First-time Homes buyers...During the conveyancing process your solicitor will obtain a considerable amount of detailed information but before you commit to buying, you should find

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■Step-by-step guide to buying your first home

■Legal jargon buster

■Freehold vs leasehold

Homes&Property

EVENING STANDARD THURSDAY 22 FEBRUARY 2018 3

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‘With a baby planned, we needed our first home to be a house’

Do your homework, says residential property lawyer Fiona McNulty, before you commit to making the biggest purchase of your life

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Low deposit: the Browns raised the five per cent payment required for Help to Buy

Double whammy: Sarah and Oliver Brown reserved a house the weekend they discovered a baby was on the way

THE two main types of interest in land in England and Wales are freehold and leasehold. If you are intending to buy a house, generally it is likely to have a “freehold title”. Most flats are leasehold.

WHAT IS FREEHOLD?This is the best class of title available and means that you have outright ownership of the land and property on it. There is no time limit on the period of ownership. The only restrictions are planning laws and any covenants and obligations affecting the title. If you own the freehold interest in a property then you can grant a leasehold interest in it to someone else.

WHAT IS LEASEHOLD?This is an interest in land or property for a specific period of time. The freeholder (also known as the landlord) grants a lease to the tenant (also known as the lessee), for a fixed term. Leases can vary in length but are generally granted for 99, 125

or 999 years. At the end of the term the lessee no longer has a right to occupy the property and so possession of the property reverts to the landlord.

In practice what happens is that before the lease ends, the lessee will either agree an extension of the term of the lease with the landlord, or if they cannot, there are statutory procedures that the lessee may use to extend the lease.

The parties to a lease will be the landlord, the lessee and often a management company. Leases for residential property are usually lengthy and complex documents although the basic principle is the same.

The aim is to ensure that in return for the lessee paying the rent and service charge and observing the covenants and obligations contained in the lease, the landlord agrees to grant to the lessee the property for the term specified in the lease and with the benefit of the various rights set out in the lease.

Leasehold v freeholdWHETHER you buy a h o u s e o r a f l a t depends as much on what you can afford and what is available

for sale, as it does on your personal preferences and requirements.

FLATS MEAN SHARINGIf you don’t like sharing stairs, entrance halls, bin stores and so on, a flat may not be for you. Most flats are leasehold and, should you buy one, the terms of the lease will set out the landlord’s obli-gations and also your obligations as the lessee.

It is important at the outset to estab-lish basic facts about the flat and the management of the building it is in. During the conveyancing process your solicitor will obtain a considerable amount of detailed information but before you commit to buying, you should find out:

How many years the lease has left to run — ie the unexpired term.

The current ground rent and service charge payable and how the rent increases during the term of the lease.

The restrictive covenants — for example, are pets are allowed in the flat? If you have a dog and only find out that dogs are prohibited just before

exchange of contracts you could waste time and an awful lot of money.

Who owns the freehold? And find out about the management of the build-ing. For instance, a flat may be sold with a share of freehold. This means that the freehold is owned by a com-pany and all the flat owners have a share or are members of the company and so have a say regarding the upkeep

and maintenance and repair of the building. You can always ask to see a copy of the lease.

HOUSES COME WITH RULES, TOOIn general, houses are freehold but they may nevertheless be subject to cove-nants and obligations. If you intend to refurbish, alter or extend the house, do check whether there are any restrictive covenants in place that might hinder your plans. If the property is in a bad state of repair, consider the extent and likely cost of the repair works needed and budget accordingly.

Houses can be leasehold and in some areas leasehold houses have been around for many years. Developers have recently been selling leasehold new-build houses, some of which have ground rents linked to the rate of infla-tion or which double every five, 10 or 20 years. This means that the rent pay-able during the term of the lease can run into tens of thousands of pounds.

This tends to reduce the value of the house on resale. Some mortgage lenders may not want to get involved where there is an escalating ground rent. Find out about the rent as soon as possible and before you commit to buying. The Government announced a ban on new leasehold houses in December.

