The Relocation Bureau

Housing

Our UK Information section on Housing aims to provide you with reliable and impartial advice on how to either rent, or purchase, a property in England, Wales and Northern Ireland. Note that property law is slightly different in Scotland; if you need specific advice please contact us. Whilst the use of the internet as a marketing tool has grown massively in the UK in the last ten years, that use is still relatively unsophisticated. We’ve seen significant growth in the number of competing property portals, some of which are great, with others less so. More recently, a group of prominent agents have set up their own property portal, escaping what they claim were high fees from a rival web site. Disappointingly, a large number of agents still use their internet listings as a way of getting people to contact, simply by featuring a lovely looking property that isn’t actually available!

RENTING IN THE UK

RENTING A ROOM IN A SHARED PROPERTY

If you think that maybe an apartment all to yourself is both excessive and a little expensive, then perhaps you would like to consider renting a room in shared accommodation. These are not normally available through letting agents so alternative sources must be used.

Looking for a room

The best place to start your search is the local newspaper as listings are regularly updated. Some local newspapers are free whilst others can be purchased at newsagents. These papers are published on a weekly basis, generally on a Friday.

Alternatively there are many house sharing websites on the internet. These vary in their usefulness and the services that they provide. Most of them require some form of registration. When registering it is worth considering how the website will use the contact details you provide. Many of them will email updates to you unless specifically told not to.

The two following links are to useful sites allowing you to search for room by area. Registration is needed to unlock all the features and contact the advertisers.

www.spareroom.co.uk
uk.easyroommate.com

Once basic details have been exchanged the next step is generally a face-to-face interview with the landlord. These will generally take place at evenings or weekends around the work schedule of those involved. Try to arrange the meeting at a time when you can meet all of the other occupants. It's important to get a feeling for the general atmosphere of the property and whether you are likely to get on with your fellow sharers.

Questions to ask

Below are some questions you may like to ask the current tenants or landlord. Not all of these questions will be appropriate for your situation, you may wish to just ask a few of these. Don't be afraid to ask about anything you feel is important, it is much easier to identify a potential problem at this stage rather at a later date when you may already have committed yourself.

  • Who owns the property?
    If the current tenants rent the property from a live-out landlord then check that the tenancy agreement allows for a change of tenant. This may be considered as sub-letting and can be specifically disallowed by some tenancy agreements.
  • Does the rental include utilities, council tax and phone bills?
    If these are not included, as is often the case with the telephone bill, how are these dealt with?
  • Does the property have a source of broadband internet and how can you access this?
    The majority of properties for rent in the UK will have an internet connection however it is important to understand how you can link your computer equipment to the service e.g. is the connection wired or wireless and is signal available in your bedroom?
  • Are any other household expenses shared?
    Some households will purchase basic groceries, such as milk or bread, or cleaning products as a group. This information can help you to budget for household expenses.
  • How are household tasks, such as cleaning, shared?
  • Is smoking allowed by the landlord/ current tenants and in what areas?
    Often smokers will agree not to smoke inside the property or in certain rooms as a courtesy to other tenants, even if smoking is allowed by the landlord.
  • What is the relationship with the landlord like?
    If the landlord/owner does not live in the property, it is useful to know what kind of relationship the current tenants have with him or her. Some landlords will deal directly and informally with tenants or alternatively there may be a management company to deal with any queries. Particularly important is ease of contact in the case of an emergency, for example a burst pipe or a broken washing machine, and the speed with which problems are resolved.
  • Are pets allowed by the landlord?
    Are there currently any pets at the property? Have pets previously lived at the property?
  • How do you like to socialise within and outside the house?
    If you are joining an established household it is useful to know if the current occupants socialise much within the flat, for example, is an average evening spent quietly watching television or should you expect lots of visitors. It is unlikely that other tenants will change the way they socialise to suit you so it is important to feel happy about this.
  • What are you looking for in a tenant/flatmate?
    Don't forget that this interview is a two-way process, both parties need to feel happy that they are suited to sharing so it is useful to know what the current occupants expect of you.
The next step

Once you have found a suitable place to live you will need to come to an agreement regarding the terms of your tenancy. Exactly how this is done varies greatly, from an informal spoken agreement to a signed tenancy agreement.

If you are happy to proceed without a tenancy agreement, make sure that you have discussed everything that you feel is important. Don't be afraid to ask for written clarification of key points if it makes you feel more secure. The most important terms to agree on are those regarding money and the length of your stay.

Deposits

It is standard practice to pay a deposit, which will generally be equivalent to about 4 weeks rent. This will be held as security and will not count towards your rent, you should receive this back at the end of your stay less any deductions for damage to the property during your occupancy. It is important to get a receipt for your deposit and are entitled to ask your landlord how the money will be held e.g. by the landlord in a separate account solely for deposits or by a third party. We would recommend that any deposit of over £200 be covered by a tenancy agreement in order to legally safeguard your money.

Rent

Many landlords will ask for the first month's rent to be paid upfront, alternatively they may ask you to set up a standing order so that money is transferred directly between bank accounts. Be sure to discuss this before you move in and agree a payment method acceptable to both parties.

Inventory

In order to safeguard your deposit it can be a good idea to ask the landlord to compile an inventory of the items in your room noting their condition as you move in to the property. This can be a simple one-page document signed by both you and the landlord. Should your landlord not wish to do this you may consider taking photographs of the room and making your own brief notes.

Ending your stay

You may have agreed a specific length of stay or be renting on a month-to-month basis however it is important to be clear about the notice required if you wish to leave the property. Be aware that either party may want to end the tenancy at some point in the future and agree terms for both sides. For example you may decide on a reciprocal notice period of 1 month to allow you to find a new property or the landlord to find a new tenant.

