Is the UK housing market is broken.

The Government have identified the UK housing market is broken.

Serious changes would need to happen to cut out the conveyancing stress and the Government are keen to test reservation agreements.

Reservation / deposit agreements to lock home buyers and sellers to transactions could be trailed this year, a lead government official has revealed.

It’s been highlighted that the changes need to ensure the buying and selling process is quicker, cheaper and less stressful.

Matt Prior, from the Ministry of Housing, Communities & Local Government, explained at that the government thinks reservation agreements are worth investigating. ‘I do not think it’s the complete answer, but it might be a temporary fix,’ he said.

Currently on average it takes around 20 weeks for the homebuying process.  Prior stated: ‘If you put your house on the market today, 20 weeks later you will be able to move into your new home. Not only does it take a long time, it takes a lot longer than people have told you. It sets you up an expectation that’s probably not going to be met. This causes issues all the way through the process. People enter a distrustful mindset. You’re entering into a relationship where both parties are convinced the other side are going to cheat on you.

You’ve got a process that lasts 20 weeks. Why not try to lock people in a lot earlier? You have people who have tried to move two or three times, the buyer pulls out days before, it’s heartwrenching.’

The agreement for buyers and sellers would be to invest money into the new home, with the caveat of a refund for circumstances like a bereavement, job loss, inability to get a mortgage or if the property is unmortgagable.

Prior said the ministry is exploring links between the work being done on reservation agreements with work on making sellers provide some property information upfront. Behavioural insight research has also been commissioned, which is expected to be finished soon.

Ministers will then be asked if they want to test reservation agreements and if so they hope to launch a trial in the first quarter of this year.

 

Conveyancing Process – Buying

Image result for buying house

How do i buy a house, what is the conveyancing process when buying a house?

The conveyancing process can be very confusing and people do not sometime understand the process even after buying or selling a property. The main complaint throughout the process is it being very time consuming. Here at My Conveyancing Specialist we are here to make the process as simple and fast as possible.

 

Below is a Step by Step guide to the Conveyancing Process when Busing a property, it is a good idea to get familiar with this process if you are thinking of buying a property.

 

My Conveyancing Specialist Conveyancing – Buying a house

 

Step 1 – Receive a free, instant quotation

The first step is for you to fill out our quick and easy form to receive a free quotation. We are available to speak with you regarding the quotation and discuss any questions you may have.

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Step 2 – Instructing a Conveyancer

The second step is you choosing My Conveyancing Specialist, once you are happy with your quotation you can begin the conveyancing process by instructing us to carry out your conveyancing. This is where you will be asked to complete some paperwork and provide us with the standard documents, such as ID. This is also where we will request funds for any searches needed.

 

Step 3 – Draft contract

At this stage we will request and receive the draft contract completed by the seller’s solicitor/conveyancer. This will include all the relevant forms and documents for the property being sold.

 

Step 4 – Searches and investigation of title

At this stage we will review all the paperwork received from the seller’s solicitor/conveyancer and we will carry out any searches that have been requested by yourself. If any issues or queries are raised at this stage we will contact the seller’s solicitor/conveyancer to rectify the problems.

 

Step 5 – Report

This is the stage where we will create a report on the property being sold, we will collate all the information received along with your mortgage offer. You will receive a completion statement at this stage with the total amount due from you.

 

Step 6 – Signing

This stage is ready to commence when you are happy with the paperwork and you are ready to sign and a completion date is then decided amongst all parties involved in the transaction. This stage in the conveyancing process is where you will transfer the deposit that allows us to arrange the exchange of contracts.

 

Step 7 – Exchange of contracts

The completion date and the property transaction at this stage becomes legally binding once the contracts have been exchanged. The despots will be sent to the seller’s solicitor/conveyancer and your mortgage advance will be paid by your lender.

 

Step 8 –Buying a house

This is the final stage where the full purchase price is transferred to the seller’s solicitor/conveyancer. The keys are normally left with the party selling the house (Estate Agent) and once the seller’s solicitor has received the funds the keys are released to you.

What will happen to property prices in the UK

The big question is, what’s next for house prices in the UK?

Even though prices rocketed in the middle of the last decade, questions hang on the future gains.

 UK property prices in the last decade is

House prices increased by 33.7% on average across Britain.

House prices are forecast to rise by an average of 15.3% over the next five years.

 

We are a Nation obsessed with house prices

The housing market is such a common topic with aspiring home-buyers and owners. However, it’s been roller coaster ride over the last decade and in 2010’s we saw small growth at a national level after the financial crisis. The slowdown was mainly coursed by uncertainty from the European Union referendum result and Brexit vote.

Across London and South East saw the strongest results after the financial crisis, but across the Midlands, North and regional cities didn’t get the strong mid-decade rises however continue to pro-form well this year.

The next questions for both sellers and buyers in the UK

What will the next decade hold for property prices in the UK and what do they want?

Rising house prices benefit existing owners on paper, however it does make it more difficult for them to move up the ladder.

On the flip side a lower house price inflation or even prices falling will make life easier for first-time buyers, however, can affect banks and building societies willingness to lend and existing owners’ desire and ability to sell.

