1. The DIGITAL properTy mAGAzIneesmartpropertyISSUE 16 Mortgage Payment 2010 Protection Insurance housing Taking steps to protect yourself against losing your home Property prices market Predictions for thecontinue to riseLatest figures show gains over next 12 months the sixth consecutive month Remortgaging Lenders offering better ratesResidentialPositive rental rental market sentiment Opportunities for new andSurveyors expect to see rent existing investors in 2010 rises during the New Year

2. 050616 10 Planning your remortgage. In this issue 05 Pre-Budget ReportFundamental reform still needed,10 Positive rental sentiment Surveyors expect to see rent rises21 Mortgage Payment ProtectionInsuranceIsnt it time you talked to us another missed opportunity!11 during the New YearTaking steps to protect yourself againstlosing your home 05Property prices continue toStamp duty about saving money?riseLatest figures show gains over thesixth consecutive month Holiday helped approximately 240,000 homeowners22 Independent deposit schemesCost-cutting measures could undermineprocess07 The key factors during 2009A huge financial burden lifted from13 Confident buyers returning Acute shortage of homes for sale is bolstering the market 22 Residential rental marketOpportunities for new and existing Were passionate about making sure youll obtain millions of home owners investors in 2010the best mortgage deal available. 07 Holiday homesTax changes on the horizon13 Energy efficient homes Sustainable consumer-friendly green rating23 Property ownershipBuying a leasehold Contact us to discuss your current situation, and well help you find the best deal that's right for you. 07 Seasonally adjusted two-year highHouse prices rose at their fastest pace15 Buying a home The legal aspects of becoming the owner of your property 24 Having problems paying yourmortgage?Seeking help sooner rather than later isin three yearsthe key 08 Rural resilienceImbalance between supply and17 Remortgaging Lenders offering better rates 26 Buy-to-letInvesting in the private rented sectordemand pushing prices upwards19 Landlords air their grievances 28 A to Z property and mortgage09 2010 housing marketPredictions for the next 12 months Survey reports dislike over adverse burdensome legislationtermsAssisting you to buy property, sellproperty and finance your mortgage09 Homeowners breathe a sighof reliefHome across the nation increased in19 New plans for borrowers Stricter scrutiny of mortgage applications30 Strong interest from buyersDemand is still outstripping supply2009Your property may be repossessed if you do not keep up repayments on your mortgage.03 3. 14 News Pre-Budget Property pricescontinue to rise In this Report Latest figures show gains overthe sixth consecutive monthissue Fundamental reform still needed, another missed opportunity!House prices rose again during November last year,taking the average house price in the UK to almostthe same level as they were a year ago. Prices gained Welcome to the first edition of our0.9 per cent according to the latest government property and mortgage magazine forFollowing the Pre-Budget Report in December, the Council offigures, which is the sixth consecutive month that0922 the new decade. Inside youll find a mixMortgage Lenders (CML) welcomed the announcement by theLand Registry figures have reported an increase. of news articles and features including Chancellor, Alistair Darling that help with mortgage payments for predictions for the UK property market Other house price indices have been showing rises over the next 12 months. working-age borrowers on income support will be maintained atfor longer than that, but the Land Registry measure is current levels for the next six months.regarded as being the last to reflect changes in prices House prices rose again during Novemberas it is based on sale completions. last year, taking the average house price Payments of income support are helpingCommenting on the Pre-Budget Report, the in the UK to almost the same level as around 100,000 households stay in their CML's director general Michael Coogan said:The November rise of 0.9 per cent was higher than they were a year ago. On page 05 find homes, and a further 113,000 older the 0.6 per cent rise in October, and the same as the out more about the latest governmenthome-owners are receiving help with their "Lenders are determined that possessionfigure for September. figures, the sixth consecutive month that mortgage through pension credits. is a last resort. With earlier and better Land Registry figures have reported ancommunication between lenders, consumers The average house price in england and Wales is now increase. The CML were disappointed that theand debt advisers, arrears are being managed 161,554, according to the Land Registry. stamp duty "holiday" ceased at the endthrough the recession and possession action 19 Many homeowners may be in their of December and commented that it was minimised, wherever possible.The rise means that, averaged across the UK, house13 strongest position to remortgage in moreanother missed opportunity and that more prices now stand just 0.3 per cent lower than they did than two years thanks to a recovery infundamental reform of this tax, which "However, a state safety net is also a vital a year ago. property prices. There's been a recoverycontinues to distort the housing market,part of the picture, and so we welcome the in property prices since April last yearis still needed. With a lower number of Pre-Budget Report announcement of no Prices have recovered most strongly in London, which has left homeowners in a stronger housing transactions expected this year, it change to the rate of support for mortgage where property is now 3.5 per cent more valuable position. On page 16 find out why now would have been possible for the Treasury interest at 6.08 per cent. In a low-interest ratethan a year ago following a 2 per cent rise in may be the best time to remortgage in to consider the introduction of revenue-environment, and with so much progress November. more than two years.neutral reform that would have removedbeing made by lenders and borrowers market distortion.together, it is no surprise that the back-stop There were also inconsistencies in the types of With 2009 a distant memory, British government schemes have not been widelyproperties that are selling for higher prices. The homeowners can breathe a sigh ofThe CML also notes the government's used. This situation may change if pressures biggest increases have been for detached family relief as home values across the nation intention to explore ways of encouragingbuild, as interest rates rise in the future. So we homes, which are in the greatest demand. Prices of increased by 39.1 billion. Whilst themore sustainable, transparent and are committed to continuing to work with these properties were 1.6 per cent higher last month increase is modest, it is a massive standardised markets for UK mortgage- the government to ensure the best possible than in November last year. improvement over 2008 when Britishbacked securities, and looks forward to outcomes for borrowers going through property values fell 811.3 billion. Turn toseeing more details.short-term financial difficulties."However, semi-detached houses fell in value by 0.1per07 page 9 to read more. cent, while terraced homes were 0.3 per cent cheaper.At the time of publishing, the propertyNEEd MoRE Property transactions also picked up, with sales and mortgage market and economic events are changing very rapidly andINfoRMATIoN?more than 5,000 higher per month between Juneand September than in the same period a year some further changes are likely to havePLeASe CONTACT uS ago. But transactions are historically still at a low occurred by the time you read this WITH YOuR eNQuIRY.level. Price drops in many regions of the UK and in edition. A full content listing appears on particular London and the South east are easing, and pages 3. in some parts of London even increasing as demandovertakes supply - particularly in the premium,higher end of the market. The most promising part of the report is the numberof homes being sold, which although still up tohalf their pre-credit crunch levels, are beginning toincrease again.Content of the articles featured in this publication is for your general information and use only and is not intended toaddress your particular requirements or constitute a full and authoritative statement of the law. They should not be reliedupon in their entirety and shall not be deemed to be, or constitute advice. Although endeavours have been made toTo dISCUSS YoUR provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it isREqUIREMENTS oR received or that it will continue to be accurate in the future. No individual or company should act upon such informationwithout receiving appropriate professional advice after a thorough examination of their particular situation. We cannotTo oBTAIN fURTHER accept responsibility for any loss as a result of acts or omissions taken in respect of any articles. The Financial ServicesINfoRMATIoN Authority (FSA) does not regulate most Buy-to-Let or Commercial Mortgages.PLeASe CONTACT uS.YOUR PROPeRTY MAY Be RePOSSeSSeD IF YOU DO NOT KeeP UP RePAYMeNTS ON YOUR MORTgAge. 