This is to do with both this Government's and Europe's response to the threat of terror from extremists and the requirements are covered in legislation for proceeds of crime and money laundering.
In brief, criminals use various ways to convert cash received from criminal activities (for example sale of drugs or robberies) to money that has no trace of criminality, for example it being invested in property.
It is because of this activity that, in particular, property lawyers enquire as to proof of identification and address. In addition, many lawyers now also carry out electronic checking to ensure that the information is correct, having regard to the fact that identity theft is now becoming common.
If a client is unable to provide any proof of address or identification then it is highly unlikely that a lawyer will agree to represent you in respect of the property transaction.
The type of identification typically required is a valid passport and driving licence and, for address, two utility bills or a council tax demand. The documents mentioned here are not an exhaustive list but are provided in order for you to be aware of the amount of information an expert property lawyer will require before agreeing to act for you for a sale or purchase of UK property.
I am sure there are as many questions unanswered here as I have answered so feel free to visit my website at any time.
Reg
Friday, 30 May 2008
Tuesday, 27 May 2008
Where Are The First Time Buyers? Part 2
Well over the weekend yet more negative news from the media regarding the UK Property Market and in particular the London Property Market where it is stated as factual that prices are still dropping. While it may be true overall it is not true when looking in some areas of London where prices are stable.
So how does this affect the First Time Buyer?
You will have read from my earlier blogs that I do not believe that buyers when looking to purchase a property must first of all be concerned as to price. In my view the property is first and foremost somewhere to live and only secondly as part of a long term strategy an investment since everybody knows that property values go down as well as up.
On this basis it is still wise to purchase a property since mortgage payments at the present time are still lower than most people will pay in rent.
So on the assumption that you are proposing to buy a property it is important that you also understand that the process can take on average eight to twelve weeks to be finalised and in the case of leasehold property even longer.
After you have negotiated the purchase price your lawyers start working on raising questions about the property from your sellers through their lawyers and other agencies including the local authority. In addition they will deal with the contract checking progress on your mortgage and preparing the purchase documents including a transfer. It is only when all the information has been obtained that matters can progress to exchange of contracts.
On exchange the completion date is agreed which is usually ten working days from exchange to allow sufficient time to deal with last minute searches and questions which may arise on the mortgage.
On the completion day access is usually available from midday and in the event that either you or your seller fails to complete for whatever reason compensation will be payable by the defaulting party.
In my next blog I will attempt to give a brief overview of why Identification and proof of address is now needed on all property transactions in the UK
So how does this affect the First Time Buyer?
You will have read from my earlier blogs that I do not believe that buyers when looking to purchase a property must first of all be concerned as to price. In my view the property is first and foremost somewhere to live and only secondly as part of a long term strategy an investment since everybody knows that property values go down as well as up.
On this basis it is still wise to purchase a property since mortgage payments at the present time are still lower than most people will pay in rent.
So on the assumption that you are proposing to buy a property it is important that you also understand that the process can take on average eight to twelve weeks to be finalised and in the case of leasehold property even longer.
After you have negotiated the purchase price your lawyers start working on raising questions about the property from your sellers through their lawyers and other agencies including the local authority. In addition they will deal with the contract checking progress on your mortgage and preparing the purchase documents including a transfer. It is only when all the information has been obtained that matters can progress to exchange of contracts.
On exchange the completion date is agreed which is usually ten working days from exchange to allow sufficient time to deal with last minute searches and questions which may arise on the mortgage.
On the completion day access is usually available from midday and in the event that either you or your seller fails to complete for whatever reason compensation will be payable by the defaulting party.
In my next blog I will attempt to give a brief overview of why Identification and proof of address is now needed on all property transactions in the UK
Thursday, 22 May 2008
Where are the first time buyers ?
Yesterday I promised to post information and advice for the first time buyer in the UK Property Market
Well today has almost finished and here I am writing when everyone else is thinking of going home
It appears to me that generally the first time buyer is the most uninformed of all people involved in the property market and therefore the most likely to be open to all kinds of pressures from so called property experts who have little or no experience in the marketplace . The result of this is that they are prone to all the stress that this type of transaction can bring.
Typically the first time buyer is purchasing leasehold property that is full of pitfalls for the unwary . It is also one of the most complicated forms of property purchase because invariably not all of the documentation is in one place and rarely will it be contained in the HIP (Home Information Pack) that is provided by the seller of the property. It is my experience that a higher than average proportion of these type of transactions fall through either because of lack of information or defective leases.
So having said all this what is the best time for the buyer to instruct a property lawyer?
It is usually best to discuss the proposed transaction with a lawyer before becoming involved in any negotiations for the purchase as advice can then be given as to cost ,projected timescales and most importantly of all assistance with the negotiations. The earlier you instruct the easier you will find the process as only your lawyer has your best interests at heart.
