Top Tips to Remember When You Buy Property in London

Buying property in London raises many questions. If you are interested in residential Prime Central London property for sale, such as Mayfair real estate, we have the answers for you.

 Is a survey necessary when purchasing a property?

As part of raising finance, mortgage lenders will instruct a valuation survey to be carried out on the property you are purchasing. Even if you do not require lending, we strongly recommend that you have an independent chartered surveyor carry out your own private survey.

What about a solicitor?

You will need to appoint a solicitor to act on your behalf to carry out the conveyancing, as well as to liaise with your mortgage lender if you are raising finance on the property.

Do I need building insurance?

It is advisable to have insurance in case your home is damaged and needs to be repaired. Although not compulsory, insurance should be a top priority when you buy property in London.

When purchasing a property, it is also usually a condition of your mortgage lender to have insurance in place. Similarly, if you are purchasing a leasehold property, under the terms of your lease there may be a requirement to have insurance in place.

What is a ‘Leasehold’ vs a ‘Freehold’?

If you own the freehold to a building, it means that you own not only the building itself, but also the land on which the building stands on outright, in perpetuity. If you own a leasehold property, under certain circumstances you may be entitled to purchase a ‘Share of Freehold’. This way, you become part-owner of the freehold. This is typically offered in the form of shares under a company structure.

More often than not however, it is common in Prime Central London property for sale to be offered as ‘leasehold’ which means you own the property for a fixed period of time under the terms of a lease.

Will I be able to extend my lease or purchase the freehold?

Although ownership of a property returns to the landlord once the lease comes to an end, under the ‘Leasehold Reform Housing and Urban Development Act of 1993’, as long as you meet certain criteria, you may be able to extend your lease by an additional 90 years. However, there is a premium to pay for this privilege.

In apartment blocks where there are different leaseholders, tenants have a legal right under the Act to buy the freehold of their building together if they meet certain qualifying criteria. This is known as ‘collective enfranchisement’. In certain cases, it is possible for leaseholders to negotiate with the freeholder directly to buy the freehold.

What is Stamp Duty?

For residential purchases, Stamp Duty Land Tax (SDLT) is a property tax on transactions over £125,000 in England, Wales and Northern Ireland, with the tax due calculated on a tiered basis.

It is recommended that purchasers take professional advice from a qualified financial advisor.

What is Exchange & Completion?

Exchanging contracts is a legally binding stage of home buying property in London. Completion is the date when you are able to take full ownership and move into your new property. Upon completion, your solicitor will arrange for the final payment of funds to be transferred to the seller’s solicitor.

Leave a Reply