0405 4. News Holiday homes Tax changes on the horizon Families who rent out a holiday home in the UK will no longer be able to offset the costs against their tax bill.Rules to be introduced in April this year will stop second home owners from being able to write-off their mortgage interest and other running and maintenance expenses as a business loss. They also will not qualify for capital gains tax relief, stopping people from buying holiday homes with the proceeds of previous sales.The key factors The old rules not only allowed those who owned holiday lets to pay no tax if the rental income did not cover their costs, they could also use their losses to reduce the amount they pay the government on theduring 2009 rest of their income.From April this year, second homes will be treated as property businesses, such as buy-to-lets run by professional landlords. This means they will be subject to a different tax regime, though they will qualify for benefits A huge financial burden lifted fromsuch as energy savings allowances and a 10 per cent deduction for wear and tear on furnishings. millions of home ownersHowever, because of european rules introduced earlier this year those with holiday homes overseas will be able toFor close observers of the uK's property market, 2009 wasclaim the old tax breaks. a big surprise. Contrary to almost everyone's expectations,prices started rising in the spring and kept on going prettymuch every month. According to HM Revenue & Customs(HMRC) completed sales rose steadily too,would otherwise have fallen behind withtheir mortgage payments and then beenSeasonally adjustedfrom the rock-bottom level of just 41,000 threatened with repossession.in January to 90,000 in October 2009.ed Stansfield of Capital economics two-year highThe sudden change in direction broughthighlights other factors.an end to the sharp downturn of theprevious 18 months, in which the banking"The big influence was the relativecrisis led to a slump of about 20 per cent in resilience of labour markets, employmentthe value of the average UK home. has been slow to fall, so there has been noHouse prices rose at theirSimon Rubinsohn, chief economist at thedrip-feed of forced sellers," he says. fastest pace in three yearsRoyal Institution of Chartered SurveyorsA year ago the Council of Mortgage House prices in england and Wales rose at their fastest(RICS), has been equally surprised by thislenders (CML) decided not to make a pace in three years in November 2009, but there are signsabout-turn. public forecast of house prices for 2009. that activity may be levelling off just as new instructions toIts spokesman Bernard Clarke thinks sell hit a two-year high, according to a survey by the Royal"Prices could have fallen further, butthat decision, repeated this year, is fully Institution of Chartered Surveyors (RICS).government policy has been successful,justified.combined with low interest rates," he says. Seasonally adjusted net balance of surveyors reported"It's a vindication of our decision not to rising prices was 35 per cent last during November,"The rise in unemployment has been only forecast in such a volatile market," he said. up from 34 percent in October and the highest sincehalf the level seen in the recession of the November 2006.early 1990s, which has stopped some "No-one forecast the rise this year anddistressed stock coming on the market." it is difficult with such a thin volume of House prices have started rising again in annual terms intransaction to do something that is reliable." recent months, having slumped around 20 per cent fromThe key factor was probably the Bank of their peak during the financial crisis. However, prices haveengland's decision to take its base rate all largely been supported by a lack of supply.the way down to 0.5 per cent by March 2009,in an attempt to stave off the recession andNEEd MoREkeep the banking system afloat. INfoRMATIoN? The RICS survey showed that, for now, demand continued to outpace supply, with the sales-to-stock ratio rising to 31PLeASe CONTACT uSfrom 30 in October, a two-year high.This lifted a huge financial burden fromWITH YOuR eNQuIRY.millions of home owners, some of whom06 07 5. NewsNewsHomeownersbreathe asigh of reliefHome values across thenation increased in 20092010 housing marketWith 2009 a distant memory, British homeowners canbreathe a sigh of relief compared to the same period lastyear as home values across the nation increased by 39.1billion last year. Whilst the increase is modest, it is a massivePredictions for the next 12 monthsimprovement over 2008 when British property values fell811.3 billion, according to property website Zoopla.The National Association of estate Agentsis a mistake and this has the potential to(NAeA) has provided their predictionsreverberate around the market. n Average British home value up 1,517 in 2009, afterfor the UK property market over the nextdropping 31,355 in 200812 months, predicting a market hugelyWe also have an increase in VAT and ann Average property value up 4 per day in 2009, afterdependent on how much lending will beimminent general election. This meanslosing 86 per day in 2008made available.that some people will adopt a wait and n england & Scotland property values rise but Wales see attitude to housing as they studycontinues decline in 2009According to NAeA house prices could what tax changes will mean for them andn Biggest rebound in gloucestershire, up 3.8 per cent thisremain flat, or, in some markets possiblyhow the election is likely to play out.year after 14.1 per cent drop in 2008 Rural resiliencedrop slightly, for the first six monthsof 2010, before picking up again and In recent months the market has However, with the total value of the British residentialremaining stable in the second half of witnessed a slight increase in housing housing stock now standing at 5.3 trillion, up marginallythe year. Supply will remain stable in prices, driven largely by the fact that, inon one year ago, it still remains over three quarters of athe run up to the general election, aftersome markets, demand is outstripping trillion pounds below its peak of 6.1 trillion in late 2007.which there are likely to be more houses supply. If more property comes onto theThe average home in Britain is now worth 205,591, upavailable for sale, particularly if Home market the house price rise will flatten or, 1,517 (0.7 per cent) from one year ago, a daily gain of 4Information Packs are scrapped.in some cases might fall slightly over the for the average property. This is in stark contrast to 2008 Imbalance between supply and demand pushing prices upwardsfirst six months of the year.when property values fell by 31,355 (13.3 per cent) onThe general election would cause a lull inaverage, equivalent to a daily loss of 86 per home.activity as people adopt a wait and seeDuring 2009 there was a pick up in For the first time since autumn Property prices in the Homecontinue and will prices fall again in Results released by 2007 every UK region covered by Counties have shown particular 2010. Currently, there are few signsapproach.demand as many took advantage of Property prices in england have climbed 0.9 per cent over lower prices and interest rates. Thisthe past 12 months, having fallen 13.9 per cent in 2008. the Knight Frankthe index reported a quarterlyresilience, ending 2009 1.4 per cent that stock levels of the best houses clearly indicates that the British publicScottish values have also risen in 2009 by 0.6 per cent to Prime Country price increase. The Home Counties higher. The north of england and will increase markedly this year and During 2009 there still believes that investing in bricks andan average of 156,905 up from 155,597 at the end of continue to lead the country houseScotland are recovering more slowlythe forthcoming general election House Index duringmarket with Q4 growth of 3.1 perwith prices down 11 per cent on an could exacerbate the situation was a pick up inmortar is the right thing to do. last year. However, the property market in Wales is yet torebound and has seen average values drop a further 2.5% December showed cent and annual growth of annual basis, but up 0.5 per cent in further. Coupled with the growing demand as many tookThere have been encouraging levels of (3,866) in 2009 on top of the 13.2 per cent decline in 2008. 