More space and a place of your own: investigate lease terms if you buy a flat and restrictive covenants if you go for a house

Tough call: choosing between a flat or a house isn’t just a question of finance

IN ONE life-changing weekend last summer Sarah and Oliver Brown found out they were expecting their first child — and reserved their first home together.

Their daughter is due any minute and she will be coming home to a new three-bedroom house at Oakley Grange, Crest Nicholson’s development in the village of Headcorn, near Maidstone in Kent.

The couple moved into the £385,000 property in August, which has given them plenty of time to get a nursery ready for the new arrival.

It took the Browns three years to save for a deposit — with a little help from Oliver’s mother — and they also took advantage of the Government’s Help to Buy scheme which meant they “only” needed a five per cent down payment of £19,250.

“Without Help to Buy we wouldn’t have been able to afford to step on

to the property ladder,” says Sarah, 32, an area manager for a care company.

The couple could have put their money towards a small London flat

instead. This would have been convenient for Oliver, whose job with a market research technology company is based on the South Bank. His daily commute takes an hour and a quarter each way, and his season ticket costs £470 a month.

However, they had resolved to skip the flat stage and aim for a house well before Sarah, who travels all over Kent for her job, became pregnant. They already knew they wanted children sooner rather than later, and also wanted a home with a garden and plenty of space for family and friends to stay over.

“We found out about the baby the same weekend we reserved the house, so it was all meant to be,” says Oliver. “It was indeed a life-changing weekend.”

crestnicholson.com/developments/oakley-grange/

First steps | Homes & Propertyhomesandproperty.co.uk powered by

START WITH THE BASICS

Will it be a flat or a house?

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4 THURSDAY 22 FEBRUARY 2018 EVENING STANDARD

Finding the Finindnndddiningnnggg thng ngg ththethehe ee moneymoneyHelp from the Bank of Mum and Dad is great — but there are other financial lifelines for first-time buyers. Here’s what you need to know

GET YOUR DUCKS IN A ROW

GET your finances in place before you start your home search — and well before you fall in love with a prop-erty. There is no point lust-

ing after the house or flat of your dreams if you can’t pay for it.

WHAT ESTATE AGENTS WANTThey require evidence that you have a deposit available and can afford to buy using cash in the bank or with a mort-gage. Provide bank statements if you are a cash buyer. If you need a mort-gage, obtain an Agreement in Principle from your lender. This shows they are prepared to lend to you and therefore in theory, you can afford the property — making you attractive to the seller.

DEPOSITIn general, 10 per cent of the purchase price is payable on exchange of con-tracts, although sometimes a lesser deposit may be acceptable.

BANK OF MUM & DADIf you get financial help from your par-ents, agree whether the money is a gift or a loan, or if they intend to take a share in the property to reflect their monetary contribution. If parents are providing the deposit and you are also getting a

mortgage, you must disclose the situa-tion to the lender and they will require written confirmation from your parents that the deposit is being gifted to you.

THE MORTGAGE MARKETBanks and building societies package deals for first-time buyers that often include incentives such as cashback or a contribution towards legal fees. There are also government-backed schemes to help first-time buyers.

A guarantor mortgage may be pos-sible if you have a parent or close rela-tive who will be guarantor, which means they are liable to pay the mort-gage if you are unable to do so. Speak

Homes & Property | Finance

to your bank to see what they can offer and also speak to some independent mortgage advisers.

LENDERS’ JARGONLoan-to-Value, or LTV, refers to the amount of your loan in relation to the value of your property. So if you have a deposit of 10 per cent of the price, the LTV would be 90 per cent. Lenders like a low LTV, so your deposit should be as large as possible — then more prod-ucts, options and competitive rates are likely to be available to you.

HOW MUCH CAN YOU AFFORD?The amount you can borrow will be assessed on this. You will need to pro-vide details of your income and outgo-ings. Your credit score will also be taken into account.