If you are asked to sign a tenancy agreement, make sure that you read it thoroughly and agree with all the terms it contains. Once you sign such a document it becomes legally binding so you may wish to take advice before you do so.

Hopefully at this point you will have agreed terms and be ready to move into your new home. Enjoy!

RENTING A HOUSE OR APARTMENT

There is no central or multiple listing service in the UK, and so ideally you need to register your requirements with all the possible sources of rental property in your target area, and then build a shortlist of property that potentially meets your requirements. Here we look at some of the ways of getting the job done. Your tasks are:

  • Define your target search area
  • Register your requirements with as many property sources as possible
  • Build your property shortlist
  • View as many properties from the shortlist as you can so as to gain market knowledge and comparisons
  • Finalize your shortlist
Relocation Agents

Why not use a relocation specialist to help you? We'll do all the legwork of finding a house or apartment for you. We'll also negotiate the deal for you, sort out and agree the contract, and attend the check-in when the tenancy starts, as well as arrange for telephone service, and utility accounts set-up. Our service doesn't stop there! We can help you with everything to do with your move.

We provide a highly efficient and cost-effective service.

Letting Agents

There are many thousands of letting agents in all areas of the UK. Many are large companies, and have both sales and lettings operations, whilst others are small firms with only one office, who deal solely with lettings. If you're using our relocation service, we'll register your needs with every letting agent that covers your target area.

Please note that there are no licensing or professional qualifications required by UK law or government, and anyone, even with no experience, can set up as an estate agent, give advice, and accept moneys from people. Never sign a contract, or hand over money (even a deposit) without getting professional advice!

In order to help you to understand the rental market, let's split the letting agents into two groupings. The top letting agents are all members of a trade professional organisation known as ARLA, the Association of Residential Lettings Agents. The entry requirements for ARLA are reasonably strict and so, by definition, most ARLA members have been in the lettings business for many years. Most importantly, ARLA run a bonding scheme that protects a tenant against the loss of their security deposit should the agency cease trading. Many ARLA member companies are highly professional, and easy to do business with, but their charges to Landlords are quite high, and so many Landlords use cheaper ways of finding a Tenant.

A far larger number of agents are not members of ARLA, and they form our second grouping. Many of these companies are eligible for ARLA membership but choose not to join, whilst others are simply small firms run from residential, rather than office premises. Some are members of the smaller NAEA (National Association Of Estate Agents) Fidelity Bonding Scheme (but not all NAEA members are bonded!!). This sector of the market often charges lower commissions to Landlords, and so is a useful alternative source of good property. Whilst we have dealt quite successfully with a large number of non-ARLA agents and would recommend those particular firms, there are also a number of "here today, gone tomorrow" companies, often in the larger cities, with whom you should avoid doing business.

A relatively new setup claiming to offer "consumer protection" is NALS - the National Approved Letting Scheme, a collaboration between ARLA, the NAEA, and the RICS (Royal Institute Of Chartered Surveyors). It appears to be little more than marketing wheeze guaranteed ( in their own words) to offer its agent members "complete value for money" if they join. Watch this space!!

Be aware that letting agents represent the Landlord, and that they earn their living on a commission basis. Don't automatically believe what you're told about a neighbourhood, or a property, as advice can sometimes be biased in favour of getting you to do the deal!! Beware of agents who offer to "research the market for you" or who offer a "free relocation service" - there's no such thing as a free lunch, and agents will only ever show you property that they can make a commission on! "Caveat emptor" still applies!

Dealing Directly with the Landlord

Many Landlords advertise their property in newspapers and so avoid paying agent's commission. This can sometimes be a good source for small apartments and "flat-shares", particularly if you are on a tight budget, but there are a number of traps for the unwary, and it can end up costing you more than going through a reputable letting agent.

If you're going to do a deal directly with a Landlord, then try to get the contract checked by a solicitor or other specialist. If possible, get a third party such as a solicitor to hold any security deposit as stakeholder in a separate account. Make sure that a proper inventory and schedule of condition is done when the tenancy starts, and avoid paying too much rent up-front. Its always a useful precaution to credit check Landlords - we subscribe to Experian for just this purpose! Beware of Landlords who might live abroad - you could end up paying their tax bill for them if you pay the rent without first deducting tax!

Because of all the possible pitfalls, we recommend that you avoid direct deals with Landlords unless we are involved in setting the tenancy up for you.

Internet Property Search

The rental market now makes intensive use of both the internet and email as a marketing tool. Some agents have very good web sites that are updated daily, and that contain fair and accurate property descriptions. However, a disappointingly large number of agents don't update their web sites frequently enough, or have inaccurate descriptions of properties.

Beware of agents whose web sites contain properties that, when you call the agent, have "just gone under offer, but I've got something just as good that would suit you!". The property that you looked at on the web probably went weeks or even months ago, and is just being used to fill space and draw you in!

The web is a good way to get started and to get a feel for prices, but you can't beat specialist advice and local knowledge.

Viewing Properties

You need to make viewing appointments for your shortlisted properties. In a typical day of accompanied viewings in Central London, we can usually manage to see about fifteen properties. Try to see properties during daylight hours. If viewing through an agent, remember that many agents in Central London are closed all weekend. Outside London, many letting agents only work Saturday morning.

The asking rent is usually quoted per week inside the London M25 ring, and per calendar month elsewhere. The asking rent does not normally include utilities, or the local property tax, called Council Tax. When viewing a property, it's important to remember that everything (not just the price!) may be negotiable, so if you like the property but would want a carpet replaced or a room repainted, then make a note, as these changes can form part of the negotiations.

You may see a large number of properties during a day's viewings, so it's important to make notes on each property when you see it, and whilst it is still freshly in your mind, so that you can later easily remember which properties you liked. You'll find that you can dismiss some of the choices immediately, and that the main problem is grading the rest into your personal shortlist.