1.4 per cent. A significant imbalance the last three months of the year. number of frustrated buyers looking that house prices between supply and demand is for houses, this should help toadvantage of lower pricesfirst time buyers throughout 2009 and I would hope this continues into 2010. Homeowners in gloucestershire have had the biggest rose on average byhelping to push prices upwards. There are a number of reasons forensure prices do not fall back. The and interest rates.Again, the situation with lending will cause for celebration in 2009 as average property values this upturn in property prices, butmost likely scenario is a levelling off have an impact. The NAeA believes that have risen 3.8 per cent over the past year to a current almost 2.3 per cent According to Knight Frank the price the overriding factor is an imbalancesometime in mid 2010. responsible lending to responsible peopleaverage home value of 229,945. of prime country properties in nowbetween supply and demand. A number of buyers may continue to take in the fourth quarter increasing across the country asPotential purchasers are moreadvantage of lower interest rates and is crucial to any recovery.Commenting Zoopla said, 2008 was undoubtedly of the year and are the recovery that started in London confident because they feel prices lower priced property.the annus horribilis for homeowners. But, property during spring 2009 continues to have reached the bottom and are no now just 2.6 per cent spread further into the regions.longer worried about buying into a The continued presence of First Timeprices stabilised during 2009, rising gradually since lower than at the falling market. The cost of borrowing NEEd MoREBuyers will be critical to market success.April after a fairly weak first quarter and the housingbeginning of 2009.Overall, prices rose by 2.3 per centremains low and credit availability isINfoRMATIoN? Peter Bolton King, chief executive of the NEEd MoRE market did not worsen in 2009 as some had fearedand recovery signs are starting to take hold. With the in the final quarter of the yeargradually improving.PLeASe CONTACT NAeA, said: The beginning of 2010 sees INfoRMATIoN?biggest share of the UK's household wealth, 39 per and, on average, are just 2.6 perseveral things happen. The stamp duty uS WITH YOuR PLeASe CONTACT uS cent in property, it is far better news for homeowners cent lower than they were at theThe question everybody is nowholiday ending, despite warnings from beginning of 2009.asking is how long the recovery can eNQuIRY. much of the property industry that this WITH YOuR eNQuIRY.than at the start of last year."0809 6. RentingStamp dutyStamp dutyHoliday helped approximately 240,000 homeownersThe controversial stampThe system has reverted to duty of proved such a good earner forn In 1991, during the last housing 1 per cent being paid on homes soldthe government that it was never recession, the Conservativeduty holiday brought infor more than 125,000. Higher rates repealed.government temporarilyduring 2008 for homesapply above 250,000.n The tax was extended to property suspended stamp duty for ninesales in 1808. months on all properties worthcosting up to 175,000 The scheme was been widely n In 1765, the attempted less than 250,000 in an effort toended at the end ofcriticised for failing to assist enforcement of stamp duty in boost sales. first-time buyers. The holiday was english colonies in America ledn During the housing boom ofDecember last year. This initially meant to run for a year from to protestors demands of nothe late 1990s early 2000s, whenwas confirmed during the September 2008 but was extendedtaxation without representation many more houses became in the full 2009 Budget last year to and ultimately to the Boston liable for stamp duty, gordonPre-Budget Report when remain in place until 31 December. Tea Party and the outbreak of theBrown came under increasingthe Chancellor, AlistairAmerican War of Independence.pressure to adjust the thresholds Campaigners such as the Counciln In 1797, William Pitt the Youngeraccordingly. In 2000/01, the InlandDarling announced that of Mortgage Lenders (CML) want described stamp duty as "easilyRevenue received 2.145 billionthe holiday had helped further reform to the controversialraised, pressing little on any from residential stamp duty; in tax. The CML says that stamp dutyparticular class, especially the 2002/03, it received 3.59 billion.approximately 240,000unfairly constrains first-time buyers, lower orders of society, and n In his 2005 Budget, Brown finallyhomeowners.places a greater burden on the south producing a revenue safely and increased the zero rate stamp of england and encourages price expeditiously collected at small duty threshold from 60,000 to bunching just below the thresholds. expense." He virtually doubled the 120,000, and increased it slightly It favours a graduated structure thattax that year. again in 2006 to 125,000. only charges higher rates of duty on n In 1984 the Tory Chancellor the proportion of the property value Nigel Lawson eased the above the threshold. pressure on homebuyersDid you know?by increasing the thresholdfor stamp duty on propertyNEEd MoREINfoRMATIoN?Positive rental sentimentfrom 25,000 to 30,000 and n Stamp duty was first levied in the UK in 1694 to pay for the warreduced the highest rate of PLeASe CONTACT with France. Although initiallystamp duty from 2 per cent to uS WITH YOuR1 per cent. eNQuIRY. only planned for four years, it Surveyors expect to see rent rises during the New Year Results from the Royal The recent pick up in the housing when the housing market was still strong with 22 per cent moremarket seems to have led to a suffering from falling prices and surveyors reporting rising rather Institution of Chartered drop off in the number of rentalmany would-be sellers were turningthan falling numbers of people Surveyors (RICS) residential properties, particularly houses,to the lettings market when their looking to rent. Tenant demand wasbeing made available and as a houses failed to sell.strongest in London, but increased in lettings survey for Octoberresult surveyor optimism hasmost other parts of the country bar (3rd quarter) 2009, show increased for the first time sinceCurrently the reading for past rents, the east.July 2008. 22 per cent more although still negative, is the least that surveyors expect to see surveyors expect rents to rise rather so since July 2008 with only 4 per rent rises during this New than fall in the next three months. cent of Chartered Surveyors stillreporting falling rather than rising Year as the number of rental The drop off in supply is the rents, indicating that the downward properties coming onto the main driver for the more positive pressure on rents is already startingsentiment, with new instructionsto ease. Significantly London and the market fell for the first time reaching their lowest levels in the North are already seeing the majority since January 2008.surveys history (1998). A net balance of surveyors reporting price risesof 11 per cent of surveyors, haveseen the number of new instructionsover the past three months. NEEd MoREcoming onto the market fallingDemand for rental property isINfoRMATIoN?rather than rising. still rising as 16 per cent more PLeASe CONTACTsurveyors saw activity over the past uS WITH YOuRThis is in stark contrast to levels three months pick up; in particulareNQuIRY.seen during the latter part of 2008 demand for houses was particularly 10 11 7. NewsEnergyefficient homesSustainable consumer-friendlygreen ratingConfident Assessing your buyers returningThe Communities & Local government Housing andPlanning Minister John Healey launched in Decemberproposals for a more consumer-friendly green rating fornew homes that will help green-proof properties and mortgage options.reduce future utility bills by up to nearly 1500 a year in themost energy efficient homes. Acute shortage of homes for sale is The Code for Sustainable Homes was introduced in Aprilbolstering the market 2007 as a standard to improve the overall sustainability ofnew homes. 