FIXED-RATE OR VARIABLE-RATE MORTGAGESA fixed-rate mortgage has an interest rate that stays the same for a set period, usually for two, three, five or 10 years. Fixed rates can be slightly higher than variable rates but are useful as buyers know their monthly payments and can budget accordingly. Most fixed-rate mortgages are subject to early repay-ment charges should you pay off your

loan during the fixed term, and these can be hefty. Calculate how long you want to be locked into the mortgage.

A variable-rate mortgage can be a tracker deal linked to the Bank of Eng-land base rate or a discount mortgage linked to the lender’s standard variable rate of interest.

DON’T OVERSTRETCH YOURSELFIn addition to the balance of purchase price you will have other expenses such as mortgage arrangement and valua-tion fees, surveyor’s and solicitor’s fees, possibly stamp duty, search fees, Land Registry fees, buildings and con-tents insurance, moving costs, and you

will need to furnish your new home. As a first-time buyer, if you are paying £300,000 or less for your home you won’t pay stamp duty. If you are paying between £300,000 and £500,000 you will pay the duty at five per cent of the amount of the price in excess of £300,000. If you are paying over £500,000 you will pay stamp duty at the normal rates.

The mortgage loan will be secured on your property as a legal charge. Ensure you understand the terms of the loan being offered to you because if you cannot meet the monthly payments and consequently fall into arrears, the lender can repossess your home.

Be ready to reveal all: you’ll need to give a lender details of income and outgoings

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IF YOU don’t have a solicitor already, or you’ve never had any dealings with one, preparing to buy a house is the time to start. You will need a solicitor to act for you

during your purchase — and fortunately, there are plenty of ways to find yourself a good one.

ASK AN ESTATE AGENT Most estate agents will be able to rec-ommend property lawyers they know and trust. Many have preferred law firms for different property types. For example, work relating to leasehold flats may be referred to a particular firm, while work regarding the sale of a country house will be referred to another.

THE DEVELOPERProperty developers frequently have law firms to whom they refer prospec-tive purchasers. Whether the law firm is truly independent is a question that’s often asked.

REFERRAL FEES Some estate agents have an arrange-ment whereby they receive referral fees for work referred to a law firm. The temptation of a referral fee may mean that, on occasion, the best property lawyer or firm may not be recom-mended for a particular job. Do bear this in mind. In fact, ask the estate agent whether they have a referral arrangement.

PERSONAL RECOMMENDATIONSpeak to your family, friends and col-leagues to see whether they know or have used the services of a good prop-erty lawyer or law firm that they can recommend to you.

BEWARE BOGUS LAWYERS There have been cases of fraudsters setting up fake law firms. If you use a

bogus firm by mistake they could disap-pear with your money. Use the Law Society’s free Find a Solicitor database to choose or check up on solicitors in England and Wales, or call the helpline on 020 7320 5650.

CHOOSING YOUR SOLICITORYour solicitor is on your side, so don’t be afraid to ask questions. It is impor-tant for you to have a good working relationship and feel comfortable.

Though not essential, it is often useful for your lawyer to have local knowledge of the area in which you are buying.

Some solicitors have systems which allow their clients to track the progress of their transaction online so the clients can access their case 24 hours a day. They may also offer text updates. If this is important to you, make sure that the solicitors you are considering using offer this service.

Consider choosing a law firm that is accredited by the Law Society’s Con-veyancing Quality Scheme, which is a recognised quality standard for law firms undertaking residential property work. Most lenders insist that their panel members are so accredited.

Don’t forget to check that the solicitor you wish to instruct is on your lender’s panel. If this is not the case, you might end up being liable to pay not only for your solicitor, but also for the costs of your lender using another solicitor who is on their panel.

LEGAL FEES Once you have some particular solici-tors or law firms in mind, telephone or email them and ask for a written fee quote. Do obtain at least three fee quotes from different firms.

