Real-estate.co.uk

UK property resources for buyers and sellers.

Capital : London

Population : 60 million people or 625 inhabitants / mi² (one of the most crowded country in the world).

Most of the population is concentrated in England (51 million people).

Population growth has been static recently.

25 million tourists visits Britain every year.

Foreign Community : London is the world’s most ethnically diverse city. There are about 5% of immigrants or their descendants in Britain coming from Commonwealth countries (Especially the Caribbean, Bangladesh, Pakistan, India and Africa).

England : 50000 mi²

Wales : 8000 mi²

Scotland : 30500 mi²

Britain (England, Wales and Scotland) : 88500 mi²

UK (Britain and Northern Ireland) 95000 mi² (245000 km²)

Britain has a mild and temparate climate which basically means mild and damp.

The weather in Britain is always changeable. It can be sunny one minute and then rain the next. A rainy day is often followed by a sunny one.

The maritime influence tends to make the west of the country milder and wetter than the east.

The amount of rainfall also increases with altitude in northern areas.

Spring is the most pleasant time of the year.

In summer, the sea is cooler than the land. Temperatures don’t go up 30°C. In London, the average temperature in the summer is 21°C.

In winter, the sea in warmer than the land. This prevents temperatures to drop below 0°C in England and Wales. In Scotland, wi nters are often harsh and temperatures drop below freezing at night.

Currency : Pound sterling.

Interest rates : 4.75% (December 2004)

Cost and Standard of living

Compared with many countries, the cost of living in Britain is high, especially for food and consumer goods. Although there is a large difference between the rich and expensive south compared to the ‘poor’ and less expensive north of England, Wales, Scotland and Northern Ireland.

Taxes and duty on cars, petrol, alcohol and tobacco are high.

London is one of the world most expensive city to live in. This is mainly due to the high cost property.

There are 3 income tax rates in Britain :

Up to 1500 Pounds : 10%

Up to 28000 Pounds : 23%

More than 28000 Pounds : 40%

There are no capital gains tax (CGT) on a profit made from your primary home.

There are no wealth tax.

Inheritance tax : 40% if more than 231000 Pounds (seek expert advice).

Value-added tax (VAT) : 17.5% on levied on most goods and services.

The home ownership is one of the highest in the European Union with 65%.

During the early 1990s, there was an unprecedent collapse in the value of property.

In october 1995 the average UK house price was of 55000 Pounds.

Since then, the market has fully recovered.

The average price of a house in 2001 was 85000 Pounds.

At the start of 2004, the market was robust and UK prices were at an all-time high of 150000 Pounds.

Since then, the market reached a point where prices have ceased to rise and are in fact falling slightly in many places (december 2004). Experts say that a crash in a very unlikely prospects and that prices have finally reached their peak in the current cycle.

The current forecast is that prices should begin rising again in spring 2005 : unless unexpected interest rate rises, buyers should return to support demand. 0% inflation is expected in 2005.

For a long-term investment, a best buy is a character, period house or a waterfront property or a property in Central London (especially at the top-end of the market).

Property in central London is among the most expensive of the world.

Oversea buyers favour areas such as Mayfair, Kensington, Knigthbridges, Belgravia and St. Johns Wood.

Thought after areas for second homes in Britain

Second home owners favour areas such as Lake district, West Country (Cornwall and Devon), Wales, East Anglia and the Chilterns.

House prices vary considerably whether it’s located in a city or in the country and depending on the region.

London

The average time to sell is 6.5 weeks (october 2004)

Number of viewing per sale : 12

The repayment period is usually long (25-30 years). Monthly repayments are then kept relatively low.

It’s often cheaper to buy a house than to rent one. For example, taking out a repayment mortgage of £100000 on a 25 year basis at 5.25% would mean monthly repayments of around £600.

Mortgages of 95% are widely available and first-time buyers get discounts.

They vary from £400 to £900 / year depending on the value of the property, on the area and on the number of people living in the property.

Most houses are sold freehold, which means you legally own the property and the lands it stands on.

