to loud music being played, parties  until the early hours in the garden or inside the house you are attached or directly next door too or pets making extreme levels of noise, especially does barking for hours upon hours.

Noise from neighbours includes:

• Loud music/TV
• Loud talking
• Machinery
• Pets
• Construction work

If you are finding that your home-life and relaxing time is being effected by any noisy neighbours, please take a look at our tips below.

Personal, face-to-face contact

To start off, you may not want to jump straight into reporting your neighbours to the local authorities without direct discussion that may potentially resolve the problem. Reporting them without any communication may cause unnecessary tension between yourself and your neighbours, creating an unpleasant home environment.

It may surprise you that your neighbour is actually unaware of the noise  and therefore, disturbance they are causing. They may be unaware that you can hear them so clearly or that it is having a negative effect on you, especially if you are a little quieter than them.

The subject of ‘I think you are a noisy neighbour’ and potentially, ‘all the other people on the same street agree that you are a noisy neighbour’ can be a hard subject to bring up. So, we advise that you approach the situation in a calm, polite manner, whilst remaining firm and unapologetic. Avoided approaching them when in a heated moment as this is likely to cause arguments and create standoffish atmosphere. It is not advisable to phrase it is as a personal attack, or an attack in anyway at all. This will probably lead to them not listening to you properly, but rather being defensive and possibly retaliating.

It is important that if you feel in anyway unsafe approaching them alone, do not do it. However, avoid a whole gang of you going – this will make it feel like an attack and extremely intimidating for the person you are approaching about the noise.

Other personal contact

If you are not confident enough to approach them in person, or it just hasn’t worked, try writing them a letter. Include in the letter that you understand that they are probably unaware of any disturbance caused by them, and you are not claiming it is deliberate or out of spite. But you must explain the situation clearly and why and how it is effecting you and possibly the surrounding neighbours.  Make sure you end the letter by thanking them for understanding and not being awkward about. If they do make the effort to comply,  please do recognise it – and show your recognition by sending over a small gesture, like a thank you card.

Contacting the local council

Alternatively, if they do not make an effort to change or for some reason it gets worse, you may be forced to contact the local authorities. In the UK, you can report any noisy neighbours to your council through a tool on Gov.uk

Your own local council will have a specific office to deal with noise disturbances in the area. In a lot of cases, is office is located within the remit of the environmental health department, or in larger cities they may have a dedicated noise pollution team. The local police station in your area may also have a dedicated team that works to help and act as the mediator if you and your neighbor are unable to come to an amicable agreement or solution.

Your local council will also advise you to keep a small diary type of thing to record any disturbances. You should keep record of when the disturbance took place, how long you were experiencing the disturbance for  and what the disturbance was at any particular time.

Try and keep it as factual as possible. Try a format similar too: Unable to sleep until around 4am, sounds like they had people round until the early hours with loud music – have to get up at 7 for work. Avoid writing down any irrelevant information, like that you are angry or the way you were feeling in general, this will then just turn into what sounds like a personal, everyday journal.

You can even record the noises and the activity using a recording device, a mobile phone or a video digital camera. But it is very important to note that under no circumstances should you publish these recordings or videos, they should only been used as evidence to present to the local council. So do not put it on Facebook, or Twitter or any other social media outlets, ever!

The local council do have the ultimate power to issue official warnings or an ‘abatement notice’. The abatement notice aims to forbid the nuisance from happening altogether  or just to restrict it to certain times of the day. If your neighbour fails to adhere to this notice it is actually a criminal offence, leaving them open to a fine. In some areas of the country, councils have the right to get out on the spot fines. Councils are obliged to take action under the Environmental Protection Act 1990.

Getting the police involved

If a noise disturbance happens to play out at night, usually when it happens between the hours of 11pm and 7am, your local police will usually be the ones to take action. They will normally sent a community support officer to take responsibility for taking action on any noise complaints. They will usually be able to intervene to get the music turned down or off, or even help t mediate towards an agreement.

If a noisy neighbour is persistently disturbing the area, it can be seen as anti-social behaviour. If they are in rented accommodation they may be at risk of losing their home, as the landlord may evict them. This applies whether they are in local authority or social housing, or privately rented accommodation.

All of this information provided her applies to all forms of anti-social behaviour, other than violent and threatening behaviour. If there is violent or threatening behaviour report them directly and to the police every time.

For more information, watch this useful video below from an experienced property lawyer:

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by Daniel Tannenbaum

Getting Security For Your Property

Property security is crucial for properties of all nature; both residential and commercial, public and private. Ensuring sufficient measures are implemented provides property owners with the peace of mind that their property is protected from vandals, intruders, trespassers and squatters. However, there are a wide range of potential measures that can be put into place for the security of properties and it can be difficult to choose from these.