'The Code' scores against a star rating system,using one to six stars depending on how the propertyAre you looking for the bestThe market experienced a dramatic performs against categories such as energy use, waste,Green shoots, reasons to beimprovement in fortunes during 2009. Thematerials and water.cheerful during 2010most impressive bounce back has beenseen on the Nationwide index, which now Mr Healey has pledged to improve the Code so that mortgage solution?n Confident buyers are returning to thehas prices up by 2.7 per cent annually. it's easier for consumers, whether they are developersmarket and have pushed propertyor individuals simply wanting to grade and track theprices up by 2.7 per cent annually, saysThe market seems to have been at itssustainability of their properties.Nationwide.most buoyant during last summer andn An acute shortage of homes for sale isearly autumn, with asking prices andThe Code is rated from one to six, one being the entrybolstering the market, says the Royalleaping at that point. The big question level, above the level of the standard, mandatory BuildingInstitution of Chartered Surveyors. Itsnow is can this momentum continue.Regulations and six as highest, reflecting exemplarsurveyors say prices will continue rising If youre unsure about how to navigate the mortgage The Bank of england'sthis year.sustainable development. In the first two years, over300,000 have been registered to build to Code standards,n Nationwide has recorded seven market during these challenging economic times, let usquantitative easingconsecutive monthly increases toand nearly 2,000 homes have completed Code certificates.help you dont leave it to chance. programme, pumping in the November.n Libor, the rate at which banks lendThe improved star rating system will also take into accountregion of 200bn of printed to each other, has fallen to within athe tougher new rules for energy efficiency in the buildingregulations, coming into force from 2010 and the longermoney into the economy, normal range of the base rate Contact us to discuss your requirements, and well may also have created- it stood at 0.6075 per cent on7 December 2009.term proposals for energy efficiency standards in zerocarbon homes. The Code will reflect these mandatory help you make a well informed decision.demand. n Quantitative easing has pumped anrequirements giving people the opportunity to build totomorrow's standards today and save more on bills.extra 200bn into the economy, whichshould increase lending, keep Libor lowPrices were up for the seventh month in John Healey, said: "Our homes account for a quarter of UKand add inflationary pressure, whicha row in November 2009, according tocarbon emissions, so it's clear they are a vital part of ourmay eventually drive up house prices.Nationwide. efforts to tackle climate change. The talks in Copenhagenhave underlined the need for us to act now, so we need toThe Bank of england's quantitative easing ensure that people who want to greenproof their homesprogramme, pumping in the regionget a helping hand, not red tape. The Code has proved itsof 200bn of printed money into theeconomy, may also have created demand. NEEd MoREworth but now is the time to make it a more user-friendlystandard for consumers. In the future, this will help driveIf prices manage to sustain their run in INfoRMATIoN? uptake so people will save more money on bills andpopular areas, we could soon be back atPLeASe CONTACT uSreduce the carbon footprint of new homes."unaffordable levels. WITH YOuR eNQuIRY. 13 8. Conveyancing ConveyancingBuying a homeThe legal aspects of becoming the owner of your propertyConveyancing is the legal process that must be followed to transfer the ownershipOtherwise, there is a risk you might be legally committed to buy butof the property from the seller to you. The legal aspects of buying a home can not have access to the money yoube complicated. Most home-buyers appoint a solicitor or a licensed conveyancer need to do so. If you complete your purchase before your sale then youto do the legal work involved in buying a property. That person, known as thewill face a shortfall and may need aconveyancer, will be your legal adviser and will act for you."bridging loan". You need to appoint a solicitorn Make sure the seller has all planning a property, but it may be useful if You become the legal owner ofor licensed conveyancer as soonpermission and completion problems are identified during thethe property on an agreed dateas possible after your offer iscertificates for any alterations or conveyancing process. (known as the "completion" date)accepted so that:extensions to the property. after exchange of contracts. This is n Check that there are no local If your conveyancer is also actingwhen the price you are paying forn You can give your lender the developments (for example,for your lender, your lender maythe property is transferred fromsolicitors or conveyancers road-widening schemes)instruct the conveyancer to your mortgage lender to the seller.details. planned which might affect theprepare the mortgage deed. This The conveyancer is responsiblen Your conveyancer can makevalue of the property.is the legal contract between you for checking that the funds havecontact with the seller'sn Check that the street, pavement and the lender. Your conveyancerbeen received before allowing theconveyancer and begin work onand main drains are public andwill explain the terms of the keys to be released to the newdrafting the contract that willmaintained by the local authority.mortgage deed to you, and thenowner. Often, in practice, it will beform the basis of the selling/ n Negotiate and agree (with the have them signed by you and the seller or the estate agent whobuying agreement.sellers conveyancer) the draft the lender. hands over the keys.n The solicitor or conveyancer can of the contract setting out thecheck over any valuation reports terms on which you are buying.Once the conveyancing work hasand offers of advance. n Register or record the change been completed, you and the of title to the property, and seller need to sign the contractA lot of legal work involved in buying the mortgage deed (loan your conveyancers have agreeda home doesnt need to involve you agreement) in favour of the that sets out the terms of thedirectly, but it is useful to understand lender, with the Land Registry. sale. The conveyancers will thenwhat needs to be done in case youexchange contracts and at thisneed to check up on progress.Obtaining all the necessary point both you and the seller are information can be time-legally committed to the deal. AtYour conveyancer will do the consuming. Your conveyancer willthis point, you will need to payfollowing: request "searches" of information a deposit of about 10 per cent that could affect your property of the purchase price. Also, youn Obtain the title deeds from the relevant local authority become responsible for putting(documents giving evidence and sometimes other agencies. right any loss of or damage toof ownership) of the propertyfrom the sellers conveyancer Sometimes these can be obtained quickly and electronically, but the property (unless the contract says otherwise). Your conveyancerNEEd MoREand examine them to make suresometimes they can be slower andwill advise on how and when this INfoRMATIoN?there are no problems. this may cause delay. should be arranged and be putPlease email or contact usn Make sure that you will getIt may be possible to use title insurance into effect. with your enquiry. If youproper ownership of (title to) as a way to streamline some of thewould like us to email athe property.conveyancing. Title insurance can If you are depending on the salen Make sure that there are sometimes be used to complement of an existing property to buy thecopy of our digital propertyno planning conditions oror replace some elements of the legal new one, you need to make sure magazine to someone youparticularly harsh conditionswork by insuring against the risk ofthat you exchange contracts forknow, please email us withof ownership (for example an problems arising in the future. It is both properties at the same time,their details and well sendintrusive right of way) affectingmore commonly used on remortgageand agree the same completionthem a copy.the property.cases than on mortgages to buydate for both properties. 1415 9. RemortgagingRemortgagingThere's been a recovery in property prices since April last year which has left homeowners in a stronger position. Many may be in the best position to remortgage in more than two years, especially as lenders offer better rates to people with more equity. Remortgaging Lenders offering better ratesMany homeowners may be in their strongest position to remortgage in more than two years thanks to a recovery in property prices. There's been a recovery in property priceson your credit history and if there are, correctstill likely to have built up a significant amount since April last year which has left homeowners them as soon as possible. ensure all your debts of equity in their homes. in a stronger position. Many may be in theare registered to your current address and that best position to remortgage in more than twoyou are on the electoral register for that address. As for homeowners who bought recently, years, especially as lenders offer better rates toand who have seen any equity they had in people with more equity.Also, cut up and cancel any credit or store cards their properties eroded by falling prices, it is that you are not using. important not to panic. If a current mortgage Data from the Council of Mortgage Lenders Make sure you make the minimum payments ondeal is about to expire, the mortgage will (CML) shows that remortgaging accounted existing cards and try to avoid applying for tooprobably revert to the lender's standard for less than a third of all mortgage lending inmany new cards if you are likely to be rejected.variable rate (SVR). October 2009, the lowest it has been since the CML started recording data in 2002. Although poor credit histories account for aWith interest rates so low, a borrower may significant number of failed applications, they actually find that their lender's SVR is cheaper Remortgaging is where a home ownerare not the only reason why borrowers