In the present property market there is a degree of uncertainty both as regards whether the property values will continue to fall and also whether the first time buyer can borrow sufficient to proceed with the purchase. It is my belief that now is a good time to buy as what you pay in rent can be used instead on a mortgage however because property values can fall as well as increase the purchase has to be viewed long term and on the basis that it is a home for you to live in . Lenders have varying criteria but certainly at the moment first time buyers must have a minimum of a 10% deposit in order to be able to proceed.
Tomorrow I will answer a few questions as to how long will it take and what happens if you do not complete on the purchase
Reg
Well today has almost finished and here I am writing when everyone else is thinking of going home
It appears to me that generally the first time buyer is the most uninformed of all people involved in the property market and therefore the most likely to be open to all kinds of pressures from so called property experts who have little or no experience in the marketplace . The result of this is that they are prone to all the stress that this type of transaction can bring.
Typically the first time buyer is purchasing leasehold property that is full of pitfalls for the unwary . It is also one of the most complicated forms of property purchase because invariably not all of the documentation is in one place and rarely will it be contained in the HIP (Home Information Pack) that is provided by the seller of the property. It is my experience that a higher than average proportion of these type of transactions fall through either because of lack of information or defective leases.
So having said all this what is the best time for the buyer to instruct a property lawyer?
It is usually best to discuss the proposed transaction with a lawyer before becoming involved in any negotiations for the purchase as advice can then be given as to cost ,projected timescales and most importantly of all assistance with the negotiations. The earlier you instruct the easier you will find the process as only your lawyer has your best interests at heart.
In the present property market there is a degree of uncertainty both as regards whether the property values will continue to fall and also whether the first time buyer can borrow sufficient to proceed with the purchase. It is my belief that now is a good time to buy as what you pay in rent can be used instead on a mortgage however because property values can fall as well as increase the purchase has to be viewed long term and on the basis that it is a home for you to live in . Lenders have varying criteria but certainly at the moment first time buyers must have a minimum of a 10% deposit in order to be able to proceed.
Tomorrow I will answer a few questions as to how long will it take and what happens if you do not complete on the purchase
Reg
Information For First Time And Other Buyers
Well as promised I am going to speak to the first time buyer today and attempt to answer what I am sure are the many questions they have before venturing into the scary world of the UK Property market.
Generally the first time buyer is unsure whether to find the property they wish to buy or to discuss their proposed purchase with a lawyer first.
I believe it's always worthwhile discussing with and instructing a Lawyer before you enter into the property market as they are able to advise on a number of issues including how to negotiate and obtain the best price in the current property market
One of the things which prevent this is the wrong assumption that instructing a Lawyer can be expensive. This is untrue since many Lawyers have schemes in place which can limit your exposure to such expense.
The other concern is how much can you borrow. This is a question properly addressed to a lender however we have a mortgage broker who can give advise on this if we were instructed. It has to be acknowledged that lenders have differrent criteria and lending multiples so it can only be carried out on a case by case basis.
In the current property market a buyer will need a minimum of ten percent deposit available for exchange of contracts which is usually six to eight weeks from offering on the property.
During the period from offer to exchange the lawyer will be raising questions and searches relevant to the property checking the contract together with the mortgage and in respect of the best law firms preparing the purchase documents for signature. Once all these matters have been finalised a written report is given and the buyer is invited to sign.
The transaction is then ready to exchange when a completion date is agreed usually ten working days from exchange as this is the minimum period to safely be sure that mortgage monies can be released and any further questions arising from post exchange searches can be answered.
It is normal on the day of completion to aim for entry into the property at midday and if the matter fails to complete then compensation is paid by the defaulting party.
I have previously said that now is a good time to be investing in property as it is generally cheaper paying a mortgage than rent and is a good long term investment.
If there are any questions please feel free to post here
Reg
Generally the first time buyer is unsure whether to find the property they wish to buy or to discuss their proposed purchase with a lawyer first.
I believe it's always worthwhile discussing with and instructing a Lawyer before you enter into the property market as they are able to advise on a number of issues including how to negotiate and obtain the best price in the current property market
One of the things which prevent this is the wrong assumption that instructing a Lawyer can be expensive. This is untrue since many Lawyers have schemes in place which can limit your exposure to such expense.
The other concern is how much can you borrow. This is a question properly addressed to a lender however we have a mortgage broker who can give advise on this if we were instructed. It has to be acknowledged that lenders have differrent criteria and lending multiples so it can only be carried out on a case by case basis.
In the current property market a buyer will need a minimum of ten percent deposit available for exchange of contracts which is usually six to eight weeks from offering on the property.