Solicitors charge in many different ways — some charge a percentage of the price of the property, some charge a fixed fee and some charge an hourly rate.

Remember that a fee estimate will be given on information you supply at the outset. If the transaction becomes more complex or time consuming, then the solicitor can revise the esti-mate, but a fixed fee should remain the same.

Make sure that the quote you obtain lists all disbursements — for example, Land Registry and search fees and any stamp duty, and so on. Some solicitors charge extra for completing the stamp duty return and for acting for your lender.

Although it’s tempting to go for the lowest fee quote, a law firm quoting very low fees may be inundated with work and so may not be able to provide you with the level of service you expect. As with most things in life you tend to get what you pay for. A personal, qual-ity service will generally cost you more.

REGULATORY MATTERS Solicitors are regulated by the Solici-tors Regulation Authority, the SRA, and are required to abide by principles and a code of conduct set out by the authority in the SRA Handbook.

The standards required are high, but briefly, you can expect your solicitor to act in your best interests, with integ-rity, be independent, provide you with a proper standard of service and pro-

tect your assets and money. The Coun-cil for Licensed Conveyancers will be the relevant regulatory body if your property lawyer is a licensed convey-ancer.

MEMORANDUM OF SALEThe estate agent issues this to the seller, to you and to both of your solicitors. Check your copy carefully as errors are not uncommon.

ENGAGEMENT LETTER Upon receipt of memorandum of sale your solicitor will send you a letter of

Homes & Property | The legal stuff

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Navigating the minefield: your lawyer is on your side, so if you’re baffled, ask

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Buyer beware | Homes & Property

THE most important bit of Latin you’ll ever learn is caveat emptor or “buyer beware”. This is because the burden is on you to

discover defects in a property you want to buy that may not have been clear to you when you inspected it.

Once you exchange contracts, you will not be entitled to compensation from the seller if you must put right defects, so commission a survey as soon as your offer is accepted in order for the results to be available prior to exchange of contracts.

If you are buying a new-build property with a home warranty backed by insurance, a survey is usually unnecessary. However, you may wish to consider a new-build snagging survey. This lists snagging which the developer should rectify prior to completion.

When buying a flat the structure and common parts of the block should be surveyed as well as the flat.

Use a surveyor who is a member of a recognised body, eg RICS — the Royal Institution of Chartered Surveyors.

MORTGAGE VALUATION If you are getting a mortgage, your lender will carry out a mortgage valuation. Your lender is only interested in the value of the property because they want to ensure it will provide adequate security for the amount of the loan. You can usually see a copy of the valuer’s report but really it is of little use to you.

There are different types of survey:

RICS CONDITION REPORTThis least expensive and basic type is adequate if you propose buying a new-build home or a conventional property in good condition.

RICS HOME BUYER REPORTThis is a useful option if you propose buying a conventional property built in the last 150 years, which is in a reasonable condition. It covers such matters as the general condition of the property, major defects, damp, woodworm, rot, damp proofing and insulation. If you are getting a mortgage, for an additional fee your lender’s valuer may do a home buyer report at the same time as the mortgage valuation which generally works out less expensive than paying for a separate one from another surveyor.

BUILDING SURVEYOriginally called a structural survey, this is the most comprehensive and expensive type. It is appropriate if the property is older than 100 years, or is listed, or not built of conventional bricks and mortar, or if you plan to

renovate, extend or alter the property in the future. The cost will depend on the size of the property and the investigations you want undertaken.

A survey can reveal some important issues with the property but once you are aware of these you can investigate them further — and perhaps negotiate a price reduction.

Options: different types of survey may be needed, depending on the property

engagement, also known as a confirma-tion of instructions letter or client care letter. It is often several pages long and you will be asked to sign a copy of it by way of acknowledgement.

Generally, numerous information sheets and forms for you to complete accompany it. Do not be overwhelmed — if you do not understand something, ask your solicitor for an explanation.