It’s your job to maintain the property. Check if it is on a conservation area zone for extension or modification restrictions.

In multiple occupancy, the residents may buy the freehold together to ensure that the property is well maintained.

Leasehold :

Appartments (flats) are usually owned leasehold. The buyer owns a lease to live in the property for a set number of years (99 to 999) after which it reverts to the freeholder. The owner of the building is a person or company who owns the freehold and you will have to pay them an annual ground rent and an additional service charge for the maintenance of the building, building insurance and cleaning. Be sure to check the details of the lease when you view the property.

If the lease is soon to be terminated, it’s now possible to renew it by buying it again from the freeholder. Also if you plan to buy the freehold later, be sure that you know who is the freeholder as sometimes, the original freeholder has sold the lease to a develloment company which has itself sold it to other develloment companies.

Be aware of the amount of work needed to repair a structural problem. The fees are usually split between the leaseholders but you may end up to pay £25000 suddenly.

Commonhold :

This is a new form of ownership. The flats are leasehold by their owners and the common parts (stairways, gardens, hallways) are owned and managed collectively by the owners.

In England, Wales and Northern Ireland, the offer is subject to survey and contract. The sale is legally binding only after the exchange of contracts

In Scotland, neither sides can pull out once an offer has been accepted.

Fees :

A total of 3% to 5 % of fees is usal and this includes legal fees, land registry fees and stamp duty.

Stamp duty amount for 1% to 4% depending on the price.

Mortgage fees are valuation fees, indemnity insurance and acceptance fee. Survey fees are optional but common on older properties.

Note that the fees for buying in Britain are lower than most other countries.

Here is a list of the fees with the relative cost for a £150000 property:

Don’t forget insurance : after investing this much money, you need to arrange with Buildings insurance to protec your home against hazards.

Note that you can now get 100% mortgages and you don’t need a deposit. But you’ll get a lower rate if you can put one.

London’s postal district were created by and for the Post Office depending on delivery zones and sorting offices.

Estate agents frequently advertise a price with a postcode only.

A change in a digit can reduce prices by thousands of pounds.

Acton

Acton Green

Balham

Barnes

Battersea

Baywater

Bedford Park

Belgravia

Bethnal Green

Blackheath

Bloomsbury

Bow

Brixon

Canberwell

Camden Town

Catford

Chelsea

Chiswick

City

Clapham

Clerkenwell

Colliers Wood

Crouch End

Crystal Palace

Deptford

Docklands

Dollis Hill

Dulwich

Ealing

Earls Court

Earlsfield

Finchely

Finsbury

Finsbury Park

Fitzrovia

Forest Hill

Fulham

Gipsy Hill

Golders Green

Greenwich

Hackney

Hammersmith

Hampstead

Hampstead Garden Suburb

Hendon

Herne Hill

Highbury

Highgate

Holland Park

Islington

Kennington

Kensal Rise

Kensington

Kentish Town

Kew

Kilburn

King’s Cross

Knightsbridge

Lewisham

Leyton

Maida Vale

Marylebone

Mayfair

Merton Park

Mill Hill

Mitcham

Morden

Mortlake

Muswell Hill

Neasden

New Cross

Newham

Norbury

North Kensighton

Notting Hill

Palmers Green

Peckham

Pimlico

Poplar

Primrose Hill

Putney

Queen’s Park

Raynes Park

Regents Park

Richmond

Roehampton

Sheen

Shepherd’s Bush

Soho

The South Bank

Southfields

Southgates

South Kensington

St John’s Wood

Stepney

Stoke Newington

Stockwell

Streatham

Stroud Green

Teddington

Tooting

Tottenham

Totteridge

Tufnell Park

Tulse Hill

Twickenham

Vauxhall

Walthamstow

Wandsworth

West Brompton

West Hampstead

Westminster

West Norwood

Whestone

Whitechapel

Willesden

Wimbledon

The London Plan for the next 35 years.

Absorb 800,000 more Londoners by 2016. This will put the London’s population to 8.1 millions.