are than the rate they are currently on. renegotiates the terms of an existing mortgage. being turned down. A recent change of job can To make sure you maximise your chances of be a problem, and some lenders will require a securing a remortgage, it is more important The process simply involves redeeming anprobationary period of at least six months to havethan ever to have the correct documentation. existing deal and switching to a differentbeen served before considering an applicant.That means ensuring that you can provide lender that is offering a more competitive rate six months worth of original bank statements or better terms.Also, some lenders are rejecting applicants and wage slips, and your latest P60 tax form. based on a change in personal circumstances The key is to be prepared and to expect your If you want to remortgage you will find thatthat is perceived as putting extra strain on theirfinances to be scrutinised. lenders are being extremely picky about which income. For example, some lenders will look at borrowers they will lend to. Credit histories are the impact on affordability of a new addition If it is possible to secure a competitive fixed- now, more than ever, a crucial part of the lenders' to the family.rate deal then it may make sense to take future decision-making processes, and poor credit scores likely interest rate rises out of the equation and are the biggest cause of rejected applications. If a borrower is currently on an interest-onlyto fix now, before it is too late. mortgage, many lenders when assessing even borrowers in a strong financial position,affordability will apply their criteria using a Remember though, that there are generally with large deposits or a lot of equity in their capital and interest repayment basis. Where costs associated with remortgaging and these properties, are falling at the first hurdle.this occurs, it may mean that the borrowershould be factored into the equation. will have to increase the term of the mortgage If you have recently missed your credit cardto ensure affordability. Also, lenders are now payments, paid bills late, or made repeated failed applications for credit cards or unsecured much stricter on interest-only borrowers demonstrating they have a suitable repaymentNEEd MoRE personal loans, then this will have left aplan in place. INfoRMATIoN? footprint on your credit history, which will bePlease email or contact us with your picked up by lenders. How much equity you have within your enquiry. If you would like us to email a property is crucial. There are plenty of copy of our digital property magazine to It is important to check your credit score and if homeowners who have owned their propertiessomeone you know, please email us with it is poor then you need to start taking steps to for a number of years, and therefore despite improve it. Firstly, make sure there are no errorsthe price drops in the past 12-18 months, aretheir details and well send them a copy.16 17 10. News Buy-to-let.News New plans for borrowers We offer professional investorLandlords air Stricter scrutiny of mortgage applicationsadvice, essential when choosing their grievances All borrowers will face stricter scrutiny of their mortgage applications under new plans published by the Financial Services Authority (FSA). At the heart ofthe right mortgage deal. these proposals is a ban on self-certified mortgages, which do not require borrowers to prove their income. Survey reports dislike over adverse The FSA's chief executive, Hector Sants said: burdensome legislationSome of those who had been given home loans at the Providing investors with professional advice to make an Landlords have been airing theirproportion reaches 13 per cent when it height of the housing boom would not have been able to obtain them if these proposals had been in force. informed choice is what we do best. grievances over burdensome legislation and according to BDRCs latest quarterly comes to landlords with one property. The financial crisis has had a dizzying effect on the survey, Stamp Duty Land Tax and energyHowever, ePCs are equally unpopular with all UK economy, including the 1.23 trillion residential Performance Certificates (ePCs) are front private landlords; an ePC costs around 100 Whether youre a new or experienced investor, contact runners. The research agency found almost and can be valid for 10 years, although every mortgage market. Some borrowers have been able to ride out the crisis, but others have faced severe one in four landlords adverse to SDLT, andtime a property is put on the market, a new us to discuss your buy-to-let requirements. one in five to ePCs.certificate is required. difficulty making mortgage repayments. The situation could have been even worse if interest rates were not at a historic low. BDRC director, Mark Long, commentingMr Long concludes: Stamp Duty and ePCs during December: It may not be a surpriselack of popularity come from their ubiquity This raised questions as to whether people borrowed that Stamp Duty is so unpopular, its likelyand their thinly veiled revenue-raising by HM much more than they could ever afford, and whether to become even more disliked when the Revenue and Customs. lenders were irresponsible in granting those loans. holiday for properties under 175k comes to an end in January 2010.NEEd MoRE"We believe that irresponsible borrowing has been just Looking in more detail at the responses, INfoRMATIoN? as much a part of the problem in the mortgage market as irresponsible behaviour by firms. the study found significant differences in Please email or contact us with least popular legislation depending on a your enquiry. If you would The FSA review said: landlords portfolio size.like us to email a copy of our Stamp duty is less of an issue for professionaldigital property magazine to "Most consumers, of course, have acted responsibly, landlords (those with 20 or more properties) someone you know, please but a significant minority have made decisions whichemail us with their details andwere imprudent and which they should have been in a and while 7 per cent of all private landlordswell send them a copy.position to recognise as such in advance." would like to see the tax removed, the 19 11. ProtectionProtection Mortgage Payment Protection Insurance Taking steps to protect yourself against losing your home If you fall behind with yourSo it makes sense to try to keeppart of a mortgage "package", itIf so, you may decide to "top up" mortgage repayments and enough money in savings tois up to you whether you take the your existing cover (perhaps by cannot catch up again, you couldcover two months worth of MPPI offered with the mortgagetaking out the unemployment- eventually lose your home. Butmortgage payments, even ifor to buy it from elsewhere. If only element of MPPI), or you you can take steps to protect you have MPPI. There are some you already have a mortgage,may decide that you do not yourself against this risk by circumstances when MPPI willyou may be able to buy MPPI wish to take out MPPI at all. But taking out Mortgage Payment not cover you, for example, from your lender, or through an be very careful that you are not Protection Insurance (MPPI).unemployment caused byinsurance broker, or direct frombeing over-optimistic about your misconduct, or that you knewan insurance company. MPPI is ability to meet your mortgage Your questions answered was impending at the time usually cheaper (and the termsand other commitments if you you took out the insurance, ormay be more generous) if youdecide not to take out MPPI. Q: What is MPPI?sickness claims caused by certain take it out at the time you start A: Mortgage Payment Protectionpre-existing medical conditions.your mortgage, rather thanIf you decide not to take out Insurance (MPPI) pays yourleaving it until you have had yourMPPI cover, your lender or monthly mo rtgage paymentsQ: How does it work if I have a mortgage running for a while. intermediary may ask you to sign for a specified period if you joint mortgage with someone your confirmation that this is the suffer accident, sickness, or else? Q: What happens if I need todecision you have reached, after unemployment. Lenders and A: The MPPI can be set up so that claim?considering all the circumstances. insurers have agreed to adopt it covers both of you, usually by A: Your policy document willSigning this confirmation will certain minimum standards for allocating a proportion of thetell you how to claim. Usually, not affect the willingness of MPPI, so you can be confident MPPI to each person (e.g. 50/50 you need to obtain a claim form,your lender to try to help you if that the level of cover you will be or 60/40). If one person needscomplete it and send it to your you do not take out MPPI and offered meets or exceeds these. to claim, then the amount ofinsurer, together with some subsequently fall into arrears the benefit payment will be the evidence (such as a redundancywith your mortgage repayments Q: How does