Solicitors use long engagement letters hoping to satisfy the numerous regula-tory requirements to which they are subject. For example, the engagement letter should include information about

your right to complain should you be dissatisfied with the service you get.

INSTRUCTIONSThe forms sent to you with the engage-ment letter must be completed. These will provide a lot of information but your solicitor should ideally telephone you or meet with you in person to take detailed instructions. Your solicitor should know such matters as:

Who your lender is, to ensure that the firm is still on the lender’s panel.

Whether you have paid a prelimi-nary deposit or reservation fee.

If there is an Agreement in Principle for a mortgage.

If a survey has been completed.If there is a deadline for exchange of

contracts.If there is a completion date you wish

to work towards.Who will live at the property. Whether you intend to carry out

works, alterations or extend the prop-erty.

MONEY LAUNDERINGYour solicitor must check your identity in order to satisfy anti-money launder-

ing regulations and check the source of your funds. You will need to be able to prove where your deposit has come from or, if you are a cash buyer, where the purchase funds have derived from.

GETTING YOUR CONTRACTYour solicitor will now contact the seller’s solicitor confirming receipt of instructions and request the contract papers. Hopefully, your solicitor will be proactive and keep you updated — even if only to confirm that the contract has not arrived yet.

High standards: your solicitor must act in your best interests at all times

Success: your funds are in place, but a survey is a vital step in the process

A THOROUGH SURVEY

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FIRST-TIME buyers can be a nervous breed but Michael Dan made the biggest financial commitment of his

life to date without actually seeing the flat he was to buy.

The 25-year-old account manager is buying a two-bedroom flat in north London off-plan, and reserved the £420,000 home more than a year before it would be ready to move into. He was sharing a flat in Chalk Farm but his parents were worried he was wasting £675 on rent each

‘I chose my flat from a CGI’

Reserved a year ahead: off-plan buyer Michael Dan believes he has saved by paying last year’s price for his flat

PROS AND CONS OF OFF-PLAN

month. His mother even went to the lengths of putting his name down on dozens of developers’ mailing lists. Last spring the details of Harrow Square in Harrow on the Hill caught his eye because of its roof terraces and landscaped gardens, its proximity to the Tube, quiet location and nearby shops and gyms.

“The sales manager showed me computer-generated images of what the development would look like,” says Michael. “Because I was buying so early, I could choose any flat on

the development and made my choice there and then.” Michael had to put down an initial 10 per cent deposit and will pay the remainder when the flat is completed in June.

His grandfather recently died, leaving enough money for him to be able to buy the property without a mortgage.

Michael believes that by paying last year’s price for a 2018 flat he has saved money. “Mine was the first block of three at the site and the second one, which will complete in 2019, has the equivalent flat to mine on sale for £500,000,” he says.

It is important to remember, though, that if market prices had

dropped over the past year he would have ended up committed to paying £420,000 for a property which was actually worth less than that.

And for other first timers interested in buying off-plan, it is important to know that banks will only make mortgage offers six months before their completion.

This means buyers have a difficult choice. They can either buy closer to the wire than Michael did, giving far less time for prices to rise, or take a huge gamble and pay a deposit without a mortgage in place — a move not really to be recommended for a first-time buyer.

barrattlondon.com/harrowsquare

From £348,000: one- to three-bedroom flats at Harrow Square, HA1, most with private balconies

Great location: Harrow Square’s 318 new homes will be two minutes’ walk from Harrow on the Hill Tube. Call 020 8420 0150

Homes & Property | Buying sight unseen


... AND WHAT TO EXPECT FROM YOURSELF

THE SELLER must provide you with an Energy Performance Certificate — or EPC — free of charge. The EPC is produced by an accredited domestic energy assessor and lasts 10 years.

DUTY OF DISCLOSURE The rule of “buyer beware” applies but the seller must not fraudulently conceal known defects or reply dishonestly to pre-contract enquiries.