If you are having difficulty deciding between properties, you may wish to consider the relative running costs for gas and/or electricity. In order to help you to do this, every property currently on the rental market must have an EPC or energy performance certificate. Each property is tested for its energy efficiency using the same set of criteria which allow you to compare different properties. The result of this test is a certificate giving the property a grade between A and G with A being the best and G the worst. In a more energy efficient home, less of the money you spend on gas and electricity is wasted through heat loss and inefficiency, although of course an A graded one-bedroom property will cost less to run than an A graded five-bedroom property. The letting agent should have this information with them at the viewing however if it is not given to you don't be shy about asking!

If possible, it helps to end up with both a first, and a second choice just in case you are unable to proceed with your first choice for any reason.

FINALISING THE DEAL

This section deals with how to put together a deal on your chosen property. There are a number of things that you need to get done BEFORE you make an offer on a property, and these are listed as follows:

  • Who's The Tenant?
    Will it be a private or a company let?
  • Bank Account
    If you are going to be the Tenant, then make sure that you open a UK bank account as soon as possible. Check out our section on Banking & Finance for account opening information.
  • References
    Obtain all the contact information necessary before you make an offer for a property (see below).
  • Contracts
    If it will be a company let, check your company policy on legal review of the draft contract. If they need you to use a particular firm of solicitors or counsellors, then get their contact details.
  • Money
    If your money is not in the UK, make sure that you initiate a transfer as soon as possible so that you can pay the Agent's account. It can take seven to ten days to transfer funds from many countries!
Who Will Be The Tenant?

Your first step is to sort out who will be the Tenant of the property. You may enter into the contract yourself (a private let, and often an Assured Shorthold Tenancy), or alternatively your employer may wish to enter into the contract as the Tenant (a company let), in which case you will be listed on the contract as the "Approved Occupier". Expatriates should take advice on their tax position before committing to a particular tenancy.

References

The Landlord will require appropriate references on the Tenant. Normal practice where the Tenant is a company is to require the names of the Tenant's bankers, accountants and solicitors, plus an employer's reference on the proposed "Approved Occupier".

For a private Tenant, they will usually require your bank and employer's contact details, plus a personal reference from someone not related to you. If you have a previous Landlord who will provide a reference then this will also be most useful. Many Landlords will not accept foreign bank references, so you'll need to set up your UK bank account as soon as you start house hunting.

In each case, the Landlord or his Agent will write for a reference, and they must receive a satisfactory reply, indicating that the Tenant can afford to pay the agreed rent, and is of suitable stature or character.

Sort out the name, address and contact details for all your references BEFORE you make an offer for a property, as that way you'll appear organised and professional.

Making An Offer

When you have chosen your favourite property then you should make an offer to the Landlord or their letting agent. Most property prices are slightly negotiable. How negotiable can depend on how long the property has been on the market, whether you will be taking a company or private let (a company let is often preferred by Landlords), payment frequency and whether there are any jobs that you would like carried out at the property. Longer term rental contract offers can result in lower rents. If you have a "wish list" of improvements at the property, you should make these a part of the offer. In summary, you should:

  • Decide how much you're willing to pay and the payment frequency.
  • Know the length of contract you want and the planned start date.
  • Know who the tenant will be, and have appropriate reference contact information available.
  • Decide what options you might want to extend the contract, or to break it earlier than planned.
  • List any improvements or changes to the property that you require.

The deal that you agree has been negotiated "Subject To Contract", and is not binding on either party until contracts have been signed. Whilst this means that you are free to change your mind, it also means that the Landlord is free to accept alternative offers. A reputable agent will withdraw the property from the market whilst the deal is finalised, and as long as the potential tenant shows signs of proceeding, the property will not be re-offered on the market. Where the property is being offered by more than one agent, only the agent who makes the deal earns any commission, and so rival agents may try to persuade the Landlord to accept alternative offers. You should always try to finalise a contract as soon as possible, even though the tenancy may not start for several weeks.

When your offer is accepted, you may be asked for a "holding deposit" and / or monies to cover the cost of taking up references. A reputable agent will only ask for a small holding deposit of up to £250, and will set out in writing for you the terms on which the deposit is being taken, including what happens if you back out of the transaction. Never hand over large sums of cash as a "holding deposit".

The Rental Contract

The draft contract is normally issued by the Landlord, or by the Landlord's Agents. Different types of contract are used depending on whether it will be a company, or a private tenancy. You should review it to make sure that the commercial terms in the draft reflect what you have agreed. There is no standard contract in use, and the wording of each agreement varies slightly. Each contract should be checked by a solicitor or counsellor. The main sections of a rental contract are as follows:

  • Introduction
    This gives the names of the Landlord and Tenant, the address of the property, the starting date and term, and the rent payable. It may also record other information such as the amount of the security deposit, and the name of Landlord's Agents.
  • Tenant's Obligations
    The longest part of the contract, and normally a list of what the Tenant will pay for in addition to the rent, plus a set of restrictive obligations setting out what the Tenant is not allowed to do!
  • Landlord's Obligations
    A much smaller section that sets out what the Landlord will do in return for the rent.
  • Termination
    A mainly standard section that sets out a number of reasons for automatic termination of the tenancy, for example, the non-payment of the rent.
  • Variations and Additions
    Any non-standard clauses are lumped together at the end of the contract. For example, any additional rights of termination by either the Landlord, or the Tenant, are listed here, as are any options to renew the contract for a further term. The security deposit is often listed here.