MPPI work?proportion of the MPPI allocatednotice) to support your claim. If at a later date. However, if you A: You pay a premium each month to that person. It is also possible you take a temporary job, thenhave MPPI or some other form while the mortgage is running.to allocate the MPPI on a 100/100 provided you let your insurer of protection, both you and your If you become unemployed, orbasis, so that 100 per cent of theknow beforehand, you canlender will have greater scope for unable to work due to accident or MPPI is paid, even if only one of interrupt a claim without havingdealing with payment difficulties. sickness, the policy starts to paythe joint borrowers loses their to pass the 60 day excess period out (usually direct to your lender) income. This type of arrangementagain when your temporary Source: Prepared by the CML to pay your mortgage. will generally require higher employment ends. and the Association of British premiums. Insurers, in consultation with the To keep the cost of the insurance Topping up government. down, there are some periodsQ: What if I am self-employed where you will not be covered or on a contract? Most people should consider (you should check the individualA: You will generally be able totaking out full MPPI, covering policy for exact details). The main take out MPPI even if you are the full amount of the mortgage ones are an "exclusion period" of self-employed or on a contract. But payments following accident, up to 60 days when you first take make sure you check the details ofsickness or unemployment, and out your policy, during which the circumstances in which you canthis is what you will generally be any claim for unemploymentmake an unemployment claim. offered in the first instance. But if would not be met (althoughyou already have other cover, such claims for accident or sickness Q: How do I buy MPPI? as accident or sickness cover from would be paid). In addition, thereA: If you are taking out a newyour employer, Income Protection NEEd MoRE is an "excess" or "waiting" period of up to 60 days for each claim, mortgage, you will probably be offered MPPI by your lender or or Critical Illness insurance, or substantial levels of savings, youINfoRMATIoN? during which no payments will the intermediary arranging your may decide that you do not needPLeASe CONTACT uS be made.mortgage. Unless the MPPI isthe full level of MPPI insurance.WITH YOuR eNQuIRY.2021 12. Legal matters News Independent deposit schemes Cost-cutting measures could undermine processProperty ownershipBuying a leaseholdThere are three types of ownership of propertyis the legal document which sets out the rightsn Who is responsible for maintaining the- freehold, leasehold and commonhold: and duties of both you (the leaseholder) and the shared areas of the building and whetherlandlord of the building (the freeholder). The that responsibility is shared in a fair way.n Houses are usually (but not always) lease will specify the number of years you arefreehold. This means that you own both theentitled to own the property. In most cases, a n If there is likely to be any major workproperty, and the land on which it is built,lease would start off lasting for 99 or 125 years, which you may have to pay towards, Landlords and tenants who rely onfor an unlimited period of time.but its length and value will decrease over time.for example re-roofing or painting the independent deposit schemes for the quick outside of the building. and fair settlement of disputes at the end of an Flats and maisonettes are usually (but notYou may have trouble getting a mortgage on a tenancy fear the process is being underminedalways) leasehold. This means that you ownproperty where the lease has less than 60 yearsn If you are a leaseholder of a flat in a block, because of cost-cutting measures.the property for a fixed period of time, andleft to run. However, you may be able to buy a you and the other leaseholders in the blockyou do not own the land on which it is built. new lease which adds more years to the timecan buy the freehold of the building if you The schemes were set up in April 2007 toleft running on the existing lease.meet certain conditions. This is known as provide an independent forum. It meansn Commonhold is a brand new system ofthe right to "enfranchise" and leaseholders that all private landlords and lettingownership for flats, but at the moment it Your conveyancer will check the details of the have this right even if the freeholder does agents are legally obliged to protecthas not yet become established and you arelease on the property including: not want to sell. tenants' deposits through one of threeunlikely to come across it. It is designed to recognised schemes.provide ownership of flats for an unlimited n The length of time the lease has left to run.period of time, and to make provisions for If landlords want to retain any part of the deposit at the end of a tenancy, for examplethe collective maintenance of the commonn The ground rent you will have to payNEEd MoRE to replace lost or damaged items, theyparts of a shared building. the landlord or freeholder, and any INfoRMATIoN? Residentialmanagement fee or service charge (to cover must show appropriate evidence. DisputesYour conveyancer needs to do extra legal work repairs and maintenance of shared parts)PLeASe CONTACT uS are decided by impartial adjudicators.if you are buying a leasehold property. The lease you will have to pay. WITH YOuR eNQuIRY. But the biggest of the schemes, Therental market Tenancy Deposit Scheme (TDS), has slashed its team of adjudicators from 70 to 12. And the cuts come at a time when demand for rented accommodation is rising.The National Landlords Association (NLA), the trade body representing 18,000 private Opportunities for new and existing investors in 2010 landlords, says the TDS is struggling under the workload and fears the quality ofAccording to the Association of Residential opportunities for new and existing investors decision-making could suffer.Letting Agents (ARLA), 2010 will provideand driving standards up.opportunities in the private rented sector The TDS receives 350 dispute cases each(PRS), in particular as availability of lending ARLA also predicts that throughout 2010 month. The two other schemes, Thebegins to increase while house prices are still standards will become an even greater Deposit Protection Service (DPS) and historically low, enabling timely investors toissue, as homeowners and landlords alike mydeposits both receive about 200 casespurchase properties for the buy-to-let market.are encouraged to make their homes energy a month. efficient. Yet without incentives like tax relief, itThe residential rental market will continue towill be difficult for an already struggling sector Tenants also have concerns about stabilise in 2010, with property oversupply to make the necessary improvements. adjudication standards, particularly as it isdecreasing due to reluctant landlords leaving their cash at stake at the end of a tenancy. the market. evidence of increasing sales in The Pre-Budget Report was a missed As the typical deposit on a private rented certain areas seems to indicate this trend. opportunity for the government to show its property is between one and two months commitment to the PRS the boiler scrappage rent, tenants say it is important to knowAs demand rises, in particular due to a lack scheme, for example, should include rental their cash is protected and they will get a fair of social housing, there will also be mountingproperties and be part of Landlords energy hearing if a dispute arises with their landlord. pressure on the sector to provide good qualitySaving Allowance (LeSA), says the ARLA.rental properties, says the ARLA.NEEd MoREThere has been little commitment from theNEEd MoRE INfoRMATIoN? government thus far on economic measures INfoRMATIoN?to help the wider industry meet property PLeASe CONTACT uS PLeASe CONTACT uSdemand, but increasing demand should WITH YOuR eNQuIRY. have a positive effect on the PRS, creating WITH YOuR eNQuIRY. 