Property Articles

The Government has come up with some new proposal of reforms for the HIPs. It also clarified the mandatory contents and the introduction deadline.

From the 1st of June 2007 in England and Wales, legally the sellers of residential property or their estate agents will be required to have a Home Information Pack before putting it up for sale.

The latest information we, at Appletons, have received from the Government indicates that the following documents have to be present in the HIP:

• An index (i.e. a list of the contents of the Pack)
• A sale statement (summarising terms of sale)
• Evidence of title
• Standard searches (i.e. local authority enquiries and a drainage and water search)
• An Energy Performance Certificate
• Where appropriate, commonhold information (including a copy of the commonhold community statement)
• Where appropriate, leasehold information (including a copy of the lease, information on service charges and insurance)
• Where appropriate, a New Homes Warranty
• Where appropriate, a report on a home that is not physically complete

Also all the searches and the Leasehold information have to be produced within 28 days of the property being marketed and there will be fines for marketing the property without the HIP.

For more information, please refer to the official information at www.homeinformationpacks.gov.uk.

Leasehold is a common type of property tenure in England where the ownership of a property is subject to lease from the freeholder. The freeholder is the legal owner of the land where the property is built upon.
Leasehold tends to be mostly applicable to flats or maisonettes rather than houses. The lease period is usually around 99 years or more in England.

Leasehold property is bought and sold on the market like any other property but there may be some extra paperwork to go through during the purchase.

Unlike a tenancy, the leaseholder has the right to occupy the property until the end of the lease period rather than having to periodically extend it (e.g. weekly, monthly).

Due to the growth of our business, at Appletons we are looking for a trainee lettings negotiator.

The Bank of England has decided to keep the interest rates unchanged at 5.25%. Although some analysts expected another rise this month, the Bank of England seems to be waiting to see the impact the recent rise before taking another action so soon.

Over the last 10-15 years, property investment has become a very popular investment method. Each day more people are investing in property as a vehicle to build wealth and secure their future. Buy-to-let is now even considered a legitimate pension investment.

The idea behind it is very straightforward. You make the initial investment in a property that somebody else lives in and pays you rent. In principle, you expect the rent to at least cover the mortgage payments. More importantly the property increases in value. A significant number of property investors have build sizeable buy-to-let property portfolios this way and it is well documented!

Some property investors have mentioned that over the last 100 years, the property prices have double every 10 years on average. And, this is the key expectation for their invesment. They don’t really expect to make much money out of the rent as long as it covers the mortgage.

There are 3 key areas for a successful property investment:

• finding the right property
• finding the right lender
• finding the right letting/property management agent

If you are looking to invest in property in Maidenhead, Marlow, Cookham and Reading areas, Appletons provide an exclusice investment property search service.

Getting started

The most important factor in which property you can is how much money you can borrow, so it is probably best to sort out the finances first.
Visit a mortgage broker, bank or building society. Ensure that you secure a “mortgage agreement in principle” before you even start looking at property.
Should you require help with a mortgage broker, Appleton Estates can refer you to trusted mortgage advisors to guide you through the entire financial process.

Remember the additional costs involved in the purchase:

• Solicitors fees (including stamp duty, local authority searches etc)
• Stamp Duty
  
• Deposit
• Surveyors fees
• Mortgage arrangement fees
• Building and house contents insurance
• Moving costs
• In some cases there may be additional maintenance fees for the property as well.

Doing your homework

Finding the type of property that interests you can be very time consuming. Especially if you have friends and family that are living in the area(s) you are interested in living, they can give you plenty of quality advice. Doing your homework can save you a lot of time and frustration during the viewing stage. Listing your exact requirements can help you only view properties that are really likely to be suitable for you. Here’re some points to consider before viewing a property:

• Location
• Type of property
• Age and style of property
• Are you willing to carry out repairs/modifications?
• Local amenities, schools
• Transport links

Also, viewing the properties on a high-tech website like ours via slide shows and 360-degree Virtual Tours will save you a lot of time.