Over the last 10 years since 2010 we have been through a decade of austerity and seen ten housing ministers come and go. Even though the housing market forecast is modest but not spectacular as buyers find it difficult with high prices but can take advantage of rising wages and rock-bottom mortgage deals.

Does this mean things are looking up for the next decade? Or will Brexit continue to put the stabilisers on the property market?

Historic data and  housing market forecast for 2020 

The average house price in the UK was £232,944 after October last year.

The average price of a home will rise by 2% over the next year, with northern regions performing more strongly than those further south, according to predictions from the UK’s biggest property website.

A panel of expects see asking prices rise by 2% on average in 2020 and that the election result could pave the way for increased housing market activity this coming spring.

Experts’ 2020 UK house price predictions.

Andrew Montlake, mortgage broker Coreco: 2% to 3% rise

Miles Shipside, property portal Rightmove: 2% rise

Richard Donnell, property portal Zoopla: 2% rise in prices

Andrew Burrell, Capital Economics: 1.5% rise

Simon Rubinsohn, Royal Institution of Chartered Surveyors: 2% rise

Russell Galley, mortgage lender the Halifax: 1% to 3% rise

Henry Pryor, housing market commentator: 2% fall

 

Free Conveyancing Quotation: Buying, Selling or Remortgaging Property

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My Conveyancing Specialist offer a no hassle, no commitment conveyancing quotation. Whether you are buying or selling a property, we have the best Property Solicitors for your area. Our online quote form will save you time and money. Simply click on the link below:

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If you are selling, buying or remortgaging your house in the United Kingdom, you can count on My Conveyancing Specialist to offer you for a fixed fee quotation from one of our expert property solicitors. Our free quotations will be fully itemized and guaranteed to be a fix fee, no hidden costs. So don’t wait, get an instant fully detailed exclusive quote for your move. In just click you can calculate purchase and selling pricing fees.

 

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Section 42 Notice – What is it and the Lease Extension Process

Everything You Need to Know About Section 42 Notice

Subject to meeting specific eligibility criteria, the law provides leaseholders with a right to have their lease extended. This right is stipulated in the Leasehold Reform, Housing, and Urban Development Act of 1993, allowing the leaseholder to have a 90-year extension on their lease. To initiate the statutory leasehold extension process, a notice must be served on the freeholder or landlord. This Notice is commonly known as Section 42 Notice or the Tenant’s Notice. This guide highlights everything that you should know about Section 42 Notice.

Section 42
Section 42

Defining Section 42 Notice

A Section 42 Notice is a request formally served to a freeholder from a leaseholder. In addition to an entitlement to a 90-year lease extension, the ground rent is reduced to a peppercorn. Peppercorn rent refers to a small amount paid by a leaseholder to satisfy legal agreement between them and the freeholder. The Notice also outlines a proposed premium for the allowance of the lease extension. Within two months of serving a Section 42 Notice, the freeholder or landlord will respond through a Counter Notice. A Counter Notice shows the freeholder’s acceptance or rejection of the lease extension.

It is worth noting that not every tenant is legally permitted to serve a Section 42 Notice. You can only serve a freeholder with a Section 42 Notice if you are eligible for a lease extension.

Eligibility to Serve Section 42 Notice

A freeholder cannot reject a served Section 42 Notice provided the leaseholder is eligible for the formal lease extension. They may, however, reject the Notice on the basis of the premium offered or if the leasehold is not eligible for the lease extension. You are qualified to serve a freeholder with a Section 42 Notice if;

  • You have owned the property for at least two years.
  • The term of the initial lease granted extended to over 21 years.
  • The property for which you are seeking a lease extension is not commercial or business property.
  • The flat under the lease is not a function of a charitable housing trust.

Contents of a Section 42 Notice

The contents of the Tenant’s Notice are stipulated in the Leasehold Reform, Housing, and Urban Development Act of 1993. In accordance to this Act, Section 42 Notice contains the following elements;

  • The tenant’s full name and address of the flat or property for which they seek lease extension.
  • Identity of the property in question through sufficient provision of its particulars.
  • The particulars of the tenant’s initial lease. These include the commencement date of the lease, the terms around the lease, the lease term, and the date the lease term started.
  • The proposed premium payable to the freeholder in respect of granting lease extension for the property in question.
  • The proposed terms by the tenant on the suggested lease extension.
  • Details of the solicitor appointed to act on behalf of the tenant, including the name and address in England and Wales through which future notices may be served.
  • The date the tenant desires to have the landlord or freeholder serve a Section 45 Counter Notice in response to the Section 42 Notice. This date must, however, be above the 2-month threshold required in servicing of a Counter Notice.

About the Section 45 Counter Notice

While the Section 42 Tenant’s Notice serves as the initiating document of the lease extension process, it is the Freeholder’s Counter Notice that determines the progress of the extension. Once served with a Section 42 Notice, the freeholder responds through the Counter Notice in either of the following ways;

  • Accepting the lease extension request and consenting to your terms.
  • Accepting your lease extension request but with the condition that you agree to alternative terms.
  • Reject your request on the grounds of the landlord’s claim to redevelop the flat.
  • Reject your request on the grounds of ineligibility to statutory requirements of a lease extension or faults found in your Section 42 Notice.

