Tips for Buyers

Howards has welcomed the Government's ‘mini-budget’, which will bring significant benefits to the housing market. On the 23rd September 2022, Chancellor Kwasi Kwarteng announced cuts to stamp duty in the government’s mini-budget, by increasing the amount at which buyers in England and Northern Ireland will begin paying duty from £125,000 to £250,000. For first-time buyers, this threshold is now £425,000 and discounted stamp duty will apply up to £625,000. What is stamp duty? When you purchase a property or land, you are required to pay a form of tax called ‘Stamp Duty Land Tax’ (SDLT). The amount you pay can depend on the price of the property, the location of the property, whether you’re a first-time buyer or if you’re a UK resident. Sign up today to be among the first to know about property for sale in your area. Stamp duty for first time buyers People buying their first property can often be put off by having to pay stamp duty on top of their deposit, as well other property purchase related fees like conveyancers, property searches, etc. To help first-time buyers, the government has raised the amount they can spend on a property without having to pay stamp duty. First time buyers will now not have to pay stamp duty if their first home costs less than £425,000, which is an increase of £125,000 on the previous level. However, if a first-time buyer does purchase a property that costs more that £425,000, they will be entitled to relief. This means first time buyers purchasing property above the new threshold will pay 5% stamp duty land tax on properties up to £625,000, which is an increase of £125,000 from the previous limit. What are the new stamp duty rates for first time buyers? If you’re buying your first property in England or Northern Ireland from 23rd September 2022, you’ll have to pay the following rates for stamp duty: Property Value  SDLT Rate £0 - £425,000 0% £425,001 - £625,000 5% £625,001 - £925,000 8% £925,001 - £1,500,000 10% £1,500,001+ 12% How does the 2022 stamp duty reform help? The new measures taken by the government will reduce the amount of stamp duty for all property purchases by up to £2,500, with first time buyers also now able to access up to £11,250 in relief. This reformed policy will be a welcome tax-cut for the majority of people purchasing a new (or first) property as they will be able to keep more of their money for additional house renovations or other expenses. This new tax cut will also help increase household purchases and in turn boost confidence in economic growth. What are the new stamp duty rates for non-first time buyers? If you’re not a first time buyer in England or Northern Ireland, from 23rd September 2022 you’ll have to pay the following rates of stamp duty: Property Value SDLT Rate £0 - £250,000 0% £250,001 - £925,000 5% £925,001 - £1,500,000 10% £1,500,001+ 12% Our Senior Team’s View Paul Smith, CEO Commenting on the mini-budget, CEO Paul Smith said: “I’m delighted that Liz Truss is following in the footsteps of Margaret Thatcher and understands the economy is fuelled by a healthy property market. “Thatcher once said that she wanted a capital-earning democracy, which housing was the start of, and if you’re a man or woman of property, you’ve got something.  “I absolutely agree, and clearly the new Prime Minister does, too. “This mini-budget from Chancellor Kwasi Kwarteng is revolutionary on stamp duty - cutting it permanently, and not just introducing a holiday with a spurious deadline, is a massive boost for the market. “This will give a massive confidence boost for those now wishing to sell. “I am also pleased to see that our hard-working colleagues will benefit from a cut in the basic rate of income tax to help them with the cost-of-living crisis – Howards is nothing without our brilliant people.” Antony Lark, Senior Managing Director Group Managing Director, Antony Lark welcomed the stamp duty changes. “This is an extremely positive move and will assist so many people in getting on the housing ladder,” he said. “The fact that this is a permanent change will help ensure we avoid the cliff edge type environment we have recently lived through. “Owning your own home is such an important aspiration for so many and it’s so positive to see the government look to support this to help grow the economy.” Tim Wardley, Managing Director of Land and New Homes Managing Director of Land and New Homes, Tim Wardley added that the 38 investment zones mooted in the so-called ‘Kwasi Budget’ will generate significant growth, thanks to business tax cuts and a fast track on planning applications. He said: “This is great news for our industry right across a board at a time the market has slowed. “The planning system is completely clogged up and anything which can get more houses built is a winner for everyone - buyers, people selling land and developers alike. “The stamp duty cut is also a game changer which begins now and carries on indefinitely, meaning no waiting for start dates or need to hit deadlines. “It’s now time for us to grab this opportunity and make the most of it.” Contact your local Howards branch If the latest stamp duty cuts have prompted you to take the next steps in your property journey, get in touch with your local Howards branch today and we’ll get the ball rolling. We can help you get on the property ladder, find your next home, or if you have a property to sell too, we can offer free no-obligation valuation.