Most contracts are several pages in length, and contain a number of unusual, and perhaps slightly unnecessary obligations! The many different rental contracts in use have evolved over a long period of time, and have often been amended as a result of legal action and court decisions. Because of this, it can be quite difficult to get agreement to delete even unnecessary clauses from a contract, but it is often surprisingly easy to agree variations and additions! If you are unable to negotiate a contract that is fair and reasonable to both parties then we would recommend that you do not proceed.

Monies

There will be an initial account for the security deposit, first month's (or quarter's) rent, and any agreement preparation and check-in fees, which will need to be paid before the keys can be released. If you are planning to pay by personal cheque then you will need to give the Agents or the Landlord the cheque at least five working days before the start of the tenancy. We recommend that you pay by banker's draft (a cheque issued by a bank in their own name - it's as good as cash), and that the draft is handed over only on the day the tenancy actually starts.

You should note that you should normally send the letting agreement for "stamping" at an Inland Revenue Stamp Office.

TENANCY DEPOSIT SCHEME

What Is The Tenancy Deposit Scheme?

In the UK you will be required to pay a security deposit to your Landlord or their letting agency, usually equal to approximately six weeks rent. This will be held against dilapidations until the end of the tenancy. The tenancy deposit scheme safeguards the deposits relating to Assured Shorthold Tenancies in England and Wales under the provisions of the Housing Act 2004.

This scheme is designed to strengthen the Tenant's position and ensure that a fair and correct amount of deposit is returned to them after agreed deductions have been made and within a reasonable amount of time. The scheme also encourages Landlords as well as Tenants to make a clear agreement from the start about the condition of the property.

The legislation does not currently apply to deposits relating to Non Housing Act tenancies although they can be deposited in the scheme. Several factors determine which of the two tenancy types will apply. The following criteria must be fulfilled in order for an Assured Shorthold Tenancy, which will generally favour the Tenant, to be used.

  • The Tenant must be an individual or group of individuals but not a company
  • At least one of the named Tenants must occupy the property as their principal home
  • The annual rent for the property must not exceed £25,000
  • The Landlord must not be resident in the property
When Did The Tenancy Deposit Scheme Start?

The scheme was introduced on the 6th April 2007. For all Assured Shorthold Tenancies that started after the 6th April 2007 the Landlord or agent is required to subscribe themselves to a Tenancy Deposit Scheme with which they register every deposit they hold.

Types of Tenancy Deposit Scheme

There are two types of tenancy deposit schemes that a letting agent or Landlord can register a deposit with. Both of these schemes provide a free dispute resolution service and provide the same protection to you, the Tenant.

Insurance-based Scheme

This scheme allows for the deposit to be paid directly to the Landlord. The Landlord will then hold the deposit and in return pay a premium to the insurer – this is the main difference between the two schemes.

Custodial Scheme

With this scheme the deposit is paid directly to the agent or Landlord. The agent or Landlord will then pay the deposit to a third party company, appointed by the government, for the duration of the tenancy.

Who Are The Appointed Companies To Hold The Deposit?

The government has appointed three companies to run the tenancy deposit scheme.

  • The Deposit Protection Service (The DPS)
    This is the only custodial deposit protection scheme and is free to use. Letting agents and Landlords can register with this scheme.
  • Tenancy Deposit Solutions Ltd (TDSL)
    This scheme is an insurance-based tenancy deposit scheme. Tenancy Deposit Solutions Ltd is a partnership between the National Landlord Association and Hamilton Fraser Insurance. The scheme is designed with Landlords in mind, however letting agents can also join the scheme.
  • The Tenancy Deposit Scheme (TDS)
    This is an insurance-backed deposit protection and dispute resolution scheme managed by the The Dispute Service. The scheme enables lettings agents and Landlord to hold deposits.
What Happens When You Have Paid The Deposit?

Within 14 days of receipt of the deposit from the Tenant, the Landlord or agent must provide you with details about how the deposit is protected, these need to include:

  • Contact details of the tenancy deposit scheme chosen
  • Contact details of the agent or Landlord
  • How you can apply for the release of the deposit
  • Information explaining the purpose of the deposit
  • What to do should there be a dispute about the deposit
How Is The Deposit Returned At The End Of The Tenancy With An Insurance-based Scheme?

When an agreement is reached about how the deposit should be divided, the Landlord or agent will return all or some of the deposit.

If there is a dispute about the amount being returned, the Landlord must hand over the disputed amount to the insurance scheme for safe-keeping until the dispute has been resolved.

If the Landlord for any reasons fails to return the correct amount of the deposit to you in accordance with the guidelines, the scheme will ensure that the entitled deposit amount is returned to you.

How Is The Deposit Returned At The End Of The Tenancy With A Custodial Scheme?

When agreement is reached between the Tenant and Landlord as to how the deposit will be divided, the scheme will return the deposit in the agreed proportions on the written instructions of both the Landlord and Tenant. Should there be a dispute, the scheme will hold the deposit until the dispute resolution service or courts decide what is fair.

Be aware that any interest accrued by deposits being held in the scheme will be used to pay for the running of the scheme, which does not charge a fee to register deposits.

Deductions From Deposits

The Tenancy Deposit Scheme does not prevent the Landlord from making reasonable deductions from your deposit. Your tenancy agreement will contain clauses referring to possible deductions and your responsibilities however the most common cause is damage to the property over and beyond 'fair wear and tear'. To reduce the possibility of disputes over deductions from the deposit it is important to thoroughly check the inventory for your property at the start of your tenancy.

More more information on the Tenancy Deposit Scheme, you can visit the Directgov website.
www.gov.uk/tenancy-deposit-protection

MOVING IN

By now you should be at the stage where all references have been taken up and answers received, a contract has been agreed and signed, and you're in a position to hand over a bank draft. What comes next? Here's your task list:

  • Decide what sort of telephone service you want, and from which supplier. If you want an internet connection, decide on type and supplier.
  • Attend the check-in and agree the inventory & schedule of condition.
  • Ensure that you are registered for Council Tax.
  • Set up your utility accounts using the meter readings taken at check-in.
  • Move in to your new home.
Check-In

The final "formality" is the check-in. This is held at the property, and a formal document called the inventory and schedule of condition ( the "inventory") is agreed between the Tenant and the Landlord's representative. This document will usually have been pre-prepared by a specialist Inventory Clerk.