The most common types of security tends to be separated into 2 distinct categories:

• Electronic security: such as alarms and Closed-Circuit Television cameras (CCTV)
• Physical security: such as fencing and barrier security.

Physical security can also include manned security including security guards, site marshals and guard dogs (source: Secure Site). There are advantages to using each type of security with each incurring different costs.

Because of the plethora of options around, it is crucial to understand some of the most common types of each category of security so your property, be it large or small, an office or a pub is suitably and adequately secured when it is vacant. It may be the case that you are in the process of building a new property, having just secured construction finance and you do not want the building site to be unprotected. There are a lot of potentially valuable items and assets on building sites that are appealing to burglars and trespassers.

 

 

Electronic Security

This category refers to any electronically powered form of security, of which there are many. Some of the most common types of electronic security are CCTV systems, alarms and lighting; all of which are powerful deterrents and preventers of unwanted visitors, vandals and trespassers.

CCTV Systems – These systems range from basic arrangements where there are just a few cameras that record, not needing to be checked until such time their footage is required to more complex systems that utilise motion detection technology and infrared night vision capabilities. Furthermore, CCTV cameras can be overt (visible to all) or covert [hidden]. The beauty of CCTV is that there are options for residential and commercial properties as well as for building sites. They are an effective way to secure prosecutions as any trespassers or potential burglars are caught on film to be handed to the relevant authorities.

Alarm Systems – Alarm systems are one of the most effective deterrents any site or property owner can utilise. Using motion detection; upon being set, any motion in the areas covered by the alarm sensors will set off the alarm, drawing attention to the site in question. Moreover, many alarm systems are monitored by alarm monitoring companies, sometimes alongside CCTV which allows them to alert the local police to any intruders. Just the site of an alarm box displayed on a property or site perimeter is a strong deterrent to burglars and intruders who tend to steer clear of properties and sites covered by alarm systems.

 

Physical Security

The most effective and cost-efficient methods of physical security tend to be barrier-related security which forms a physical barrier between any potential intruders and the site or property. Alternatively, for higher value properties and sites as well as those that are suited to it, having security guard, often with guard dogs is one of the strongest deterrents available.

Barrier Security – There are many types of fencing, hoarding and barriers that can be put in place to make intrusion and trespassing extremely difficult. For example, in the case of derelict or empty properties, a popular solution that isn’t too expensive is boarding up all windows and doors with steel or ply-wood panelling. Additionally, for sites where fly tipping, travellers and vehicular trespass are all possible, concrete bollards and hoarding can be implemented, making it impossible for the offending parties to enter without authorisation.

Manned Security – This is one of the most effective methods to protect a site or property; manned security will entail at least one security officer or marshal who will usually be trained to the minimum Home Office Standards (holding an SIA licence) being present on site. They may perform mobile patrols or them may man a static post such as the entrance or other vulnerable point of the site. Sometimes, and depending on the exact arrangement with the security provider, guard dogs may be provided to add an additional level of security.

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by Daniel Tannenbaum

What is Stamp Duty?

Stamp Duty or and-tax/residential-property-rates">Stamp Duty Land Tax (SDLT) as it is known, is a tax on the purchase of properties and land in the UK and Scotland. It is a one-off lump sum compulsory tax that must be paid within 30 days of completing on a property. For customers taking out bridging finance, it is important that they incorporate the cost of stamp duty into the mix when buying a property and doing any refurbishments or rent out to tenants.

In short, when it comes to stamp duty, the more expensive your property, the more you pay. If you want more than one property, the more you pay. Simple.

How Much Stamp Duty Will I Pay?

The amount you pay in stamp duty will depend on the value of the property you are buying, whereby the higher your spend, the most tax you pay. Following the Chancellor's Autumn Statement in December 2014, there has been a change to the traditional slab system which involved paying a single rate based on the property. Currently, we have a tiered structure which is more progressive and means you pay a portion based on every level.

Based on buying a property for £500,000:

Old system:

• 1% on a property between £125,000 and £250,000
• 3%  on a property between £250,000 and £500,000
• So because the purchase price is over £250,000,  you would have paid £15,000 in stamp duty.

New system:

• You pay nothing below £125,000, which is £0
• You pay 2% between £125,000 and £250,000, which is £2,500 (based on taxable sum of £125,000)
• You pay 5% on the value of the property above £250,000, which is £12,500 (based on taxable sum of £250,000)

So in total this means you'll pay £15,000 (£0+£2,500+£12,500).