PROTOCOL FORMSYour solicitor will have provided you with copies of the property information form, the fittings and contents form, and, if you are buying a leasehold property, with the leasehold information form. The seller will have completed these forms and answered any additional enquiries raised by your solicitor, and should have done so accurately and honestly.

VACANT POSSESSION The Law Society’s Standard Conditions of Sale (5th Edition) is commonly used in most residential property transactions and provides for vacant possession on completion — unless the contract has been varied, usually because the property is being sold with a tenant.

The property you are buying is presumably for you to occupy, so you will want it to be vacant when you

complete the purchase. The seller should have disclosed prior to exchange of contracts if the property is occupied by anyone other than themselves. If anyone aged over 18 is living with the seller at the property, that occupier should sign the contract to confirm no rights of occupation are being claimed and that they will leave the property on completion.

Vacant possession also means that on completion, the property should be clear of all contents apart from anything that the parties agreed should be left. In the property information form the seller should confirm that all rubbish will be removed from the property including from the loft, garden, outbuildings, garden and shed, and that the property will be left in a neat and tidy condition.

The contract will include not only a completion date but also a completion time. This means that on the day of completion your seller should have vacated the property by the time specified in the contract.

Any charges that may be secured on the seller’s property should be redeemed and discharged by their solicitor on completion — leaving you with a clear title to your new home.

WHAT TO EXPECT FROM YOUR SELLER...

Sacrifices: Nishant Sodhani and wife Minal went without holidays to buy a home

‘It was worth six years of saving up’

Homes & Property | Great expectations

FIRST-TIME buyers Nishant Sodhani and his wife Minal are realists, and had been resigned to the fact they would need to save

hard for three or maybe four years to raise a deposit.

But as London’s prices rose, it ended up taking the couple, both 35, almost six years to raise a big enough deposit to take their first step on to the property ladder.

“It has required a lot of discipline,” says Nishant. “You have to ensure that you save regularly and be prepared to make

sacrifices such as taking fewer holidays and deferring big-ticket purchases like a car. Every time we thought we had got there we found that prices had moved up and we had to save again.”

Eventually, last summer, thanks to all that self-discipline they were able to put down a 10 per cent deposit on a £615,000 three-bedroom house at the new Lyon Square development in Harrow, north London (see redrow.co.uk/newhomes/london).

They moved in with their six-year-old daughter, Ananya, in August.

The couple, both qualified accountants, had been spending £2,000 a month on renting their

previous home, a two-bedroom flat in Royal Victoria Docks. However, because they have upsized significantly, their

mortgage bill is now just over £2,200 a month.

In order to keep repayments at a manageable level they have opted for a 34-year repayment mortgage, which they will be paying off until they are about 70 years old.

Despite this long repayment term, their new home, with its wow-factor kitchen, luxuries including underfloor heating, and Lyon Square’s on-site children’s playground, have made the financial push worthwhile, the couple say.

“It is really like a dream come true,” says Nishant. “We are just so happy, I can’t say it enough.”

RUTH BLOOMFIELD

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YOU CAN HELP TO SPEED THINGS UP

THE London Help to Buy scheme was set up to assist first-time buyers with what is often the biggest hurdle to home ownership in the capital — raising a deposit. Dancer Matt Holland, 27, and Scott Jones, 30, an actor, say they couldn’t have got on to the property ladder without the Government’s scheme.

Last month they moved into a one-bedroom flat at Crest Nicholson’s Dylon Works (crestnicholson.com/dylonworks/) in Lower Sydenham, priced at £384,995. London Help to Buy isn’t an easy option, however. They had to put down a deposit of just over £19,000. “We saved and saved and have both been working in West End shows for years,” says Matt. They also needed to find a 55 per cent mortgage, while a 40 per cent equity loan covers the remainder.

Being self-employed made finding a mortgage tricky since banks don’t seem to have caught up with the reality of the freelance generation. They also had to get their timing just right. “You have to have three years’ books to show, and they have to be good years,” says Matt. “We had to buy when we did because we had a good year last year, and we didn’t know what this year would bring.”