The checking of the inventory is a mind-numbingly boring task that involves going round the property, room by room, and noting the exact contents and their condition. Don't be tempted to pass or skimp on this job. Careful checking of the inventory at the start of the tenancy will prevent unreasonable deductions (called dilapidations) from your security deposit when you leave!

Some points to note:

  • Check with the Landlord or Agent beforehand that whoever will be present for the check-in will have a clean hardcopy inventory for you to check and sign.
  • Sometimes a hardcopy inventory will not be available and the clerk will be compiling an inventory at check-in. If so, complete and sign the general declaration, but agree with the landlord or Agent that you can have seven days from receipt of the hardcopy inventory to check it, sign and then return it.
  • If the hardcopy document is wrong, make handwritten amendments in all copies.
  • Ensure that you keep a copy of the inventory yourself for use at tenancy termination.
Council Tax

You will need to register with the local authority in your area for Council Tax. You can do this by phone, and they'll send you an account. The Council Tax year runs from 1st April to 31st March, and you can usually pay in ten instalments by direct debit.

Utilities

You will need to transfer the utilities in to your name at the start of the tenancy. Again, you can do this by phone. Gas and electricity are billed every three months, and you can arrange these to pay by direct debit. There are a number of different suppliers in the market, and it can pay to shop around.

RENTAL GLOSSARY

Lettings The words "rent" and "let" mean the same when applied to property. "To Let" means that the property is available to rent. Agents dealing with rental property often call themselves "Letting Agents".
Landlord The first party to the rental contract, and usually the owner of the property that is being rented out.
Tenant The second party to the rental contract, and the company, or person(s) who will be paying the Rent.
Approved Occupier In the case of a company let the "approved occupier" is the company employee who will be residing at the premises.
Rent and Security Deposit The Rent will be payable either monthly (12 payments annually), or quarterly (4 payments annually). The Security Deposit varies from one month's rent, to two month's rent.
Stakeholder / Agent A security deposit can be held by a third party "as stakeholder". This means that the third party cannot dispose of or pay out the deposit without the consent of both Landlord AND Tenant. Where the third party holds the deposit "as agent" then they can dispose of or pay out the deposit solely on the Landlord's instructions. This offers the Tenant less protection.
Term The length of the rental contract. This is normally "one year less one day", and may be extended by exercising option(s) to renew the contract. The minimum period is normally six months.
Inventory The "Inventory and Schedule Of Condition" describes the contents of the property, and its condition. At best, a large document professionally produced by an Inventory Clerk, that goes into mind-numbing detail. At worst, a one page list prepared by the Landlord. We prefer a detailed inventory.
Check In and Check Out The process of checking the inventory and schedule of condition of the property at either the start, or the end, of the Tenancy.

STAMP DUTY

What Is Stamp Duty?

Stamp duty is a tax payable to Her Majesty’s Revenue & Customs (HMRC) on certain legal documents which are then legally recognised. In particular, Stamp Duty Land Tax (SDLT) relates to tax due when purchasing or renting land or property of over a certain value. There are other forms of stamp duty which are payable when purchasing items such as stock and shares.

Renting A Property

When renting a residential property the Tenant is liable for notifying the HMRC if SDLT is due on a tenancy agreement.

Please be advised that If you do not notify the HMRC, and a dispute arises with your Landlord, the tenancy agreement is not admissible in court unless it has been stamped. There are quite hefty penalties applied for late submissions!

When working out how much duty is payable you will need to know what the Net Present Value (NPV) of the rent is over the term of the tenancy. If your tenancy is just starting you will just need to consider the initial term. For any successive tenancy, i.e. you are extending, you should consider the whole term, i.e. the commencement date of the initial term though to the termination date of the extension. If the total NPV is in excess of £125,000 the tax will be applicable at a rate of 1% on the proportion of the rent over that figure.

To work out how much duty is payable on what the Inland Revenue class as a "short tenancy", having a term of less than 7 years we would recommend that you use their calculator.
www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro

What Penalties And Interest Can I Incur?

The HMRC must have received your completed return form and monies within 30 days of the ‘effective date’ of your transaction. The effective date is usually the date on which you complete on your property. The fines are relatively small unless you file more than 12 months late.
www.gov.uk/guidance/stamp-duty-land-tax-online-returns

Where Should I Send My Documents To?

Your legal representative can file your paperwork online. However, if you need to submit the paperwork yourself you can contact the HMRC by phone or email to request a paper form.
www.gov.uk/government/organisations/hm-revenue-customs/contact/stamp-duty-land-tax-forms-ordering

The form completion is quite involved and not the most straight-forward process. In the event that you would like us to do this on your behalf please contact us.

Enquire

BUYING IN THE UK

FINDING A PROPERTY

Unfortunately, there is no central listing service in the UK, so finding a property to purchase can involve a lot of legwork and a lot of organisation. In most towns' local newspapers, a property section is produced where estate agents will advertise a selection of properties that they have on their books. This is a good way of finding out roughly what properties in different parts of a town sell for. Our Area Information guides detail the newspapers for an area, and also contain broad property price information.

There are a number of things to do before taking the plunge:

Jobs To Do
  • Research your target areas.
  • Speak to an Independent Financial Adviser to find out how much you can afford to borrow. Choose a mortgage product.
  • Register your requirements with estate agents who serve the area that you have chosen.
  • Choose and instruct a legal adviser.
  • Obtain removal quotations.
Where To Live?