It is rare to have a freeholder reject the Tenant’s Notice. This is because rejecting a Section 42 Notice might lead the landlord into severe legal consequences. These may include order by a court to agree with the leaseholder’s terms or even losing control over the premium proposed on the lease extension. Often, when a freeholder accepts the request on condition that you agree to new terms, it is a way to create a window for negotiations.

Section 42 Notice is a significant document when it comes to lease extensions. Any fault found on it, therefore, can be a basis for its dismissal in a court of law. When your Section 42 Notice has been dismissed in court, it means that your request for lease extension has been brought to a halt. The worse consequence of a rejected Section 42 Notice is that you cannot make any other application for a lease extension for the next one year. This is why you should consider hiring a professional lease extension solicitor.

Benefits of Hiring a Solicitor to Serve Your Section 42 Notice

It is possible to serve a Section 42 Notice by yourself. However, getting a helping hand from an expert solicitor comes with numerous benefits, including;

  • Experience and Expertise

Serving a Section 42 Notice that is incomplete and inaccurate is one of the reasons why the Notice can be dismissed in court. Lease extension solicitors have experience in serving numerous notices for different clients. They are, therefore, familiar with the common loopholes and faults that may lead to the rejection of a notice. With a solicitor, you can be sure that your Section 42 Notice will be served flawless. And the likelihood of the lease extension being granted by the freehold is also high, due to the legal participation and negotiating skills of a solicitor

  • Notice Follow Up

Solicitors will help you follow up on the freeholder’s Counter Notice. In case the freeholder fails to serve a Counter Notice, solicitors will offer you guidance on the best course of action to take.

  • Legal Advice

Serving a Section 42 Notice is a statutory procedure in its entirety. A lease extension solicitor provides you with legal guidance and support necessary when serving the Tenant’s Notice. They will clearly explain the legal procedure for serving the Notice and advise you on all the details that should be in the section 42 notice before you can finally serve it to the freehold.

  • Negotiations

In addition to helping you prepare the necessary documents for a lease extension, solicitors also assist you in negotiating with a freeholder on the premium for the extended lease. They will be beneficial in turning the negotiation terms to your advantage. You may end up with a better deal from the section 42 notice when you let a solicitor take over the negotiations.

The Process of Serving a Section 42 Notice

Here is a step-by-step guide on the process of serving a Section 42 Notice;

  1. Lease Premium Valuation

Premium valuation is the process of establishing how much you will pay a freeholder for the lease extension. A Section 42 Notice should contain information on your proposed lease extension premium. The valuation of this premium should be established by an RICS valuer who is licensed to venture into this field. Valuers from the Royal Institution of Chartered Surveyors (RICS) are experts in estimating the cost of a lease for an extended period. The value of your premium should not be too low. A low premium valuation forms a basis to have your Notice rejected by the freeholder.

Hiring an RICS valuer is essential for the following reasons;

  • They will help you know the right premium to feature in the Tenant’s Notice.
  • They help you to establish the potential of a premium in all circumstances.
  • The valuer will assist you in responding to the freeholder’s Counter Notice.
  • The valuer offers guidance during negotiations with the freeholder on the payable premium.
  • They will advise you on the state of a property and how that state is likely to affect its future service charges.
  1. Check Whether You Can Afford the Proposed Premium

You will be required to pay the freeholder a premium as compensation for lease extension and loss of ground rent income. You should, therefore, evaluate the premium valuation highlighted by your valuer to establish whether you can afford to make such a payment. Once you ascertain that you can afford the premium, you can now hire a solicitor for support in serving your Notice.

 

  1. Hire a Solicitor

A professional solicitor will help in handling the rest of the phases of serving a Section 42 Notice, including the following;

  • Obtaining the relevant information to prove identity, address, and financial capacity to fund the premium.
  • Obtaining a copy of your lease.
  • Verifying your eligibility to apply for a lease extension.
  • Getting the home address of the freeholder or landlord.
  • Liaise with your freeholder to evaluate your reasons for a formal lease extension.
  • Obtain details of the freeholder’s solicitor.
  1. Section 42 Notice Drafting

Your solicitor will also assist you in drafting a Section 42 Notice. The draft must contain all the elements as required by the Leasehold Reform, Housing, and Urban Development Act of 1993. Once they are done with drafting the Notice, you will be required to sign it in the presence of a signature.

  1. Serving the Notice

Once the Section 42 Notice has been drafted and signed, it is ready to be served to the freeholder’s address. This should be done by your solicitor through a special delivery or a courier. This is to ensure that the Notice has been received and signed by the freeholder. It is important to note that the cost of delivering the Notice is on you. The landlord may also require you to send the evidence of your eligibility for the lease extension.

In case you are unable to find the freeholder’s home address, you can request their last known address from the Land Registry at a fee of £3. If the freeholder cannot be located (an absent freeholder), you can apply to a court for a Vesting Order. The vesting order allows you to serve the Section 42 Notice to the court (on behalf of the freeholder).

What Next After Serving a Section 42 Notice?