During the period from offer to exchange the lawyer will be raising questions and searches relevant to the property checking the contract together with the mortgage and in respect of the best law firms preparing the purchase documents for signature. Once all these matters have been finalised a written report is given and the buyer is invited to sign.
The transaction is then ready to exchange when a completion date is agreed usually ten working days from exchange as this is the minimum period to safely be sure that mortgage monies can be released and any further questions arising from post exchange searches can be answered.
It is normal on the day of completion to aim for entry into the property at midday and if the matter fails to complete then compensation is paid by the defaulting party.
I have previously said that now is a good time to be investing in property as it is generally cheaper paying a mortgage than rent and is a good long term investment.
If there are any questions please feel free to post here
Reg
Wednesday, 21 May 2008
Buy to let in the UK property market
I was recently asked by a customer a series of questions regarding buying to let a UK property and, with this blog, I hope that I will be able to answer many of the questions that concern potential investors about this particular market.
A buy to let is usually an investment or second property, purchased with the sole aim of it being rented out so that the investor recovers a rent plus, in a rising market, an increase in the value of the property. In a falling market, which we are experiencing at the moment, the return on the investment is likely to be an increased rent.
The procedures are very similar to an ordinary purchase, although if a leasehold property is proposed to be purchased, then the lease will need to be checked very thoroughly, since quite often there are restrictions against letting the property or parting with occupation of it.
It is usual, when looking to enter into this market, to raise the deposit against an existing residential property, however, it is important that each transaction is looked at on its merits, as it is sometimes possible to raise all of the money against the property being purchased for letting purposes. If the investor is building a portfolio of properties, it is also possible to raise money against that portfolio, rather than on individual properties. However, expert advice must always be sought, particularly as buy-to-let mortgages are not regulated in the same way as residential mortgages and the lending criteria is different. In particular, it is likely that the mortgage rate will be higher than for a normal residential property as they are treated as commercial investments.
It is also important for the buy-to-let investor to have appointed, perhaps, their own accountants, since there are various tax implications, particularly, capital gains tax and a specialist accountant can advise on tax mitigation arrangements.
When acquiring these type of properties, it is important that a correct tenancy agreement is entered into, ensuring that you are able to comply with the tenancy deposit schemes that are available and also, if the premises are to be let furnished, that the relevant experts are appointed for the inventory check in and check out.
It is important to obtain correct advice on these types of transactions as there are many pitfalls for the unwary.
Tomorrow I am proposing to give advice to first time buyers, particularly regarding the process in how to negotiate in the UK property market.
Reg
A buy to let is usually an investment or second property, purchased with the sole aim of it being rented out so that the investor recovers a rent plus, in a rising market, an increase in the value of the property. In a falling market, which we are experiencing at the moment, the return on the investment is likely to be an increased rent.
The procedures are very similar to an ordinary purchase, although if a leasehold property is proposed to be purchased, then the lease will need to be checked very thoroughly, since quite often there are restrictions against letting the property or parting with occupation of it.
It is usual, when looking to enter into this market, to raise the deposit against an existing residential property, however, it is important that each transaction is looked at on its merits, as it is sometimes possible to raise all of the money against the property being purchased for letting purposes. If the investor is building a portfolio of properties, it is also possible to raise money against that portfolio, rather than on individual properties. However, expert advice must always be sought, particularly as buy-to-let mortgages are not regulated in the same way as residential mortgages and the lending criteria is different. In particular, it is likely that the mortgage rate will be higher than for a normal residential property as they are treated as commercial investments.
It is also important for the buy-to-let investor to have appointed, perhaps, their own accountants, since there are various tax implications, particularly, capital gains tax and a specialist accountant can advise on tax mitigation arrangements.
When acquiring these type of properties, it is important that a correct tenancy agreement is entered into, ensuring that you are able to comply with the tenancy deposit schemes that are available and also, if the premises are to be let furnished, that the relevant experts are appointed for the inventory check in and check out.
It is important to obtain correct advice on these types of transactions as there are many pitfalls for the unwary.
Tomorrow I am proposing to give advice to first time buyers, particularly regarding the process in how to negotiate in the UK property market.
Reg
Tuesday, 20 May 2008
Frequently Asked Questions
Well good afternoon everyone. The time has come for me to start answering some of the questions I am getting asked by clients and others relating to the process of buying and selling in the UK Property Market.
Q What is a HIP?
This is a document required before you can sell a property. It has been imposed on sellers by the Government . The document is now required on all properties that are being sold and contains information that a buyer needs to proceed to purchase the property.
Q Who has to provide a Hip?