The first thing you need to do is decide where you want to live. Make sure you research everything about the area - crime rates, council tax level, leisure facilities. Consider the transport links, how long it will take you to get to work, are the facilities sufficient for your requirements, are there good schools in the area? All these are big influencing factors on your final choice of location.

Do try to visit the areas you are considering living in at different times of day and on different days of the week- is it always quiet or do the local children all hang out in that part of town? Although it may seem to be defeating the object of looking for a house; ensure you consider how easy it will be re-sell the house once it's time for you to move on. Always remember the golden rule of buying a house - 'location, location, location'.

Estate Agents

Once you have a good idea of where you want to buy, you need to visit as many estate agents as you can to see what is available. There are often dozens of different estate agents within a town and although some of them will have the same properties it is usual that people will only instruct one estate agent to sell their house, so legwork is the key to ensuring that you are fully aware of everything that is on the market.

The estate agents will then usually mail property details to you as new property becomes available - however, despite the fact that you will have carefully advised the agent of your criteria, don't be surprised to receive details of properties that clearly do not match what you are searching for!

Anyone can set up business as an estate agent, and no formal training or qualifications are needed to do the job. Unfortunately, estate agents have attracted a poor reputation - often likened to used-car salesmen - for 'over-dressing' the descriptions of a property in order to sell it and of being very pushy in their negotiations.

Most of the larger groups of estate agents voluntarily subscribe to NAEA (National Association of Estate Agents). This is a governing body which standardises the levels of service and conduct offered by it's members. The property details they compile to describe the features of the property are covered by the Property Mis-descriptions Act, to try to cut down on the misleading language that used to be a 'feature' of estate agent's details.

The Internet

The internet is becoming an increasingly popular method of searching for properties. A lot of estate agents have realised that it is a powerful marketing tool and will do everything they can to ensure that their web pages are kept up to date. However, a disappointingly large amount of agents do not put as much effort into it as they should and it is a common occurrence to telephone an agent to request full details of a property only to find that it is under offer or sold.

The internet is a good way of getting started and obtaining a feel of what is happening in the market, but local knowledge and specialist advice are still important.

Viewings

Before you start viewing properties, make sure you have spoken to a mortgage adviser to know how much money a mortgage lender is likely to approve you for. The last thing you want to happen is to find your dream home only to later find out that you can't afford it. When planning your budget, be sure to include mortgage arrangement fees, surveyors costs, legal fees, stamp duty, life insurance, building and contents insurance and removals. They all add up very quickly and certainly make a difference to what you originally thought you could afford.

It is a good idea to make a list of definite "must haves" that you are not prepared to compromise on, along with a list of "nice-to-haves" that you could live with out if everything else is right in the property. Don't feel as though because you have seen twenty houses you have to choose one of them - if the property doesn't feel right, then keep looking. Don't compromise on things that are important to your life-style.

Viewing properties can be good fun, but is also very tiring. We would normally expect to see a selection of approximately ten properties in a day's viewings. Do try to view the properties in daylight hours so that subtle lighting is not masking any horrors. The property market does move fairly fast and good homes that are sensibly priced can go under offer very quickly. However, never rush into something without making a considered decision. It's very easy to fall in love with a house and therefore have your instincts clouded against any potential problems.

Placing An Offer

You've finally found the property you've been searching for, but how do you start the process of making it yours?

Firstly, don't make an offer there and then at the time you are viewing. This will leave you with no room for negotiation as the vendor will know that you love the property. Go home, think about it for a while and then decide at what level you want to open your bidding on the house. When deciding your offer, take into account the condition of the property and the likely cost of any repairs. Deduct these from what you think the house is really worth if everything was in good condition. You should also decide in advance what fixtures and fittings you want the vendor to leave behind.

When negotiating, it is quite usual to knock at least five percent off of the asking price of a property in good condition - sometimes even more. Before you offer, decide what is the maximum price that you are willing to pay for this house - and stick to it! It is very easy to get emotionally attached to the house, but if it's not worth what you are offering, the mortgage company will not lend the money you need to buy it.

The usual way to make an offer on a house is to call the estate agent and advise them how much you are wanting to pay. They will then ask you some questions which will clarify what purchasing position you are in and then put the offer forward to the vendor. When you place your offer, state that the offer is "subject to contract" and "is to include . . ". If you have any other terms and conditions that you'd like to impose, such as "exchange of contracts within 28 days", then that's the time to make yourself clear. It can take a little while for the vendor to think about your offer, so don't expect to get an immediate response.

In some cases there may be two or more people interested in the property. Rather than keep going backwards and forwards between the parties, the estate agent and vendor may agree to enter into a 'sealed bids' deal. This is where all people interested in buying the property are asked to write their best bid on a piece of paper and then put it in a sealed envelope and submit it to the estate agent. On the day that the bids close, the estate agent will open all the bids and the highest 'wins' the house. In this instance you would not be able to increase your offer any further if yours was not the winning bid.

FINALISING THE DEAL

So, you've found the house of your dreams, you've placed your offer and the vendor has accepted it. What do you do next?

  • Arrange your mortgage
  • Instruct your legal adviser
  • Obtain removal quotes
  • Move in

Whilst under English law, the process for purchasing a property follows a set procedure, there are numerous loop-holes in it that tend to be all in favour of the vendor rather than the purchaser.

Until the legal process called 'exchange of contracts' takes place, neither party is legally bound to the deal; the vendor doesn't have to sell and the purchaser doesn't have to buy. Whilst this means that you can withdraw from the sale, it also means that the vendor can accept a higher offer and 'gazump' you (sell the house to someone else unless you increase your offer). However, having said that, most people are honest and will stick by the deal you have agreed.