Once you have served the Tenant’s Notice on the freeholder’s address and they have acknowledged receipt, the landlord has two months to respond to your request. The response is captured in the Counter Notice with the landlord showing their interest or disinterest in the request. If the freeholder has rejected your Notice without any grounds, then you are legally entitled to make an application to a court for a Vesting Order.

If the landlord approves your Tenant’s Notice and the necessary negotiations finalised, your solicitor will assist in registering the Section 42 Notice at the Land Registry. You will, however, be required to settle some financial obligations, including premium for the new lease, professional fees, ground rent, stamp duty, and other service charges.

Section 42 Notice Time Limits

  • Issuance of the Section 45 Counter Notice

The freeholder is required by law to take at least two months before issuing their response to the Tenant’s Notice. Their response should be a formal document referred to as a Section 45 Counter Notice. In this document, the freehold should clearly outline that they have accepted the terms for a lease extension, or they decline the lease extension request. Should they reject the section 42 notice from the leasehold, they should also state in the counter notice all the valid reasons for the rejection as allowed by the law.

  • Confirmation of Eligibility

The landlord may request proof of eligibility to lease extension. They, however, have only 21 days to request for this confirmation. The leaseholder is then allowed to reply to this request within 21 days.

  • Inspection Notice

The freeholder has the right to inspect the property in question to establish its value. This process is, however, subject to a 3-day notice, and should be done in writing.

  • Rejection of Tenant’s Notice

The freeholder has at least two months and at most six months to give reasons for the rejection of your Section 42 Notice. The reasons stated in the rejection document should, however, be valid enough for the lease extension request to be dismissed.

Section 42 Notice Fees

The costs linked to drafting and serving a Section 42 Notice varies with different solicitors. Here are some estimated costs to assist you in your conveyancing budget.

  • Lease Extension Valuation Using a Qualified Valuer – £500 to £1000
  • Leaseholder’s Solicitors Fee – £500 to £800
  • Online ID Fee Per Person – £8
  • Freeholder’s Solicitors Fee – £800 to £1500
  • Obtaining Copy of the Lease – £3
  • Register and Title Plan Copies Per Title – £6
  • Registering the Section 42 Notice at Land Registry – £20

You may also be required to make extra payments for services such as obtaining a Vesting Order, negotiations for the lease extension premium, and completion of the lease extension process. All the cost estimates highlighted here are tax inclusive.

Fensa Certificate – Do you need one when selling my house?

Selling a house can be stressful and exciting all at the same. It needs a lot of planning and research on the property markets to make a good decision regarding property selling. Whether you are a professional in this sector or a first-time seller, there are various crucial things you need to understand.

The most important and first things to confirm are the requirements of selling a home and where you stand when it comes to the Fensa certificate. If you have ever bought, sold or rented a house before, then a Fensa certificate is something you have encountered before.

What is a Fensa Certificate?

Fensa is an acronym that sounds so complicated to many people. In simple terms, it stands for the Fenestration Self-Assessment Scheme. It was established to follow up and make sure that the construction companies met the building regulations specifically those that deal with doors and windows installation.

Fensa came about as a result of the new building regulations that were introduced in the month of April 2002. The regulations required that the new double glazed windows, doors or roof lights should comply with them and also meet certain thermal performance standards.

To go deeper in the terms, the Fensa certificate can be technically defined as a “Competent person scheme”. This is because; the certificate is used to show that the installers of doors and windows are competent in their work and comply with the building requirements.

Besides Fensa, the local authority building controls can also assess and certify new doors and windows installation. Fensa gives the property owner the certificate as well as register the assessed installation to the local authorities on behalf of the property owner. This certificate serves the owner as long as the doors and windows last. Fensa installers offer an insurance backed guarantee of up to 10 years meaning that it can also stand as an evidence guarantee to the property owner.

Why do you need a Fensa Certificate?

It is not just okay to have a Fensa certificate; it is very important to have it. Having one means that you are working with a company of professional installers that have met the required legal requirements necessary to protect you.

Keep in mind that having a Fensa certificate means that you are asking for that professional doors and windows installer, an installer who complies with the building regulations, register the installation as a result and get a warranty with insurance on top.

How to get a Fensa Certificate.

Doors and windows installers should provide the homeowner with a copy of the Fensa certificate assuming they were/are members of the scheme. In case they never issued one or might have gotten lost, a Fensa certificate can be obtained from Fensa’s website at a small cost.

You can also check for free from the site whether a house you are buying or selling has a Fensa certificate. You only need to provide the house number and the postcode to run this check.

What does the Fensa certificate have to do with buying and selling a house?

When it comes to buying and selling of property, there are a number of questions asked by the conveyancers through a standard inquiry form. The answers to these questions are then used to determine whether everything is in order and identify any associated problems.

One of these questions relates to any new windows installed or replaced since the year 2002. If there is any then the owner is required to attach the Fensa certificate to support this. It is necessary to attach any other equivalent certificates. The process will be smoother when these certificates are provided compared to when they are not. The sales processes in the absence of a Fensa certificate may take longer as the conveyancers do further inquiries.

What exactly happens when you do not have a Fensa Certificate?