It requires 30,000 new homes a year, rising from 23,000 in 2004.

Develloments planned forn Deptford, Elephant & Castle, Stratford, Willesden Junction, Cricklewood, Highbury, Finsbury Park, King’s Cross, Vauxhall, Nine Elms, Whalthamstow, Leyton, Dalston, De Beauvior, Bow and Crystla Palace.

Other grands projets:

Dozens of new office towers in Canary Wharf, Crossrail (planned east-west rail under London), Thames Gateway Bridge.

Please refer to the 400 pages Plan of Mayor Ken for more details.

Note that these projects may never be realized and may become ‘footnotes of history’.Why ? Because they needs billions of Pounds of investments to be realized and only political will can attribute these amounts.

Schools

Getting your children into the right school is important. Check with your estate agent and the school itself that you’re in the school catchment area.

Council tax

You could be paying 500 Pounds more than owner of the property which is a few streets away.

Don’t hesitate to write your council if you think that your tax is too high. This is possible only shortly after the purchase.

Services

Check that the services and amneties are adequate : rubbish collection, road mending, sport centers, parks, cinemqs, shops and restaurants.

Crime

Have a look atthe local authority website to find out whatare the crime statistics in your area. Talk to local shop keepers to learn more. It’s important to feel comfortable when you come home at night after work.

Flat and house Prices

Check for planned devellopments, investments, new transportations, proximity to hot areas... You may find a good deal.

From the book profit from your property

More than 70% of households in England own their own homes.

Congratulation ! Property is an excellent investment.

So why and how to get on the property ladder if you’re a first time buyer ?

Instead of letting, you could see the place you live as an long term investment. The monthly cost is similar and after a period of 20 to 30 years, you own the property. No more throwing out money down the drain without any returns.

When you own your own flat or house, you can decorate it to your own tastes and make decision about it without anyone else’s permission. Decorating rented accomodation is waste of time and money. On the countrary, speding money on your own home such as buying new furnitures, painting and wallpapering makes sense if you own the property. Remember that keeping your home in good decorative condition is important : you will have less work when you will want to sell it.

However, you become less flexible concerning job relocation than if you’re letter because the amount of time for selling a house is several months. Young professionals tends to let their home until they are in their 30‘s or until they marry. Don’t forget that a mortgage is a financial burden for a long period of time and that you will have to pay it back on a regular basis if you don’t want to loose your home.

You need to know what you can afford. Usually, you can get a mortgage of 3 to 3.5 times your annual income. Look at your finances and take advice from your accountant or bank manager to calculate the monthly repayments you can make for a mortgage of this size. When you set an upper limit, don’t be tempted to extend it unless you thought about it carefully. There are other cost involved in buying a property including legal fees, survey costs, stamp duty, lender's fees, land registry costs, moving costs, building insurance and VAT.

Then, approach several mortgage lenders and ask them for a written ‘offer of principle’ of how much they agree to let you borrow.

When buying a property to live in, home comes first. You are not planning to sell it with a profit or to devellop it. You will choose the area thatfits your lifestyle. You often invest all the money you have on transforming it into the perfect place for you and your family. There is no budget or price tag, you can impose your own style.

On the countrary, if you want to buy and devellop the property and make a profit from it, refer to see the ‘buying as a business’ section.

Estate agents

Once you have choosen the area you want to live in, start to check agent’s websites regularly and in local newspapers.

Take contact and register with estate agents’ and show them your written ‘offer of principle’ that you got from your mortgage lender. They will then call you regularly and show you many homes.

To make sure that the agent doesn’t forget you, call them regularly. Some thought after properties are coming up on the market and are not all the time advertised. Stay in touch regularly, be punctual and polite when visiting properties, the agents will be more enclined to see you as a serious buyer and to call you as soon as something suitable comes up.

Don’t forget the the agents are paid by the seller. You will be able to propose a buying price and the agent has the obligation to transmit any offer to the seller. Also, he will be able to advise you if the offered price is to low and will sure be refused.