Apply For a Mortgage

The first thing to do is to arrange your mortgage. There are a huge amount of mortgage products on the market, so it is definitely worthwhile speaking to an Independent Financial Adviser (IFA). The financial advice industry is heavily regulated to prevent mis-selling, and IFA's have a duty of care to their clients.

Be aware that most estate agents will also offer you a financial advice service. However, most of their financial advisers are not full IFA's, and are usually only allowed to sell the mortgage products from those companies with whom they have an agency agreement. They may not be able to offer you the deal that is best suited to you.

Instruct a Legal Adviser

The next thing you need to do is to instruct a legal adviser. The legal work involved in house purchase is called "conveyancing", and can be done either by a solicitor (a general lawyer who undertakes all types of legal transactions), or by a licensed conveyancer, a paralegal who only carries out property purchase transactions.

One of the best ways of choosing a legal adviser is by personal recommendation. Be sure to obtain a quote for their fees in advance - these will differ greatly from practice to practice and can add a substantial amount of money to your budget. In general a licensed converyancer should be cheaper, although you may prefer to have access to a solicitor who at the same time can assist you with matters such as revision of wills, etc.

Some mortgage companies may well offer free legal services, so this is something to consider.

Ensure that you give your legal adviser details of the estate agent you are selling and buying through and the mortgage company that you are using. You will need to supply your estate agent with the details of your legal adviser so that they can send a Memorandum of Sale to them.

Memorandum of Sale

The Memorandum of Sale is a document which lists the details of the agreement. It will have legal adviser's details, the address of the property, the price agreed, details of the fixtures and fittings included in the sale and any other important information. A copy will be sent to you, the vendor and both parties' legal advisers. This is not a legal document, merely a form that the estate agent uses.

The Legal Process

The vendors' legal adviser will apply to the UK Land Registry for the deeds to the property and once they have been received, will forward office copies to your legal adviser to check through them page by page to ensure that there are no restrictive covenants in the deeds or clauses that have an onerous affect on the ownership of the house. Ordinarily, legal advisers will only correspond in writing and this process can take some time.

At the same time, your legal adviser will apply to the local authority that controls the property you are purchasing for a 'local search'. This is where the local council has to disclose any plans that have been agreed for development in the area close to your chosen property i.e. has the pretty winding lane outside your cottage been approved to be turned into a 10 lane motorway, or has the property owner been served with a public health notice, for example? The searches can take a few weeks to be returned from the local authority, but are only valid for a three month period.

The legal advisers will prepare and approve the contract of sale. This contains the full details of what you are buying and it is this that you and the vendor will be asked to sign. You will also be asked to sign a mortgage deed which is the contract between you and your lender.

Survey and Valuation

Your mortgage company will, before finally approving you for the loan, instruct one of their own surveyors (don't be fooled, you will still have to pay for the survey report) to carry out a survey on the house you are purchasing to ensure that it is suitable security for them to lend money against. Do bear in mind that they do not necessarily have your best interests at heart - the purpose of this valuation survey is for your mortgage company to check that the house is worth what you have offered for it and subsequently that they will not be lending too much money on it and will be able to recover their money should you default on your repayments. So, whilst the surveyor will be ensuring that the house isn't falling down, they will not be preparing a fully detailed report about the house.

It is worth considering investing in either a homebuyers report or a building survey. These reports will give you more information about the property than the mortgage company's valuation report and considering that this is one of the most expensive things you will ever purchase, the cost of an in-depth survey will go a long way to putting your mind at rest that you are making the right choice.

The survey report may well high-light the need for further, specialist, reports to be carried out. Perhaps the surveyor suspects that there may be damp present in the property. These conditions would need to be satisfied prior to the mortgage company confirming their offer of a loan to you. Alternatively, the mortgage company may offer to only release part of the mortgage amount until such times as any work that needs to be done to the property has been completed. If this is done, it is called a retention and once the mortgage company is satisfied, the money will be released. This does of course mean that you will be short of funds to complete your purchase. You're forced to either renegotiate the deal to take the cost of the works into consideration, or to fund the works yourself.

Once the mortgage company is satisfied with the value of the house and it's condition, they will issue a formal mortgage offer. This is the confirmation to you and your legal adviser that you have the money with which to buy the house you have offered on.

Exchange and Completion

Once your legal adviser is happy with all of the clauses within the deeds, has a clear local search, a formal mortgage offer and an approved contract of sale, the sale can go ahead. You will be asked to sign the contract, and the legal advisers will agree to 'exchange contracts'. Once exchange takes place the sale becomes legally binding and neither party can change their mind. At the point of exchange (and this can be agreed verbally, and followed up by post), your deposit amount is paid to the vendor's solicitor and a date of completion is agreed. You also become responsible for insuring the building you have agreed to purchase. It is on the completion that you have to pay the remainder of the purchase price (this is usually sent from your mortgage company to your legal adviser, and then on to the vendor's legal adviser).

Once the vendor's legal adviser has received cleared funds, you will be able to collect the keys to your new home from the estate agent and the house is yours. It is normal to have a period of time between exchange and completion, traditionally 28 days so as to book removals, etc., although the two legal processes can be done on the same day. Do bear in mind that even though the mortgage company and solicitors have been aware of your date of completion for some time, there is no guarantee as to what time of day the money will arrive in the right bank account. Although most completions happen around lunch-time, which gives your removal men plenty of time to start moving you into the house, it is not unknown for the money not to arrive until the late afternoon and for you to be sitting outside your new home just waiting for a phone-call!

After Completion

Once completion has taken place, your legal adviser will re-register the title deeds of the property with the Land Registry so that it shows your name as the legal owner. The other thing you need to do once you have completed is pay the Stamp Duty that is due. You will also need to settle the invoice for your legal adviser's fees.

