Over 80 percent of people in the UK live in houses which is unusual for Europe. Ideally, most people have their own detached home with a garden and garage. Houses are also a better value than most apartments and hold better investment value. However, new homes tend to be getting smaller. New homes are a third smaller than 80 years ago.
The overall average for 2010 sales was 230,000 GBP.
A 2-bedroom detached home with garage and garden sold for about 350,000 GBP.
Semi-detached homes were sold for an average of 198,000 GBP.
The average flat price was 217,000 GBP.
It is important to note that though the basics are the same for the English and Scottish real estate markets, there are also some fundamental differences. These will be noted below.
How to Search for Real Estate
Properties in the UK range from semi-detached and detached houses to modern town houses to dilapidated country mansions and castles to chic city flats. The first step to a successful search is determining what you want. Make a comprehensive list of what you want, and don't want, in a home to make your search as efficient as possible. If what you want is not on the market, it is also possible to buy a plot and build the home of your dreams. This takes considerable funds, energy, and planning.
Online listings can give you a great feel for the market and allow you to determine if a place fits your specifications. Most sites allow you to set-up alerts to find the best property for you.
If looking for a historical home, Scotland historic homes would be your best resource.
Another great online resource is the UK classifieds on EasyExpat. You can also chat with other expats on the Scotland forum and receive advice.
Home and Property Magazines
UK Home and Property Magazines are valuable sources of info for new homes. They usually include a list of new developments throughout the country and advertisements for builders and developers.
Local newspapers are a good source of information about property prices, the type of property for sale and local agents. Most have a property section.
Many places have billboards offering advertisements for a variety of goods and services. Watch these boards for useful postings. Laundrettes, cafes, grocery stores, community centers, and bars all might have private ads.
Located mainly in Scotland, property shops are often run by solicitors. Glasgow Solicitors's Property Centre (GSPC) is Scotland's largest property guide. Edinburgh Property Shop is also useful.
Annual property shows are an excellent way to view what is on the market. they are also a great resource for advice on buying a home and those design, decor and furnishing options.
An estate agent can be a useful resource for finding the right place quickly. Also called home search consultants or buying agents, a good agent knows the legal pitfalls and has access to a variety of housing. An agent will provide you with a description of available properties, escort you to viewings, make sure your contract complies with expected standards.
How much you pay often depends on whether you choose to entrust your sale to one agent (sole agency) or spread it among several (multiple agency).
A sole agent is the usual, cheaper, option. A single agent should charge a percentage of the sale price, between 1-2 percent.
Multiple estate agents can offer broader exposure and possibly a quicker sale. Multiple agents typically charge from 2-3.5 percent
To find an agent, consult:
The National Association of Estate Agents
Arbon House 21 Jury Street, Warwick CV34 4EH
Tel. +44 (0) 1926 496800
Making an Offer
Buying property is one of the few times in the UK when you're expected to haggle over the price. Most homes sell at around 5 percent less than the original asking prices, with some places receiving a 10 percent reduction. Sellers generally presume buyers will haggle and rarely expect to receive the asking price. This applies equally to new and old properties.
Your solicitor will then normally organize a survey and valuation report once you have located a place of interest. It is possible to make an offer conditional on survey, but this is not a recommended route to follow at a closing date as this will make the offer unattractive to a seller.
To figure out an adequate price, calculate how much you can afford, how much competing interest there is in the property, prices recently paid for comparable properties (assuming that information is available), what you wish to include in the price, and your preferred date of entry (or completion). Location is the prime factor in determining value. Also consider the state of the property market (whether properties are selling fast or slowly) and the amount of work that needs to be done.
Another cost to consider is the running costs of the property.
This may include:
- Council tax
- Buildings insurance
- Contents insurance
- Mortgage protection insurance
- Standing charges for utilities (electricity, gas, telephone, water);
- General maintenance
Annual running costs usually average around 2 to 3 per cent of the cost of a property.
Before you sign any documents, including your contract with your realtor, have it looked over by a lawyer or advisor. It is extremely important that every element of a contract be understood before signing.
An offer should be made in writing with documentation of funding and legal arrangements. In Scotland, the contract takes the form of a series of letters known as "missives". Assuming your offer is accepted, the seller's solicitor will issue a qualified acceptance. This will come with a packet of property details including property titles, planning papers, specialist reports and property enquiry reports. Your solicitor will then have a number of working days to check through these and raise further queries as appropriate. At this stage, there is no legally binding contract in place between the seller and the purchaser, and it is open to either party to withdraw from discussions at any point, though this rarely happens.
Once the offer has been accepted on all points, you have entered into a legally binding arrangement and neither party can withdraw without potentially being held liable for the consequent losses of the other party. Accordingly, you should be careful and only submit a written offer through a Scottish solicitor who has your best interest at heart.