---




Putting in an offer

Put in an offer as soon as you find a suitable property.

Remember! this is a negotiation process so don’t be afraid to offer below the asking price. The seller may consider lower offers.

It is very important to make an offer subject to survey and contract. This will allow you to withdraw if problems the survey or the contract highlights issues that you are not comfortable with.

Also, don’t be afraid of walking away from a property if you cannot afford it. Especially with the increasing mortgage rates in 2006-2007, you need to allow for mortgage rates going further up after your purchase.

---




Getting the property surveyed

A surveyor carries out certain checks on the property on behalf of the mortgage lender to identify any structural problems as well as advising on the property’s value. If the survey highlights any serious issues, you will have the chance to renegotiate the price of the house or perhaps some provisions to get these issues repaired.
Following three are the most widely-used types of survey:

• Mortgage valuation survey is carried out by the mortgage company to assess whether they are prepared to lend you money to buy the property. It is a brief report on the property, they can often lower the valuation by 15% of the asking price, this is because they are always more cautious, after all its their money that’s buying the property.
• Home-buyers survey is a more detailed report on the condition of the property.
• Full Structural or Building Survey is a very detailed report, it goes a few steps further than a home-buyers report and is recommended for a property that is particularly old.

The results of your survey may highlight problems with the property that require specialist quotes to be carried out, i.e. damp etc. This may lead to a price renegotiation. This can get fraught at times - we at Appleton Estates will always work and use our expertise to reach a mutually beneficial result.

---




Legal Side

Your will be handle all the legal paperwork during the purchase. Appletons advise you to use a professional who knows the local area and we can refer you to a trusted solicitor if you are not familiar with the area.


---

Exchanging Contracts

Once the survey, local authority search are completed and you are happy with the results, you need to instruct your solicitor to proceed immediately.
When all the conveyancing has been dealt with, your solicitor will send you various documents to sign. You’re one step closer to agreeing a Completion Date, which is when the property becomes yours.

You most probably have to pay a deposit (usually 10% of the house’s value) through your solicitor. If you pull out after this point you will lose the deposit!

---




Completion

This is the last stage of the whole process, which usually takes around 8 weeks from making an offer. The outstanding balance (remaining 90%) is gets paid at this stage after all the legal issues are sorted out. You can collect the keys from your estate agent for your new home.

Yesterday, the Bank of England raised the base interest rate to 5.25%.

One of the main reasons behind this move is alleged to be the expected continuation of the house prices increases in 2007.

This is the third rise in a row within 5 months.

However, the European Central Bank decided keep its rates flat at 3.5%.

Especially with the expansion of the European Union, whether the immigration is having any impact on the property market is a very popular discussion. Most experts argue that this is the case and they only dispute is how much.

Especially, in the Reading area we have seen an increased number of Polish tenants after the acceptance of Poland in to the EU. It is very likely that we will be seeing an increased numbers of tenants from Bulgaria and Romania in the upcoming months as well.

According to the Royal Institution of Chartered Surveyors (RICS), rents are rising at their fastest rate in 5-6 years, and landlords are trying to benefit from this by borrowing more than ever to buy new properties.

This is likely to boost the buy-to-let market in the Berkshire area.

Appleton team wishes you all a happy new year. We hope 2007 brings you health and happiness.

Property investors remain confident that the house prices will continue to rise in 2007 at a steady pace.

Nationwide Building Society’s recent forecast of 5% to 8% in the upcoming year is the main reason for this. Nationwide’s robust prediction is inline with similar projections from the Royal Institution of Chartered Surveyors.
Especially the property shortage in the South East is expected to be key for the Berkshire area.

The rising property prices are expected to make it even harder for the first time buyers to get on the property ladder.
The property investors should be even more careful in taking on oversized mortgages they cannot afford, or interest-only loans with no plan for repaying them.