 

The following are reasons why a home could be missing a Fensa certificate:

  1. If the doors and windows installation was done before 1st April 2002. It also applies if doors and windows were ordered before 1st April 2002 but installation completed by 30th June the same year. In such cases, you do not need a Fensa certificate to show building regulations compliance.
  2. The doors and windows installed after 1st April 2002, the options could be:

o The doors and windows were certified by a different scheme

o The doors and windows were certified directly by the building control officers

o The doors and windows were not certified at all

In such cases, it means that the installations were done by an installer, DIY householder or a builder who never bothered to certify his/her work.

Are there possible solutions to not having a Fensa certificate?

 

Not having a Fensa certificate at hand does not mean that your property becomes unsaleable. There are solutions to that which include:

  • Have a building control officer visit your home and certify the installation assuming that everything meets the standard requirements. In this event, expect a fee to be charged.
  • The conveyancer involved can check with the local authority through the search results that will be done as part of the transaction. The search can show all the details of installation including if the certification was done, how and by whom.
  • The property buyer can obtain indemnity insurance from an established insurance company. The insurance should cover the costs involved in a case enforcement action is taken towards installations that never complied with the building regulations.

It is not an offense to buy or sell a home that is non-compliant with the building regulations. Even if it is not a crime, the people involved in doing the work can face problems if the installation does not comply with Building Regs. The owner can also receive an enforcement notice from the local authority ordering him to fix any non-compliant work done. In other cases, the local authorities fix the problems themselves and make the owner pay for it.

How do you get a competent installer?

If you are building a new house and you are looking for a competent installer to fix the doors and windows, you can get them from the Fensa’s website at https://www.fensa.org.uk/glazing-installer-search. It is also advisable to get recommendations from family and friends or other people in your circle. Ask them about their satisfaction with the work done and if the installers they are recommending have Fensa certificates. You could also seek references from the installer (previous customers), talk to them and have them explain to you the scheme they use to certify their jobs.

Always keep in mind that cheap is not the best and good installers are always on demand. Make sure you get at least three quotations from different companies or persons and compare them as you do your research about them.

Before you sign a contract with the installer, check their warranty and ensure that they have enough insurance coverage. Local installers who are registered by a competent scheme like Fensa are required to provide warranty insurance to cover their work in case the scheme stops operating within the warranty period.

Make sure you obtain the quotes, the timeframe for the work and any agreement that they will provide Fensa certificate all in writing. The contract should be clear and done in writing with the set completion time to avoid confusion that might arise later.

If the company asks for a deposit, make sure they offer indemnity for the deposit and a valid receipt of the deposit. Be careful not to exceed the value of the indemnity of the installers deposit insurance. If possible, do not give any cash upfront unless you have deposit protection insurance. Otherwise, you will face a lot of problems recovering the money in case problems arise later on. If you have to make the payment upfront, make sure you use a credit card. This will help you when claiming if anything goes wrong.

In Summary

Getting an installer registered with Fensa is very important. The certification assures you that you are working with professionals who have met the building regulations. Make sure you check the following three things or use a professional to help you out.

  • The installer has Fensa certificate as an assurance that they comply with the necessary regulations
  • Fensa certificate also assures you that the installations will be registered with the local council.
  • Verify that the Installers’ warranty is insured in case anything goes wrong thereafter.
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Does a Valuation Mean Mortgage is Approved?

Nothing beats the feeling of moving to your dream property. However, buying a new house can be an overwhelming financial experience; keeping in mind that this could be one of the most expensive purchases one would ever have to make. It can trigger a lot of anxiety, having to wait for your mortgage to be approved. Different lenders vary in their mortgage approval process, and not every lender will approve a mortgage subject to valuation. So how exactly do you know that your mortgage has been approved? Here is an overview of the basic steps in the mortgage approval process, from rolling out an application to closing.

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1. Pre-application and Application
Before making any mortgage application, it is crucial to ascertain that your financial status is appealing to lenders. Lenders are likely to have issues with your application if you have a bad credit score. Approach the credit referencing agencies responsible for compilation of your credit report and update your credit score where need be. Once you have established the type of mortgage you want, you can identify a potential lender whom we will assist you to approach for an Agreement in Principle (AIP).

An AIP, also known as Decision in Principle, is an agreement by a lender to lend you a mortgage. However, the agreement is ‘in principle’, meaning that it is subject to some assessment and approval of the house you intend to purchase. Once we have secured an AIP with your preferred lender, you can initiate a formal mortgage application. Supporting documents such as bank statements and payslips may be required before placing an application.

Identifying the Right Mortgage Lender
With the increased regulations in mortgage-lending criteria, getting your mortgage approved is likely to bump into a myriad of complexities. Most mortgage lenders are now focused on providing mortgage loans to specific customers. To get the right mortgage lender for your situation, you will need to put into account several factors, including;
• Checks on credit scores. If you have an unfavourable credit score, then you will need a lender that is not strict on their checks on credit scores.
• Mortgage rates. An ideal mortgage lender will not charge mortgage rates above the market rates.
• Loan facilities and fees.
• Lender’s reputation.