Their mortgage repayments are just over £700 a month which is good

value for their roomy flat with its private balcony — and also less than the £824 a month they paid previously to rent a tiny studio flat in Archway.

They’re enjoying getting to know south-east London. But they are also having to look ahead and keep saving because, after five years, they will have to start paying interest on their equity loan alongside their mortgage. “We

‘Help to Buy’s low deposit made it possible for us’The contract isn’t just ‘the boring bit’ you can leave to the solicitors

WHILE waiting for the seller’s solicitor to issue the contract, help things along by ensuring that your solicitor knows how you wish to communicate — for

example, by email to your personal email address with hard copies to your office marked “private and confidential”.

The engagement letter would have asked you for a payment on account of search fees — pay this into your solicitor’s account to avoid delays. That way, as soon as your solicitor is ready to proceed, the searches can be commissioned.

THE CONTRACT As well as the contract for sale, your solicitor should receive from the seller’s solicitor copies of the title deeds and, in the case of a leasehold property, a copy of the lease plus protocol forms completed by the seller, comprising:

The property information form, which provides a brief history of the property;

The fittings and contents form, which lists the items included and excluded in the sale price and may offer some items for sale;

The leasehold information form if the property is leasehold;

Copies of planning consents and electrical and gas certificates and the like may also be included with the contract package, and

For a leasehold property your solicitor should raise leasehold property enquiries (Form LPE1), which the landlord or managing agents should complete.

Your solicitor should provide you with copies of the documents and explain them to you. If you do not understand anything, do ask questions. Having considered all the paperwork, your solicitor will now raise enquiries of the seller’s solicitor and requisition searches.

SEARCHESIf you are a cash buyer, you are not subject to the requirements of a lender and so it is entirely

Be proactive: let your solicitor know how best to contact you and make sure they have payment on account to get on and commission any necessary searches for you

Homes & Property | Doing the deal

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want to buy up more of the flat if we can afford to, and then sell it and move on,” explains Matt. “The interest rates on the loan go up exponentially, so you actually probably can’t afford to just stay forever. For us it is a way of putting some money into something which will hopefully grow in value, so that we can eventually put it into something which is not a Help to Buy.”

A home of our own: Matt Holland and Scott Jones used Help to Buy to get on the ladder with a flat at Crest Nicholson’s impressive Dylon Works, below, in Lower Sydenham SE26, right next to the commuter station

up to you whether you have searches carried out. It is, however, prudent to do so.

Searches depend on the locality in which the property is situated and a solicitor should carry out searches appropriate to the property — for example, whether former industrial land is contaminated. The usual searches that should be undertaken in every transaction are:

Local land charges and local authority search. These reveal matters such as compulsory purchase orders, tree preservation orders, planning enforcement notices, planning and building regulations consents, proposals for road schemes, village greens and so on. The results of the local search only relate to the specific property you are buying and not to neighbouring properties;

Drainage and water enquiry. This confirms if the property is connected to the main water supply and main drainage and shows the location of public sewers within the boundary of the property, which could restrict further development.

An environmental search. You need to know if there is a risk that the land on which the property is situated could be contaminated. If a local authority does determine the land to be so and the person who caused the contamination cannot be found, the current owner or occupier will be required to remedy the contamination. This could be an expensive process.

Other common searches are a chancel repair search — which confirms whether the owner of property may be liable to contribute towards the cost of repairs to the chancel of a parish church — and a flood risk report. Your solicitor will advise you on any necessary additional searches.

REPORT ON TITLEYour solicitor will prepare the report on title once the replies to enquiries raised and search results are available. It should explain to you the title to the property including obligations, restrictive covenants and rights — ie burdens to the property (such as rights of way) and benefits to the property. Essentially, it pulls together in one place the information relevant to the property that your solicitor has collected to date.

Once your funding is in place and, in the case that you are getting a mortgage the offer has been issued and your solicitor has received mortgage instructions from your lender, provided you and your solicitor are happy with everything and your solicitor can satisfy any conditions in the mortgage offer, you can now prepare to exchange contracts.