Whilst this process may seem to be relatively straightforward, it is usual that there will be a 'chain' of sales and purchases taking place that will all have been agreed at different times. The chain could be never-ending or just a couple of transactions long. Regardless of how many transactions are taking place, they will all have to conclude on the same date and this is where the delays and pitfalls of buying a house arise. Typically, you will be advised that the legal process will take 6-8 weeks to get to the point of exchange of contracts. However, 10% of all transactions take longer than 20 weeks. Perhaps this is why people say that moving house is one of the most stressful things you will ever do.

MOVING IN

By now you should be at the point where the chain of purchases and sales are all at the same stage, a contract has been agreed, signed, and exchanged. The date of completion has been set and the mortgage company are ready to release funds to complete your purchase. What comes next? Here's your task list:

  • Confirm your moving date with your removal company.
  • Ask your removers to drop off some packing boxes so you can make a start on packing.
  • Decide what sort of telephone service you want, and from which supplier. If you want an Internet connection, decide on type and supplier.
  • Ensure that you are registered for Council Tax at your new property.
  • Set up your utility accounts using the meter readings taken on the day you move in.
  • Purchase a television licence.
  • Collect the keys from the estate agent.
  • Move in to your new home.
Council Tax

You will need to register with the local authority in your area for Council Tax. You can do this by phone, and they'll send you an account. The Council Tax year runs from 1st April to 31st March, and you can usually pay in ten instalments by direct debit.

Utilities

You will need to transfer the utilities in to your name once you move in. Again, you can do this by phone. Gas and electricity are billed every three months, and you can arrange these to pay by direct debit. There are a number of different suppliers in the market, and it can pay to shop around.

PURCHASE GLOSSARY

Completion The point in time at which the sale is completed. The balance of the purchase price is paid, and ownership passes to the purchaser.
Conveyance Another term for the contract documents that convey the ownership of the house from vendor to purchaser.
Exchange of Contracts The point in time at which the obligation to sell or to purchase becomes legally binding. Contracts are signed and exchanged, and a deposit is paid. On exchange, a date is agreed for completion.
Fixtures & Fittings Those items not of a personal nature that are currently in the property, but whose sale is not included within the asking price. These are items such as carpets and floor treatments, curtains, blinds and other window treatments, and built-in electrical appliances such as an oven or hob.
Searches A Local Authority Search is done to check that the property is not adversely affected by any local authority plans or proposals.
A Mining Search may also be carried out if there are previous workings in the area.
A Land Registry Search checks ownership and also looks for any outstanding legal charges, such as a mortgage or bank loan, secured against the property being sold.
Subject To Contract Any offer made for a property, whether orally or in writing, is normally made "Subject To Contract", which means that the offer is not binding until contracts have been signed and exchanged.
Survey An examination of the property by an expert building surveyor. A House Buyer's Report is a mini-survey, at lower cost, suitable for the purchase of an apartment or a house of fairly recent standard construction. A Full Structural Survey is, as the name suggests, the full works and is necessary for all older property.
Vendor The first party to the sale contract, and the owner of the property that is being sold.
Valuation An examination of the property by a valuer working for the mortgage company, made before they agree to a mortgage advance. This is often carried out by the surveyor who will also conduct the survey.

STAMP DUTY

What Is Stamp Duty?

Stamp duty is a tax payable to Her Majesty’s Revenue & Customs (HMRC) on certain legal documents which are then legally recognised. In particular, Stamp Duty Land Tax (SDLT) relates to tax due when purchasing or renting land or property of over a certain value. There are other forms of stamp duty which are payable when purchasing items such as stock and shares.

Buying a Property

When buying property or land in England, Wales or Northern Ireland, you as the purchaser, are responsible for paying stamp duty on a property. The vendor does not pay anything. Your legal adviser will usually collect the monies from you, with their fees, and forward them on to the stamp office on the day you complete.

If you are buying a residential freehold property you will pay the percentage detailed below.

Band Rate
Up to and including £125,000 Zero
Between £125,001 and £250,000 2%
Between £250,001 and £925,000 5%
Between £925,001 and £1,500,000 10%
Above £1,500,001 12%

(Figures and rates last updated 16th March 2016)

You pay the percentage due on the banded amount. E.g. on a property with a purchase price of £800,000:

Up to £125,000 0% £0
£125,001 and up to £250,000 2% £2,500
£250,001 and up to £925,000 5% £27,500
Total Due £30,000

If you are buying a leasehold property and a new lease is required, you pay stamp duty on the purchase price (premium) using the rates above. You will also have a further charge to pay if the net present value of the property over the life of the lease totals more the £125,000.

If you are buying any property beyond your main residence, then from 1st April 2016 you will have to pay a further 3% on top of normal rates detailed above. More information is available on the gov.uk website.
www.gov.uk/stamp-duty-land-tax

For non-residential and mixed-use properties the rates are different and you can find more information on the gov.uk website.
www.gov.uk/stamp-duty-land-tax/nonresidential-and-mixed-use-rates

What Penalties and Interest Can I Incur?

The HMRC must have received your completed return form and monies within 30 days of the ‘effective date’ of your transaction. The effective date is usually the date on which you complete on your property. The fines are relatively small unless you file more than 12 months late.

www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro
www.gov.uk/guidance/stamp-duty-land-tax-online-returns

Where Should I Send My Documents To?

Your legal representative can file your paperwork online. However, if you need to submit the paperwork yourself you can contact the HMRC by phone or email to request a paper form.
www.gov.uk/government/organisations/hm-revenue-customs/contact/stamp-duty-land-tax-forms-ordering

The form completion is quite involved and not the most straight-forward process. In the event that you would like us to do this on your behalf please contact us.

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