Private buying

Buying privately can save you a few thousands pounds as the seller doesn’t have to pay the estate agent.

Look for small ads on the internet and in newspapers. Not all private sells are a bargain. You should be familiar with the property prices prices to be sure that the seller deduct the agent’s fee from their selling price.

You will have to negotiate directly with the seller and work out the price so that you to save money.

Be aware of wrong descriptions, lost of time and confirm any agreement in writting.

Note that it’s better to negotiate via a mediator should problems show up : you are not personally involved and it’s less stressf ul.

Off-plan buying

The advantage of buying early in devellopment is that you can choose the way your property will look and that prices are generally good and this often means a good investment is the market is good.

To find out about new devellopments that have yet to be built, check in the property press.

Visit the previous develloper’s work. Get in writting the planned internal fixtures and fittings and make sure that the property gets the final building control inspection and has a new building guarantee from the National House Building Council.

Auctions

You can find out about auction in your local newspaper or on the net.

Be very careful and get familiar with the auctions process before buying anything. Visit an auction house and just sit. Start by buying low value stuff such as furnitures or antiques to understand how excitment can carry you away.

Act in a professional way : do research well in advance on the properties you’re interested in, stick firmly to an upper limit and stick to it.

Auctions are usually attended by investors and professionals only and you may get carried away by the excitement and paying a lot more than the property value. Once the hammer is down, you have to pay for the property within 4 weeks. So be sure that you planned the corresponding mortgage. Bear in mind that your maximum price is more important than the property. Also, the auction house will add their fees to the property final price.

Be aware that many properties put on auctions need major structural work.

Others

Winter is usually the low seasons and the occasion for lower property prices.

Get familiar with the local property prices buy visiting at least 10 properties. is very important. Locating a good buy is a science based on experience.

After 10 properties, you will be able to feel if a property price is right relative to it’s size and location.

After 20 properties, you would trully understand the pros and the cons. At 50 properties, you are an expert.

Take many notes about the pros and the cons of the property when visiting, note the time and date. If the seller allows it, use a camcorder or a digital camera.

Inspect the property carefully :

• Horizontal and vertical exterior walls,
• Exterior windows,
• major cracks (also around windows), inside and outside,
• more major structural problems,
• The roof, the tiles,
• signs of damps or smells, spongy floors, fungus in dark corners,
• poor DIY jobs,
• attempts to mask problems,
• condition of the plumbing and age of the boiler
• age of the electrical wires.

Value how much you need to turn the property into a home : structural repairs, roofing, new windows, kitchen, bathroom, floor and other Do It Yourself work.

If the property needs structural repairs, it’s not a problem : be prepared to fix it as soon as possible and make sure that the asking price reflects the cost of the work that needs to be done.

When you have spotted a property that realistically matches your wishes. It’s then right to visit a second time. Choose a different, visit it a few times at different times of the day and week : look for traffic, noise and sun exposition problems. Check if their is not a bad neighboor.

It may seem difficult for a first time buyer to get on the property ladder because of the recent rise in property prices.

However, with the right mortgage or by splitting the cost with a relative or by applying to council shemes, you can get on without too much difficulties. With more than 7000 mortgages and 100 lenders, there should be one to suit you, even if you don’t have a large deposit or earn a lot.

The right mortgage

Make sure you understand the financial implications and techical terms before you apply for a mortgage.

There are two major types of mortgages :

You basically split the repayment of the mortgages between the interest and the capital.

The interest of the loan is paid monthly to the lender and the capital is paid at the end of the loan.

Usually, you invest in an alternate fund to repay the mortgage. This is done monthly and you expect that your investment will cover the loan.

Your monthly repayments to the lender are covering the interest and the capital.

Your lender might insist on a life insurance in case you die before the end of the repayments.

Buying with another party

Most lenders add 3.5 times the main income and add one time the secondary income.

If you can’t buy a property alone, this is certainly a very good choice.