Purchasing a new property can quickly become more expensive than originally expected. There are some costs which can be overlooked, which can add to the total costs and skew your budget. Former renters are often surprised at how much more it costs to buy a property and without the correct preparation, you might find it a difficult process. But that’s where Howards can help. This guide will take you through all the costs that come with buying property and help you to get your budget in perfect order. Sign up today to be among the first to know about property for sale in your area. Deposit This is the first thing you will save up for. It’s the amount of money that you will put towards the cost of the property and it averages from 5% to 20% of its price. For example, you might pay as little as £10k or as much as £40k on a £200k property. Getting this money together is you first step to being ready to find and purchase your home. Mortgage broker fees A mortgage broker is a financial adviser that specialises in mortgages. They will show you the best products (mortgages) available to you and they work for you, not the lender. This makes them a knowledgeable and trustworthy source of information. Some mortgage brokers don’t charge a fee, while others charge between a few hundred pounds or up to 1% of your mortgage. Looking for expert mortgage advice, speak to one of our Just Mortgages advisers to see what mortgage deals you could be eligible for. Conveyancing This is the name given to the legal procedure of buying a property. Conveyancing fees include search fees and joining the Land Registry. The Land Registry is a government department that keeps records of all registered properties in England and Wales. You can either hire a property solicitor or licensed conveyancer. The cost will depend on the value of the property you’re purchasing and what searches you’ve completed. Its costs can range from £800 - £1500 and are more for leasehold homes. Valuation fees Your mortgage lender will conduct a valuation survey. This doesn’t look at the condition of the property but is produced for the lender who wants to know the property is worth at least what they are lending you. Some lenders don’t charge a mortgage valuation fee but if they do, they are usually around £200. Surveys/valuations These can add up quickly, ranging from a couple hundred pounds to over £1,000, depending on the value of the property. Stamp duty This is the tax that is levied on legal documents and can add as much as 7% extra to the total cost of buying a property. First time buyers do not have to pay Stamp Duty on properties that are valued under £425,000 in England and Northern Ireland. This is slightly different in Scotland and Wales. For a full breakdown of Stamp Duty, visit gov.uk. Buildings Insurance This is an insurance policy that pays the cost of repair or rebuild in the event of your property being destroyed or damaged from things such as: subsidence falling trees fire, smoke, explosions car and lorry collisions water damage from leaking pipes This needs to be purchased before completion of your new property. The average cost of a policy (as of 2018) is £111 a year. Mortgage fees On top of your standard mortgage, there are other up-front mortgage fees that need to be considered: Arrangement fees: these are often charged by mortgage companies and range from just a few hundred pounds to 1% of the mortgage value. Some lenders prefer it being paid up front, others may add it to the mortgage. Be sure to check Indemnity fees: usually if you had a high loan-to-value ratio, the lender might charge a fee that covers the insurance they take out in case you can’t pay back your loan. Fortunately, many lenders won’t charge these fees even for those borrowing a hefty amount of the purchase price, even up to 90%. Transfer fees There is a fee for transferring the mortgage deposit from your lender (mortgage provider) to your solicitor. However, it’s usually no more than £50. Removals If you don’t have much furniture and have some generous friends, this can be done at little cost. If you do have a lot of furniture, hiring a removals firm is your best bet. It can be costly, but with the right research you can select a company that best meets your needs and budget. Check out our blog on selecting a removals firm for more advice on this. After the move Once you’re moved in to your new home, there are some ongoing costs to consider too: Insurance – to protect the contents of your home Council tax – an ongoing monthly payment that is determined by the location of your property Maintenance and repairs – Any work done will need to be budgeted for Utilities – these are your bills for energy, water etc. shop around for the best deals Leaseholder costs – if you purchase a leasehold property you may have to pay additional fees to maintain the grounds or external building. Not sure of the difference between leasehold and freehold property? Try Howard's jargon buster.These are some extra fees that might creep up on you: Mail redirection Starting at £33.99 for three months Child or pet care on moving day Around £50 Cleaning costs for previous property. This depends on the depth of the clean and size of the property, but can range from £120 - £250 Looking for your family’s next home? Howards invests in the people and technology to get you moved smarter and faster (and with more cash in your pocket when you have). Find your new home here. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Howards introduce to Just Mortgages Direct Limited which is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited, which is authorised and regulated by the Financial Conduct Authority. Just Mortgages Direct Limited Registered Office: Colwyn House, Sheepen Place, Colchester, Essex, CO3 3LD. Registered in England No. 2412345