After your solicitor has carried out an inspection of the papers, he will provide a report to you with recommendations. Quite often, a contractual letter containing further qualifications is issued on your behalf by your solicitor. If the terms are acceptable to the seller, the seller's solicitor will issue a final formal letter, thereby concluding the contract. At this stage both parties are bound by the terms of the contract constituted by the offer, the qualified acceptance and subsequent formal letters. Between the conclusion of the contract and the settlement date, your solicitor will complete all necessary conveyancing formalities with the mortgage provider. In most cases, your solicitor will act for both you and the mortgage provider.
Scotland is unique in the UK in not having "gazumping". This practice refers to a seller accepting a verbal offer from one potential buyer, but then accepts a higher offer from someone else. It can also refer to the seller raising the asking price at the last minute, after previously verbally agreeing to a lower one. In either case, the original buyer is left in the lurch, and either has to offer a higher price or lose the purchase. Scotland buyers are spared this difficulty.
Luckily, Scotland is again not subject to a practice that is common in England and Wales. "The chain" is when a buyer or seller inexplicably pull out of a deal at any time before the exchange of contracts without penalty. In Scotland, once a bid has been accepted its legally binding. The actual signing of a contract is merely a formality at this point. It is at this stage that you should take out buildings insurance on a property, which is mandatory if you have a mortgage.
A deposit will be paid at the signing of contracts, usually about 10 percent of the agreed upon price. Cleared funds must be in the hands of your solicitor in advance of settlement. Often these funds will come from the mortgage provider, with the balance being provided by you. If you've got a mortgage, the money will be paid to your solicitor by your lender before completion, and will be sent by him to the vendors solicitor by bank telegraphic transfer on completion day. These funds have to be sufficient to cover all sums as per the state for settlement, which includes the purchase price, stamp duty (if applicable) and registration dues on the title.
Although property in the UK is expensive compared with many other European countries, the fees associated with the purchase of property are among the lowest in Europe and only add around 3 to 5 per cent to the cost. The average fees for a first-time buyer are around 6,000 GBP.
Most fees are calculated as a percentage of the cost of a property, therefore the more expensive a property, the higher the fees. Most of these fees are associated with a mortgage, so cash buyers incur much lower fees.
- Mortgage product fee: Mortgage deals generally have a product fee associated with them. It can be added to your mortgage amount but remember that interest will be charged.
- Mortgage account fee: This fee is to cover the setting up, routine maintenance and closing down of the mortgage account.
- Stamp Duty Land Tax: This is payable to the government on properties valued at 125,000 GBP or more. This is basically a property tax. Stamp duty isn't payable on "fixtures and fittings" (i.e. carpets, curtains, light fittings). The fee is calculated as a percentage of the purchase price. First-time buyers can now secure a two-year temporary stamp duty relief up to 250,000 GBP.
When the final payment has been made, the deeds to the property are handed over to the buyer's solicitor, including the conveyance or transfer of ownership. Your solicitor will also receive the keys. There are several other last steps:
- The conveyance stamped
- Pay the stamp duty on the property purchase to the Inland Revenue
- Register the transfer of ownership with the Land Registry
- Notify your lender that the sale has been completed and inform the insurance company
- Send the title deeds to your mortgage lender who holds them as security until the loan is paid off or the property is sold
Buying at auction is very exciting and can offer you a significant savings. Note that this buying method is not for novices as there are many pitfalls. These are usually properties that are difficult to sell and/or need serious renovation. If you are determined to buy through this method and are inexperienced, get the advice of professionals and preferably bring someone with experience. It is also advisable to attend a few auctions as an observer before placing a bid.
Auctions in the UK
Auction sales are popular in the UK and almost every weekend there is an auction somewhere. There are over 30,000 auction sales a year in the UK. December is one of the best times to buy at auction, as there is the least competition at this time.
When buying at auction you need to move fast. They are usually only advertised 3-6 weeks in advance. Bidders must provide their identity, so bring photo ID and your solicitor's details. When a bid is accepted, the property is legally yours and you must pay a deposit of around 10 per cent (in cash or by banker's draft). You have four weeks (20 working days) to pay in full. You should arrange buildings insurance immediately after the sale is completed.
Guide Prices and Reserve Prices
Guide prices tend to be deliberately conservative in order to attract as many prospective buyers as possible and the actual selling price is often much higher than the guide price. The guide price is different from the reserve price. The reserve price is the lowest price the seller is willing to accept. If no-one bids above the reserve price, a property will remain unsold. When bids pass the reserve price the auctioneer announces that a property is "on the market" and will be sold.
Scottish Auction Venues can help you find an auction in your area.