The new stamp duty calculations, whilst they may seem the same for a property worth £500,000, it benefits those buying properties below this. For instance, a property worth £300,000 previously would have incurred a stamp duty fee of £9,000, under the new system would only cost £5,000.

Stamp Duty on Additional Properties

Anyone buying an additional property (in addition to their main residence) will be subject to a much higher stamp duty, provided that the value of the estate is more than £40,000. In some cases, the cost of stamp duty for a second property can be double the cost of the first property's stamp duty.

How Does Stamp Duty Work in Scotland?

The Scottish system does not refer to this tax as stamp duty anyway, following a reform by the Scottish Government in April 2015. It is now called Land and Buildings Transaction Tax and it still functions the same way as stamp duty - everyone has a set amount to pay based on buying a property or land costing more than £125,000.

The only difference with the Scottish system is the thresholds and percentages charged. See below:

UK: £0 - £125,000 (no fees)

Scotland: £0 - £145,000 (no fees)

UK: £125,000 to £250,000 (2%)

Scotland: £145,001 to £250,000 (2%)

UK: £250,000 to £925,000 (5%)

Scotland: £250,000 to £325,000 (5%)

UK: £925,000 to £1.5 million (10%)

Scotland: £325,000 to £750,000 (10%)

UK: £1.5 million+ (12%)

Scotland: £750,000 + (12%)

How To Pay Stamp Duty

Your solicitor that arranges your mortgage and property purchase will usually handle the stamp duty payment. They are usually very eager to get this paid for you which is why some solicitors will ask for the stamp duty money up front - and some will pay it after. By not paying your stamp duty within the 30 day window, you will be subject to the following fines:

Length of delay	Amount of penalty
Documents late by up to 12 months	10% of the duty, capped at £300
Documents late by 12 to 24 months	20% of the duty
Documents late by more than 24 months	30% of the duty

 

If you want to pay your stamp duty yourself, without a lawyer, you need to find your unique 11-digit reference number (UTRN) which can be found online or via your stamp duty return. You can then pay the HMRC by phone or online through their bank account. Payments can take up to 3 days, so you are recommended to get payment in nice and early to avoid any fines. There are also options to pay by cheque, post or credit card (this will incur a fee). You may be required to present a valid pay-slip if you wish to pay by cheque or post as verification.

Stamp Duty Calculators

A stamp duty calculator can give you a quick calculation based on the cost of your property. We recommend the following tools:

and-transaction-tax-calculator-wales">MoneyAdviceService Wales

and-and-buildings-transaction-tax-calculator-scotland">MoneyAdviceService Scotland

and-tax/#/intro">HM Revenue & Customs

 Cost of Moving House Calculator

Other Costs To Be Aware Of

Whether working on a buy-to-let or developing a new property, stamp duty is not the only cost that you need to be conscious of. Other key costs include buildings and contents insurance which will allow you to cover the cost of any potential mishaps to your property development. This can involve any damage to the building by flood, fire, peril, vandalism, fly-tipping or similar. Your contents insurance will cover you for any furniture or items inside that are at risk of theft or even materials used to renovate the building.

Public liability insurance is necessary in case any work carried out by your buildings has a detrimental impact on any neighbours or passersby e.g a roof tile falls and hits the neighbour's car. Your liability cover accepts that you take responsibility and are willing to cover any repair or replacement costs.

When working on a development or property project, it is worth having an extra 10-20% in the kitty for any contingencies. This is extra money in case something goes wrong. For instance, what is you find asbestos on the property and have to hire a professional to remove this? What if there is very bad snow weather and this delays your project by several weeks, requiring you to pay your contractors more? You can never be sure when something unexpected will arise, so having that extra money spare can be crucial.

Other additional fees include the 'arrangement fees' charged by lenders who put together your application prior to funding your purchase. This is part of underwriting and carrying out checks to see if you are suitable for their financial product. This is usually around a 1% fee of the total loan value and is seen as a commitment between you and the lender which is why most lenders require this to be paid before the loan draw down.

Other fees include broker fees of around 2% which are collected upon the funding of a loan. With so many variations and bridging products available, a quality broker can help you source the best provider and save money with the most suitable rates and product.

Further fees include the cost of valuing your property which is required by the lender prior to funding your application. The cost of the valuation may vary based on the value of the property and each lender will use an independent surveyor. This is likely to be also be around 1% of the loan value, but will vary.

Finally, your solicitor will be crucial during the funding process, reviewing the loan contracts, reports from the surveyor and making sure all aspects run smoothly and are paid on time. You will incur solicitor fees, again, depending on who you use and the cost will depend on the complexity and scale of the project.

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by Daniel Tannenbaum