2223 13. Consumer matters Having problems paying your mortgage? Seeking help sooner rather than later is the key Are you having problems payingsickness. You may have taken If your lender intends to an arrangement youve made, your mortgage (or home purchase it out when you got your repossess your home you may find that it is easier for plan), or do you expect to have mortgage.the lender to repossess your these problems soon? Is your lender n Work out your budget n Speak to your lender as soonproperty. So if youre unsure trying to repossess your home? Its Be realistic, you may have to cutas possible attend the court hearing. best to act sooner rather than later. back on some other spending. If youve not tried to discussn Continue to talk to your lender This way, you may be more likely to n Check if State benefits can help possible repayment options with and still pay as much as you can keep your home. If youre on a low income or out them, do so now. It may meanBy continuing to pay back some of work you may be able to get you can avoid going to court. money, you may be able to If you can't meet your mortgage some help with your mortgage n Make sure youve worked out reduce your arrears. repayments, or you're worried repayments.your budget before you go you might fall behind, contactn Pay what you can to courtThings to avoid your lender as soon as possible.Only agree to pay back whatA judge will want to see hown Taking out a loan to pay your Alternatively, you may be able to you can afford. By continuingmuch you can afford to repay. debts, these loans can be very receive help with your mortgage to pay back some money,n Go to court expensive and are often secured from new government schemes.you may be able to reduceYou should attend so you can puton your home, so putting it at your arrears.your case to the judge. You are greater risk. If you can't pay your n Check what government help more likely to keep your home ifn Handing back the keys, youll still mortgage or think you'llis available you go to a court hearing. Thesebe responsible for the mortgage have problems Find out whether youre eligible for are normally held privately in therepayments before your home is a government-backed mortgage judges office, not in open court.sold, and possibly the outstanding n Speak to your lenderassistance scheme (it may allown Ask to see a duty officer at thebalance if the money raised by as soon as possible you to stay in your home). court before your case starts,selling your home isnt enough to They should talk through othern Sell your home if you dont have an adviser or pay off your debt. possible repayment options with If you think your situationsolicitor to represent youn Selling your home without having you. Make sure you understand wont change in the long term, A duty officer can help you witha place to live, your local council the different options so youthink about selling your homeyour case and may be able tomay not help you find a place make the right choice for you.yourself and renting or moving represent you. Their service is to live if they think you've made n Check if you have to a cheaper property. Ask free. yourself intentionally homeless. insurance cover your lender if you can stay in n Make sure you understand Mortgage Payment Protection your property until you sell the consequences of any Insurance (MPPI) or Accident, it and make sure you have aarrangements your lender offersNEEd MoRE Sickness and Unemployment insurance (ASU) can help with place to live before you move out. If this isnt possible, as ayou outside the court roomOnly agree to an arrangement INfoRMATIoN? your mortgage repayments if last resort you could sell yourwhich you can reasonably keep PLeASe CONTACT uS your income has fallen becausehome to a company and rent itto over the rest of the term of theWITH YOuR eNQuIRY. of redundancy, accident orback from them.mortgage. If you cannot keep to 242425 14. Property investorProperty investor Buy-to-let Investing in the private rented sector This guide is for people who are finding your tenantsyou will need to decide who will with would-be tenants. You mayrise, depending on the type of thinking of buying a property to rentYou will also want to think about manage it for you. find that your property is in need ofmortgage you have. with a buy-to-let mortgage and the type of tenant you are aimingan overhaul after a tenancy finishes. who may have little or no previous to attract. Are you hoping to attract If you manage it yourself, you willNaturally, you will have to finance thisWhat will your costs be? experience of investing in the private single people, or families, as they be responsible for:yourself. What is more, your propertyAs well as your mortgage rented sector. will have different requirements.is likely to be empty and you will notpayments, you will need to pay for:It is important to remember yourn Finding tenants. receive a rental income, while your It is not intended as a detailed guide,property should have features thatn Checking tenants references.property is being improved.n Buildings insurance. if you are thinking of purchasing aare attractive to would-be tenants, n Collecting the rent andn Consider contents cover, if your buy-to-let property you should seekrather than would-be purchasers.maintaining the property.Using a managing agentproperty is furnished. expert advice on legal, tax, financial n Dealing with problems. given the number of differentn Maintenance costs. and property management matters. Choosing your location responsibilities you face as an Periods when you are receivingYou should also look at how close the Your legal responsibilitieslandlord and the limitations onno rental income because the Buy-to-let is a form of residentialproperty is to local amenities such You will also need to be aware your own time, you may wish toproperty is empty or the tenants investment where you buy a as shops, transport and schools, andof your legal responsibilities as ause a managing agent to look afterhave fallen behind with their property, usually with the aid of aare these the type of amenities thatlandlord such as:your property for you. This will bepayments. mortgage, and rent it out. The 1988are important to your tenants? So, ifcalculated based on a percentage ofn Mortgage repayment increases Housing Act made investment in you are aiming to let your property ton Carrying out repairs.your monthly rental income.because of interest rate rises, residential property more attractive say a family with school-age children,n ensuring the safety of gas andwhich you may not be able to to landlords when it introduced ahow close the nearest schools are, will electrical appliances. Choosing a mortgagerecover immediately from rent new type of tenancy giving landlords be an important influence on wheren ensuring that the furniture andPaying for your propertyincreases. more control over their properties.they choose to rent.furnishings meet fire safety Obviously, when you choose a The increased availability of loans at requirements.property, you will need to askYour tax liability attractive rates of interest for buy-to- Choosing your propertys yourself how much you can affordBefore you can calculate what let purchasers has also increased thesize and conditionYou should also consider to pay, and how you will pay foryour income from your property appeal of owning rental property.equally, you should think carefully familiarising yourself with landlord it? If you take out a mortgage, youwill be after taking into accountabout buying a property whose and tenant law, to understand your should work out what percentage ofall necessary expenditure, you When you buy a property to let size is attractive to householdsresponsibilities as a landlord, andthe value of the property you needshould recognise that the profits out, you are becoming a landlord.looking for rented accommodationthe rights your tenants enjoy. This is to borrow. The size of the loan isfrom renting property are taxable. And owning investment property in that location. As well as the size,an area you may wish to take legal usually linked to the expected rentalHowever, you will be able to offset is not like owning your own home.type and location of your property, advice about.income. As a guide, your lender maysome of the costs you incur as a Instead you are effectively runningwhat about its condition? Have you expect your monthly rental incomelandlord against tax. a small business.assessed whether the property willWhen your property is emptyto be between 25 per cent to 50require expensive maintenance.You should remember there may be per cent greater than your monthlyYou will have to pay the following Before you choose a property and generally speaking, older homes periods when you are unable to findmortgage payments.taxes: arrange the finance to purchaserequire more attention. tenants for your property and it will be it, there are a number of factorsempty, with no rental income comingYour choice of mortgagen Income tax. you should look into, which areChoosing a property you in. Obviously you will still be expected When you choose a mortgage, yourn Stamp Duty when you buy described below. can afford. to continue repaying your mortgage choice will be between a repaymentyour property on values aboveObviously, the size of mortgage so you will need to think aboutmortgage or an interest-only loan.125,000. Choosing a propertyyou can afford will have a majorhow you will meet your mortgageWith an interest only mortgage, somen Capital gains Tax when you sell it. Researching your marketinfluence on the size and locationrepayments in these circumstances. lenders may require you to have a You should carefully research theof your property. Choosing aThis could particularly apply if you suitable investment product. If you market where you want to buy yourmortgage is described in more choose a property in an area where have a repayment mortgage, some