If one of the party cannot pay the loan, the garantor is liable. It’s essential to have an written agreement from a solicitor so that you and your partner be protected if one wants to leave or sale the property. And how much each party is contributing for the deposit and the mortgage repayments.

Example :

If you earn 30000£ a year, you can get a mortgage of 90000£ if you buy the property on your own or 150000£ if you buy it with someone else who has the same income.

Finding a garantor

Usually a parent will be your garantor and allow you to get on the property ladder. Basically, if you can’t meet your mortgage repayment, your garantor is responsible. A mortgage lender will more likely lend you a bigger loan if you have a garantor than strictly the what your salaries justifies.

Council shemes

The UK government has set up schemes to help those who cannot afford getting a mortgage in order to get on the property ladder.

Started in 1980, it has helped more than one million council tenants to buy their own home.

After 2 years of letting a council home, you have the right to buy it atonce at a discount price of 32% to 70%. Restrictions appliy depending on the number of years you were a council tenant and the area you live in.

Note that : you can use a ‘rent to mortgage’ scheme if you can’t afford to buy it at once.

The following schemes are available for those who want to acquire low cost homes :

• Starter home initiative
• DIY shared ownership
• Cash incentive scheme
• Conventional shared ownership
• Homebuy
• ‘Right to acquire’

Check with your local council to learn more.

Other types of mortgages

Are you really ready to get on the property ladder ?

Are you already in debt ?

• Can you pay additional fees related to buying a property (fees from solicitor, stamp duty, survey, mortgage broker) ?
• Are you sure that you can pay back your mortgage every month without running out of cash?
• Have you been declared bankrupt within the last 3 years ?
• Are you planning to travel the world in the near future ?
• Are you employed since less than 2-3 years?

Do not rely on valuation only, especaillay if the property is old or needs repairs.

A survey may well uncover major problems. Even if the money is tight, it’s better to pay for a full survey.

Basic valuation

This valuation is to satisfay the mortgage lender. It will check if the property has the value of the loan. It consists of a limited inspection which doesn’t show all the defects of the property and the ground it’s build on.

It is to the benefit of the lender only and isn’t of legal help should a problem arise after the sale.

Homebuyer’s Survey and Valuation report

The HSV is a standard survey which gives you legal recourse. It focuses only on the following matters :

• The general conditions of the property,
• Recommendation for further specialist inspections,
• Significant and urgent problems,
• Dampness of the walls, comments on damp-proofing, evidence of damp.
• Comments on timbers, woodworm or rot,
• Comments on insulation, and drainage (not tested),
• Cost of reconstruction if damaged (for insurance purposes),
• The property’s value.

Full structural survey

This is a complete inspection which is recommended for the following properties :

• All listed buildings,
• Any unusual construction,
• Properties built before 1900,
• A property that you want to alter or largely renovate,
• Properties that were dramatically altered.

You can tailor the depth of the survey.

It generally includes :

• Information on the location (useful if there is a local devellompent project which will make your home unsellable or if the ground has been contaminated),
• Recommendation for further specialist inspections,
• All minor and major defects,
• Cost of repairs and implication of any defects,
• Dampness of the walls, comments on damp-proofing, evidence of damp.
• Comments on timbers, woodworm or rot,
• Comments on insulation, and drainage (not tested),
• Details of the material used,
• Extensive technical informations on the property.

Before the survey, be sure that you specify to the surveyor what you want to be surveyed and where. Usually, the electrical wires and water supply are not checked thoroughly. Also, the surveyor don’t have to move furnitures or go on the roof unless you tell them.

After the survey, make sure that you understand everything with your surveyor.

Make a sound decision about buying or not the property based on the survey and the implicated reparing costs before exchange of contracts.

Finding a surveyor

You may have a recommendation from the agent or the mortgage lender. If not, contact directly the Royal Institute of Chartered Surveyors. RICS members are professionals giving impartial advices.

Profiting from a property means develloping it and changing it into a more marketable one.

If you want to buy a property and make cash from it buy reselling it at the higher price, you will need to think as a professional develloper.