2. Assessment
Once your mortgage application has been submitted, the lender will assess and underwrite it further. Several factors are evaluated to determine your capacity to repay your mortgage. The assessment process involves scrutiny and checks on documents submitted during the application. Some basic documents required during the application process include proof of identity documents such as an ID or Passport, proof of address documents such as utility bills, and proof of your income and expenses. Some lenders will require more documents to support your financial capacity. These documents hold essential information, such as your work history, financial accounts, previous residences, borrowing history, payslips, and financial statements. Lenders will also carry out affordability assessmentsat this stage. This involves an evaluation of your net monthly income to determine whether you would still afford to repay your mortgage in the event of increased interest rates.

3. Valuation
A mortgage valuation is a survey launched by the lender to establish the validity and value of the property you want to buy. In addition to checking the price of the property, valuation also seeks to verify the value of similar properties within that region, possible defects likely to interfere with the property’s value, and the general condition of the house. If the house is in a condition against which the lender is unwilling to lend you a mortgage, your mortgage application might be rejected. Such circumstances would include;
• Overpriced value compared to the actual property value.
• Property located in a high-risk flood zone.
• Structural defects cited on the property.
• House situated above a commercial property such as restaurants or shops.

What Valuation Entails
Most lenders will appoint their surveyor who will is obliged to carry out a valuation on the property that you intend to buy. Once the surveyor is done with undertaking property valuation, they compile their findings into a 2 to 3-pages report. The valuation process is to the advantage of the lender and not the client applying for a mortgage. Most lenders, therefore, might be discreet in revealing the findings of the report to the client in question. While some lenders will not charge you for the valuation process, most of them will require you to pay a valuation fee when filing a mortgage application. Your mortgage adviser will guide you on possible mortgage fees before making an application to eliminate unnecessary surprises.

Survey Options
When you need a more detailed survey in addition to a mortgage valuation, here are some three more options;

  • Homebuyer Report
    This is a detailed survey outlining structural defects of the property you intend to buy. However, this report does not provide details of the property beyond floorboards and the property walls.
  • Building Survey
    This is a more comprehensive survey compared to the homebuyer report. It outlines the condition of the property, looking into both interior and exterior defects. This survey is ideal for an older property or one with more structural problems.

• Full-building Survey
This is the most comprehensive survey that one can carry out. It provides you with an in-depth analysis of the property’s structural status, including defects, maintenance options, and repairs. The survey is ideal for larger houses, properties in poor conditions, or a house where you intend to make structural alterations.

4. Mortgage Offer
With a mortgage offer from your lender, you are almost done with having a mortgage with you. A mortgage offer implies that your lender is pleased to lend you the amount you requested. The offer is made by the lender based on your loan request, property value, and your mortgage product. At this point, your mortgage adviser or conveyancer will guide you on possible changes before accepting the offer. Most lenders assume that the use of a mortgage offer to complete a purchase of property is an implied acceptance of the offer.
You should keep in mind, however, that your lender cannot send you a mortgage offer if there are concerns with your valuation. The valuation report is the determining factor of whether the lender will be pleased to lend you the money you need.

5. Completion
Once you have accepted the offer, signing contracts and processing payments to your seller are the only activities left. Your solicitor and the seller’s solicitor will make arrangements on contract signing dates. Exchange and signing of contracts imply that you are legally bound to buy the property and make mortgage repayments. Your solicitor receives money and sends it to the seller’s solicitor for property payment. Once the seller has received their full payment, they hand over the property’s keys, and you become the official homeowner of that property.

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A step by step guide to the conveyancing process

You cannot buy your initial home, or any other residence without experiencing conveyancing, which is the legal process entailing the transfer of residential property ownership titles between people.

 

What is conveyancing?

The term conveyancing describes all the legal and management work related to transferring the ownership of land or structures from a one person to another.

The conveyancing process begins after you have had an offer approved on a residential or commercial property. It finishes once the last agreements have actually been authorised and also the money has actually been transferred to finish the acquisition.

 

Who should do my conveyancing?

You can hire a solicitor or an accredited conveyancer to do your conveyancing for you.

You may discover you can save money by going with an online conveyancer, which can cost as low as £600.

All solicitors are certified to carry out jobs of this kind, however not all are knowledgeable in it.

It could therefore prove beneficial to hire a solicitor that specialises in residential property transactions, or a dedicated certified conveyancer that just works with cases of this kind.

You may, however, discover that you need to select from a list of conveyancers accepted by your home loan lending institution, or pay a fee to go in other places.

 

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Just what will a solicitor/conveyancer provide for me?

One of the first things a solicitor or conveyancer will do when instructed is to carry out crucial searches with organisations such as local authorities as well as energy firms to make sure that there are no structure plans afoot as an example.

These searches will certainly also disclose if there are sewage systems running near to the home, if the area is categorised as a flooding risk and also whether it has any kind of monetary obligations hanging over it from previous residents.

They will certainly recommend you of any type of “incurred prices” such as stamp duty, examine the agreements formulated by the vendor’s lawyer or conveyancer, which sets out vital information such as the sale price and the home borders and also communicate with your home loan lending institution to ensure it has all the information it requires to continue.