property. You can either do this detail in the section below. Andthe supply of rental property exceedslenders may also advise you to arrange yourself or employ a specialist lettingfinally, in considering how muchdemand from tenants. life insurance alongside your loan. agent to help you find the area andto spend on a property you You may be able to choose between property you are looking for. If you should bear in mind that as well as Maintaining your propertyfixed rate and variable rate mortgages. research the market yourself, youincreasing in value, your propertyAs well as managing your property, Fixed rate loans will give you some will need to gather informationcan also fall in value. you will be responsible forcertainty about your mortgage NEEd MoRE from estate agents, local papers,maintaining it. Besides repairs andrepayments whilst variable rate loans INfoRMATIoN? local employers and even the local Managing your propertyregular maintenance, properties cancould move up or down. You should authority, about the demand for andYour responsibilities benefit from routine improvementsalso remember that your mortgage PLeASe CONTACT uS supply of, rented housing. When you have chosen a property,which maintain their attractivenesspayments could rise if interest rates WITH YOuR eNQuIRY.2624 27 15. Glossary Glossary A to Z property and mortgage terms Assisting you to buy property, sell property and finance your mortgage The terms in this glossary are disbursements Interest often used in the house buying orThe fees, such as stamp duty andThe money you are charged forRetention mortgage process.Land Registry fees, which you pay borrowing. When the lender holds back someto the conveyancer.of the mortgage money until AdvanceLand Registry feecertain repairs have been done, the The mortgage loan. Early redemption fee/ early A fee paid to the Land Registry to amount held back is known as arepayment chargeregister ownership of a property.'retention'. Bridging loanThe charge some lenders make if a A short-term loan to bridge themortgage is paid off early. LeaseSecurity period between you buying a newA legal contract which gives The property the mortgage is property and selling your previous Equitythe ownership of a leasehold being used to buy is the lender's home.The total value of your property, property to the buyer for a fixed'security' for the loan. This meansless the amount of the mortgage.period of time.that the lender has rights over Building survey the property. If the mortgage An extensive survey, carried out Exchange of contracts Leaseholderrepayments are not kept up to by a qualified surveyor, to identify The point where the property sale Someone who owns a property, date, the lender can repossess the faults and potential problems in becomes legally binding.but not the land it stands on, for a property and sell it to recover the the property you are buying. fixed period of time.debt.freeholder CapitalSomeone who owns a property Mortgage Stamp duty The amount you have borrowed and the land it stands on.A loan to buy a property. TheA government tax on buying on the mortgage, and on whichproperty acts as security for theproperties costing more than interest is charged. Ground rent loan and so can be repossessed 125,000.A yearly fee leaseholders have to and sold if the mortgage Completion pay to the freeholder or landlord repayments are not made. Subject to survey and contract When you become the legal ownerwho owns the land the leaseholdWording included in any of the property. property is on. Mortgage application feesagreement before the exchange ofThese are fees charged by thecontracts. This wording allows the Contract High lending fees lender to organise the mortgageseller or buyer to withdraw from The legal document which transfers Not all lenders charge these, but iffor you. These are not usually the property sale. the ownership of the property from you borrow a high percentage of refunded if you then do not go the seller to the buyer. the price of the property, you mayahead with the mortgage. SomeTerm assurancehave to pay this type of fee. This is lenders will only charge such fees Life insurance to pay off a Conveyancerbecause the mortgage represents for specific mortgage deals. mortgage if the borrower dies. A solicitor or licensed conveyancera higher risk to the lender if you who does the legal work involved do not keep up your repayments. Mortgage deedTitle deeds in selling and buying property.Lenders sometimes buy insurance The legal agreement whichThe legal documents which set out(called mortgage indemnity) togives the lender a legal right tothe ownership of a property. Conveyancing protect themselves. This insuranceproperty. The legal work involved in selling does not protect you and you Valuation and buying property. would still be responsible for your Mortgage termThe lender's inspection of thedebt, even if the lender claimed on The length of time over which theproperty to assess whether it is Credit reference agencyits insurance.mortgage will be repaid. suitable for a mortgage. An organisation that keeps details of individuals and their Home-buyer's report offer of advance credit histories. Lenders will A surveyor's report on a property.The formal offer of a mortgageNEEd MoRE check with a credit referenceThis type of survey is less from a lender.INfoRMATIoN? agency to see if someone extensive than a full buildingPLeASe CONTACT uS applying for a mortgage has anysurvey but more extensive thanRedemption known credit problems. the lender's valuation. The paying off of a mortgage loan.WITH YOuR eNQuIRY. 282429 16. Market view Strong interest from buyers Demand is still outstripping supply A modest increase in the number of properties coming up for sale is having little effect on the housing market, as prices continue to rise, says the Royal Institution of Chartered Surveyors (RICS) uK Housing Market survey.A modest increase in the number of properties Chartered Surveyors agreed that prices wereremaining strong against subdued levels of coming up for sale is having little effect on the rising, up from 34 per cent in October last year.instructions and as such, prices are rising housing market, as prices continue to rise, saysTransaction levels remained broadly constant most rapidly. the Royal Institution of Chartered Surveyorswith sales per surveying firm hovering around (RICS) UK Housing Market survey.19 over the past three months. But with theThe survey points towards prices rising, even inventory of property on the market falling, the though the general state of the economy For the sixth consecutive month, more closely watched sales to stock ratio, a measure of would suggest that the housing market should Chartered Surveyors are reporting that themarket slack and a lead indicator of future prices,not be faring as well as it is. Despite modest number of new instructions is increasinghas climbed a little further. It has now risen for increases in the number of properties coming rather than falling. However, demand is still the past 12 months and stands at 31 per cent.on to the market, it is clear that this is not outstripping supply with 28 per cent moresignificant enough to keep pace with the levels surveyors stating that enquiries from potential Although the latest survey provides furtherof demand. Buyer enquiries are continuing to purchasers are rising rather than falling. This evidence that key indicators continue to improve,grow and 2010 should see a further wave of figure is slightly down on previous months, but the pace of these improvements does appear tointerest in the market. still indicates strong interest from buyers.be slowing. 28 per cent of Chartered Surveyors believe that prices will continue to rise rather than The supply demand imbalance has been thefall over the next three months; this is slightlyNEEd MoRE main factor influencing prices and, unsurprisingly, for the fourth month in a row the majority of down form 31 per cent on the previous survey.INfoRMATIoN? surveyors are again reporting rising rather thanLondon and the South east continue to be the PLeASe CONTACT uS falling prices. A net balance of 35 per cent of most buoyant regions with buyer enquiriesWITH YOuR eNQuIRY. YoUR PRoPERTY MAY BE REPoSSESSEd If YoU do NoT kEEP UP REPAYMENTS oN YoUR MoRTGAGE. Content of the articles featured in this publication is for your general information and use only and is not intended to address your particular requirements or constitute a full and authoritative statement of the law. They should not be relied upon in their entirety and shall not be deemed to be, or constitute advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles. The FSA does not regulate commercial lending and some forms of buy to let mortgages. Your property may be repossessed if you do not keep up repayments on your mortgage.Articles are copyright protected by goldmine Media Limited 2010. Terms and conditions apply. Unauthorised duplication or distribution is strictly forbidden.