The seller of a property is ultimately responsible to purchase the HIP usually through their Lawyer who is best placed to ensure the correct documents are contained in it and that it complies with the relevant legislation. In some cases it is obtained through the selling agent but in my experience this usually delays the selling process as they are unable to provide a compliant HIP to the sellers and Buyers Lawyers. The seller is also responsible to pay for the HIP .
Q What is included in a HIP?
The following documents are usually included
Local Search-Drainage and Water Search-Office Copies of the Sellers Title-Index-Brief details of the property including the sellers name-Energy Performance report. Other documents that can be included but rarely are :- replies to enquiries/property information form-fixtures list and other usual searches
QWhy do I need a HIP and How much does it cost?
In real terms the only reason why a Hip is required is because the Law says so although the only piece of information that is not usually obtained by a Lawyer is the Energy Performance certificate. You must expect to pay upwards of £300.00 for the HIP.
Q If I am provided with a HIP do I need further information?
Whether you are a seller or a buyer the information contained in the HIP is only very basic usually including a personal search which is rarelly acceptable to the buyers Lawyers. You will still need answers to preliminary questions and written details of what is included in the price for the property.
You can see from the above that it is therefore very important that a Specialist Property Lawyer is appointed either before you market your propertyor if you are a Buyer before you finalise your offer to the seller in order that any problems are resolved at the earliest opportunity.
I hope you have found the above informative and I will answer another question tomorrow on Buying to Let
Q What is a HIP?
This is a document required before you can sell a property. It has been imposed on sellers by the Government . The document is now required on all properties that are being sold and contains information that a buyer needs to proceed to purchase the property.
Q Who has to provide a Hip?
The seller of a property is ultimately responsible to purchase the HIP usually through their Lawyer who is best placed to ensure the correct documents are contained in it and that it complies with the relevant legislation. In some cases it is obtained through the selling agent but in my experience this usually delays the selling process as they are unable to provide a compliant HIP to the sellers and Buyers Lawyers. The seller is also responsible to pay for the HIP .
Q What is included in a HIP?
The following documents are usually included
Local Search-Drainage and Water Search-Office Copies of the Sellers Title-Index-Brief details of the property including the sellers name-Energy Performance report. Other documents that can be included but rarely are :- replies to enquiries/property information form-fixtures list and other usual searches
QWhy do I need a HIP and How much does it cost?
In real terms the only reason why a Hip is required is because the Law says so although the only piece of information that is not usually obtained by a Lawyer is the Energy Performance certificate. You must expect to pay upwards of £300.00 for the HIP.
Q If I am provided with a HIP do I need further information?
Whether you are a seller or a buyer the information contained in the HIP is only very basic usually including a personal search which is rarelly acceptable to the buyers Lawyers. You will still need answers to preliminary questions and written details of what is included in the price for the property.
You can see from the above that it is therefore very important that a Specialist Property Lawyer is appointed either before you market your propertyor if you are a Buyer before you finalise your offer to the seller in order that any problems are resolved at the earliest opportunity.
I hope you have found the above informative and I will answer another question tomorrow on Buying to Let
Monday, 19 May 2008
Is the UK Property Market in Decline
Well I hope you have all had a restful weekend
The uk property market continues to be at the forefront of the news particularly the failed HIPs discussions and how we might improve the process of buying and selling property in the uk.
I had an interesting discussion over the weekend with someone not closely involved in this market and it became very clear that their opinion was that Government interference in the free market of property selling had contributed largely to the problems now being faced by consumers wishing to sell in the UK Market.
While it was accepted that electronic conveyancing was available it appears that it is being slowed by the raft of regulations with which Lawyers have to comply before ever accepting instructions and thereafter then complying with mortgage companies requirements has left Lawyers floundering in red tape. Not surprisingly the market has slowed.
In order to redress the balance Lenders must be more relaxed as regards there needs and the Government must ammend planning and other regulations in order to ensure that information is available from one source.
I hope to be able during the course of my next few posts to provide further comments on how the UK Property market can be improved
Reg
The uk property market continues to be at the forefront of the news particularly the failed HIPs discussions and how we might improve the process of buying and selling property in the uk.
I had an interesting discussion over the weekend with someone not closely involved in this market and it became very clear that their opinion was that Government interference in the free market of property selling had contributed largely to the problems now being faced by consumers wishing to sell in the UK Market.
While it was accepted that electronic conveyancing was available it appears that it is being slowed by the raft of regulations with which Lawyers have to comply before ever accepting instructions and thereafter then complying with mortgage companies requirements has left Lawyers floundering in red tape. Not surprisingly the market has slowed.
In order to redress the balance Lenders must be more relaxed as regards there needs and the Government must ammend planning and other regulations in order to ensure that information is available from one source.
I hope to be able during the course of my next few posts to provide further comments on how the UK Property market can be improved
Reg
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