• Target your market so that the property be in high demand,
• Decide on the area, it should be a promising area,
• Don‘t let your feelings blur your decision, no personal taste,
• Renovate for profit only : some renovations are profitable, some not.
• Organize yourself as a professional,
• Think about every penny spent with profit in mind,
• Calculate the time and energy you will need to put in.

Keep in mine that the pros of this is that it can be relatively profitable business. The cons are that it can also be stressful, expensive and time consuming.

Plan to resell the property 20% more than what you invested in it. This will protect you against unexpected movements on the market.

You get a deal if the cost of the house plus the additional renovation work is leaving you a 20% profit margin.

To evaluate a property resall value, go to a few estate agents with a property profile of how it will look like at then end and ask for how much a comparable property has sold recently (less than 1.5 month ago).

You’ll need to find out which particular product is in high demand on the market.

The market

The develloped property end product should be a sound home which will attract a maximum of people from all different lifestyles and ages.

The demand will depend on location, style, shape, size, facilities, local area facilities.

Identifying a narrower market

Decide who is going to buy your property. Keep it also attractive an as large as possible market as said above.

The area is often related to the targeted market. Then, once you have defined your target, you can easily decide on the necessary renovation and target price.

If you’re a first time develloper, try to choose the area that you already know well : a lot of research is necessary in order to know the prices, amenities and stock of available properties.

Do some research

Read newspapers and magazines, look in estate agents’ windows, learn how much and how fast properties are selling, spot good deals and up-and-coming areas.

Don’t rely only on what agents tell you.

There are independant property database, market surveys such as Hometrack, Alliance and Leicester ‘moving improving’ survey, which basically tell you the sale results of many estate agents in all the country or which areas people want to relocate to.

Use the Internet :

Check the school ratings at the Department for Educational Skills (DfES).

Check environmental issues with Homecheck.

Research on the region and future develloment projects via tourist information centres, local councils and local newspapers.

Profile the neighbourhood with the Up My Street website (crime rate, local events, average income...).

Speak with local groups such as Neighbourhood Watch or Round Table to find out any issues you were not told about.

Ask your sollicitor to check if any complaints have been registered concerning noisy neighboors.

Visit

After your research, spend an afternoon in the area in order to get up-to-date informations. Visit by car and also by foot.

Signs that an area is up-and-coming

If you’re not alone investing in the area, then it may be a good spot.

• A large estate agency is opening an office : this means that they did the research and decided to invest.
• Major banks are in the area.
• Chain stores, supermarket, smart cafés are opening.

• A lots of new flats or houses. The type of thoses property will be a good indicator of what is in demand.
• Major companies investing in the area : this means employment.
• Governement and council large scale plans and improvements. Note that this can affect the atmosphere of the area which is not always what buyers want.
• A new name for a neighbourhood which puts it as a distinct area.
• Business professionals residents or families.
• Good looking properties.

Being in good terms with your agents is important : they will do more to sell your property if they likes and respects you.

You don’t want the estate agent to put less efforts in selling your property, so don’t argue for 1% commission as it makes little difference to your total profit in the end.

At the beggining, the agent will send you the potential buyers from his database. Then, he will send you only new custumers. Try then to negotiate a contract which stipulate that you are bound with him for the minimum time : usually 4 weeks. Extend the contract if you’re happy with the services.

Make sure that the pictures of your property are excellent. A bad picture can drive away potential buyers. Check also if the agent’s description is correct: the surface measurement, sought after extras, proximity of local amenities and transport links.

Speak with your agent on a weekly basis. Ask about any feedback and if reccurant, try to find a way to fix the problem.

Answer your agent’s question as soon as possible and in a professional way.

Try to keep all the surveys, any work that you did, planning permissions and regulations together.

Send a full copy to your agent and sollicitor.

Association of Residential Letting Agents (ARLA).

0845 345 5752

Centre for Economics Business Research

020 73242850

Council of Mortgage Lenders

Homecheck : Property advice website

Homesale network property website

Hometrack : Prices and market trends

Office for standard and education

RightMove : property advice website