Low house prices and competitive mortgage rates mean it’s a great time to buy property, whether you are working your way onto the property ladder or expanding your existing portfolio. Terry from Carnabys will tell you that it is all too easy to overlook some of the legal issues which can turn your dream house into a bureaucratic nightmare.
You may have scrimped and saved for your deposit and agreed a great mortgage with your lender, but have you budgeted for the legal fees? It is wise to budget around 1-3% of the value of the house for legal fees, which can vary depending on the complexities of your contract. Furthermore, most law firms will (understandably) charge you for their time even if the sale does not go through.
Most savings accounts are still way below the rate of inflation, so it’s no surprise that many savers are choosing to invest in property in the hope of seeing better returns. However, there is more to being a landlord than simply changing the odd lightbulb. Rented homes must be up to a specific legal standard, and all your tenants must be legally allowed to reside in the country. And don’t forget to pay your taxes! You must report all income from property rental of more than £2,500 per year to HMRC.
Upgrading your home?
Adding an extension to your house can vastly increase its total value, but without proper due diligence, you risk having it torn down (at your expense!). Make sure you obtain planning permission from your local council before carrying out any work which will affect the size of your home. If you share a wall with another homeowner, review your party wall agreement with a solicitor and make sure your neighbour is aware of any disruption due to building works.