As soon as the process is at an end, they will likewise pay all the related costs in place (with money you have actually moved to the firm account) and also register you as the new proprietors of the building with the Land Registry.

 

How much will it cost?

The price of conveyancing normally depends on the worth of the home you are purchasing, although there is not always anymore legal work associated with getting a £3 million property than there is with a £100,000 flat acquisition.

Nonetheless, the conveyancing needed for a residential property acquisition normally costs around £800.

This quantity consists of the costs for the conveyancer’s time, calls as well as letters, in addition to the fees for the council searches as well as enrollment with the Land Registry.

You may discover you can conserve cash by going with an online conveyancer, some of which fee as low as £600.

Nevertheless, if you are worried about your buyer dropping out of the sale, for instance, it might be more settling to pay a bit extra for a no-completion, no-fee service that means you owe nothing if the offer falls through.

Some solicitors will also permit you to agree a cost upfront. If areas of the transaction end up being more complex, you may need to pay extra.

 

Can I do my very own conveyancing?

DIY-conveyancing is possible. Nevertheless, it is a difficult as well as lengthy that could end in disaster if you fail to spot things a competent solicitor/conveyancer would. There is also other things that may arise such as a boundary conflict, as an example.

In certain cases, vendors do not also have the lawful right to undergo the legal work for the property they are selling, which could lead to a house-buying problem.

Another valid point, many home mortgage loan providers will demand utilising a solicitor or conveyancer to protect their interests. The huge bulk of home purchasers are far better off with a specialist, especially when they are acquiring a home for the first time.

 

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Can You Put an Offer on a House that is Sold Subject to Contract?

In short Yes you can put offer in, but unless it is significantly more than the current offer they are unlikely to except.

A house being sold subject to a contract has its advantages and disadvantages. It might not be easy to conclude whether it is safe to put an offer on such a property. First, you should understand what a person means when they say a house is being sold subject to contract. The phrase means that while the house is on the market, the seller is still collecting offers from potential buyers.

If you place an offer in such a property, the seller can choose to accept or decline it. Still, since they are looking for the best deals, they might accept your offer now but end up turning it down a few days or weeks later when they get a better proposal. Having said that, if you feel that a property has the qualities that you want, and you need to put an offer, make sure that you do it wisely.

It is advisable to ensure that you talk to the agent or the owner of the home on sale and agree on specific terms. If they are impressed with your offer, you can ask them to remove the house from the market while you work on exchanging contracts. Usually, properties that are sold subject to contract take long on the market until the seller is convinced that they have received the best offer that the real estate industry can provide.

The Meaning of Under Offer

This is a term that is usually used by real estate agents to indicate that there is a buyer that has made an initial offer to the seller. During this stage, the seller is yet to make a decision whether they are still going to accept that particular offer. But they still keep the house in the market just in case they get something better from a different potential buyer. They can collect as many offers as possible before choosing one to go by. Before the seller accepts an offer, the property is said to be subject to contract.

The Meaning of Sold Subject to Contract

When a landed property is said to be sold subject to contract, this means that the buyer has provided an offer, and the seller has accepted it. However, the paperwork is yet to be complete. This could also imply that both the buyer and the seller are working toward the exchange of contracts.

This will, however, be determined by the results of the surveys, satisfactory contract, and mortgage approval. At this level, the final contract that is bound to make the process irreversible has not been arrived at or signed.

Meaning of Exchange of Contracts

The exchange of contracts is the level at which the deposit is made. This is usually around 10% of the total cost of the property, but it could be as low as 5%. In England, if the buyer withdraws after the exchange, they will be in breach of contracts and risk losing their deposit. That is a huge sum of money to lose, regardless of the price of the property being sold.

The process is usually different depending on the location and the law of the land. For instance, the term ‘sold subject to contract’ is unheard of in Scotland.

Is it Safe to Buy Property Being Sold Subject to Contract?

To be precise, the answer to this question is ‘no.’ If a property is being sold subject to contract, this means there is an informal agreement between the buyer and the seller. This means that you are not entirely safe. Though figures might vary, estimates suggest that more than 75% of such sales never go through.

Why a sale might not succeed

Many reasons might make such a sale to fail. For instance:

The seller might change their minds and remove the property from the market

Compared to the accepted offer, the mortgage valuation is a bit lower, hence the lender will be reluctant to offer the funds

The market might change drastically, hence making want to remove your offer

You are a buyer operating from a chain and things suddenly collapse, and you are unable to complete the process successfully

You might as well get gazumped

Meaning of Gazumping

As a buyer, it is important to know that when a property is sold subject to contract, the paperwork has not been completed, and the contracts are yet to be exchanged. This implies that there is nothing to keep other buyers from making inquiries about the same property. This also means that you risk being gazumped. This implies that another buyer comes with a higher offer, and then the seller accepts it despite having accepted your offer.

This is something that has been on the rise according to reports from relevant sources. The gazumping is not seen as illegal, but it is considered immoral. Buyers will not shy away from trying it, especially in situations where demand outstrips supply. Many sellers will always welcome new buyers hoping that they get higher offers compared to what they already have.

If you are the buyer, there is nothing you can do to save such a situation unless you want to submit a higher offer. But that depends on you making a higher offer to a seller who has already let you down once. If you are unwilling to do this, or you are not prepared, then you just count that you have lost the property and start looking again.

What You Stand to Lose

Normally, it can take up to two months to move into a house that is being sold subject to contract. It might even take longer than this. At this time, you need to arrange your mortgage, commission a survey, and instruct a solicitor. If the purchase does not go through, you will lose all the money spent on mortgage advisors, surveyors, and other services.

Now, to answer the question of whether you can put an offer to a house that is sold subject to contract. You can go ahead and do it. But you need to have in mind all the things that are mentioned in this piece. Regardless of the offer that you have placed, it is the buyer who decides whether the house becomes yours. If you place an offer and the seller accepts it, you should ensure that they remove the property from the market so that you are certain about the purchase. If the house is being sold by an organization, then you need to find out its reputation regarding the property being sold subject to contract before placing an offer.

The Final Thought

It is clear that you can put an offer on a house sold subject to contract. It is also clear that there are risks involved. You should understand why you should not rush to place your offer on such properties. If you like the property and you get gazumped, you might consider submitting a higher offer, but that still does not guarantee your success at securing that particular property. Most people trying to buy houses should check if the property is being sold subject to contract first and then learn the terms of sales before choosing to buy the homes. Once you have made an offer that the seller can’t decline, start working on documentation as soon as possible.

Is it a legal requirement to provide an electrical safety certificate?

If you have made any changes to any electrical work in a dwelling in England and Wales since 2005 you must meet Part P of the Building Regulations.

Part P states that any person carrying out electrical work in a dwelling has to ensure that reasonable provision has been made in the design and installation of the electrical installations in order to protect any person who may use, maintain or alter the electrical installation of the dwelling from fire, injury and electric shock.

The electrical safety certificate which can only be issued by a registered electrician is now mandatory for home owners and landlords who have any new electrical work carried out and includes switches, sockets, fuse boxes and any new or altered wiring circuits.

An electrical safety certificate is a declarative document that an installation is safe to have in use from the moment that it was put into service. It can only be issued by a registered electrician. The law made it mandatory for home owners to acquire safety certificates due to reports of a series of cases of fires that were found to have started due to irresponsible electrical installations. The safety of tenants in a residential building became the responsibility of the landlord.

The certificate recognises the inspection on the switches, fuse boxes and sockets. It also outlines the amount of work that ought to be put in when installing an electrical system in a residential area or even a private home.

Types of Electrical Safety Certificates

Electrical safety certificates come in two forms. Electrical Installation Certificates (EICs) and Minor Electrical Installation Works Certificates (MEIWCs), which provide you, the person responsible for the safety of an electrical installation, with a written declaration that the new electoral installation or alteration is safe to use at the time it was installed and put into service.

An Electrical Safety Certificate must be issued for all new electrical Installations. If no new circuit has been used then a Minor Electrical Installation Works Certificate (MEIWC) may be issued.

Electrical Safety in Rental Properties

If you are a landlord, unlike gas, there is no statutory requirement to have an annual safety check on electrical equipment, however it is advisable to do so to ensure safety, as you can still be held liable if things go wrong.

As a minimum you should carry out visual checks of all electrical appliances before a new tenant takes residence to ensure all cable and plugs are safe.

You should also ensure power circuits have a circuit breaker (RCD) fitted.

How to Acquire the Electrical Safety Certificate

The certificate is a requirement regardless of the size of an installation work; this means that even though the installation is for an oven, the law requires that there is an inspection on the condition of the oven and even the switches in which it is plugged. If the installation is up to code, then the registered electrician who carries out the installation recommends that an Electrical Safety Certificate is issued.

The Electrical Safety Certificate is issued to landlords or private home owners only after a certified electrical carries out he inspection on the electrical wiring of a building. Ensuring that the electrician who is taking care of your installation is licenced as per the UK law is also one of the requirements to meet in order to receive a certificate.

Contents of the Document

The registered electrician should also include a signature and date of completion of the installation job. In the new law, the Electrical Safety Council gave its input and recommended that the electrical safety inspections be conducted once in very ten years. However, since it revision, the new law will recommend that a thorough inspection be conducted twice within that time.

Cost of the Electrical Safety Certificate

Electrical Safety Certificates come at a price. The price is actually a fee for the inspection fee. It all depends on the type of home where the wiring is to be done. The cost goes from about £100 to £150 for a one bed room flat, a two bed room flat will cost you about £120 to £170 and a three bedroom flat will cost you about £180-£230. For a one or two bed room house the cost of inspection is about £150-£200 and for 3 or 4 bedroom house it will cost you £200-£250.A 5 bedroom house may cost you £300 or more. Issuance of the certificate is after a number of days and is often delivered by email. If you want it in document form, it will cost you an extra fee. All these charges are inclusive of tax.

Conclusion

Failure to comply with the law that requires one to ensure that their home is safe from electricity hazards leave them liable to a fine of £5000 or at risk of serving a six month sentence in prison. When accidents related to electricity occur, a landlord or home owner may be charged as a criminal.