You were warned: depending on location, a flood risk report may be an essential before you buy

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The time has comeNOW YOU HAVE TO SIGN

SIGNING THE CONTRACT Your solicitor will ask you to sign the contract. Both buyer and seller sign identical contracts.

Read your contract carefully to ensure that it incorporates any alterations, such as a price change or a list of any contents of the property that you may have agreed to buy from the seller.

Ideally you should sign the contract in the presence of your solicitor so that they can ensure you fully understand the terms. However, in practice most solicitors send the contract to the client with an accompanying letter explaining the terms it contains and what the client needs to do.

Return the signed contract to your solicitor who will keep it until both you and the seller are ready to exchange contracts. There is no legally binding contract until your solicitor and the seller’s solicitor exchange contracts.

THE DEPOSIT Most solicitors ask for this to be sent by electronic transfer directly to their client account.

BUILDINGS INSURANCEYour buildings insurance should be in place from exchange of contracts because under the terms of your contract, this is when the risk in the property passes to you. Cover should be equivalent to the reinstatement value of the property indicated in your mortgage valuation or survey.

AUTHORITYEven though your solicitor has your signed contract, you must still give them express authority to exchange contracts on your behalf and confirm the completion date you require.

EXCHANGING CONTRACTSThe most common method is by telephone. Once satisfied that everything is in order and mortgage instructions from your lender have been received, your solicitor will call the seller’s solicitor to exchange contracts. Following exchange your solicitor sends to the seller’s solicitor

your signed part of the contract, while the seller’s solicitor sends their signed part to your solicitor.

You will be notified by your solicitor of exchange. Check your buildings insurance is in place. Arrange your removals and the connection of services such as electricity, as a binding contract is in place.

Your solicitor will ask you to sign the transfer document and the mortgage deed in readiness for completion and will send you a

completion statement confirming the funds required to complete the transaction.

If you are buying jointly with someone else, you will need to state in the transfer document whether you wish to hold the property as tenants in common or as beneficial joint tenants. If you choose a beneficial joint tenancy, you own the property equally and on the death of one of you that person’s share passes automatically to the survivor.

Alternatively, tenants in common can hold the property in unequal shares and their share passes under the terms of their Will or under the rules of intestacy if there is no Will.

Finally, in some cases it may be possible to access the property between exchange and completion, for example, if the property is empty, provided the seller agrees and provided you enter into a key undertaking. Discuss this with your solicitor.

Homes & Property | On the home straight

GET

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Exhausted and ready for the pizza delivery, there are just a few things left on your to-do list that are more important than buying a sofa, says Fiona McNulty

AT LAST YOU’RE ON THE LADDER

GET THOSE OFFICIAL DOCUMENTS SORTEDThe transfer and mortgage documents that your solicitor has sent to you must be signed in the presence of an independent witness, who must be aged over 18. Some mortgage deeds need to be witnessed by a solicitor — however, your solicitor will advise you if that is necessary. The signed documents must be in the possession of your solicitor before completion can take place.

COMPLETION FUNDSTo enable your solicitor to complete the purchase, they must be in receipt of the balance of completion monies from you and, if you are getting a mortgage, your mortgage funds. Most solicitors try to ensure that all completion monies are in their client account the day before completion is due to take place. This reduces the risk of the buyer being in breach of contract for late completion due to the funds arriving into the seller’s solicitor’s client account after the time specified in the contract.

COMPLETION DAYOn completion day, your solicitor will carry out any necessary pre-completion searches and will send the balance of purchase monies to the client account of the seller’s solicitor.

Fraud is common these days, so your solicitor should speak to the seller’s solicitor to check they have the correct bank account details. This helps to prevent completion

monies being sent to bogus bank accounts. Upon receipt of the completion monies, the seller’s solicitor should contact your solicitor to confirm completion has taken place, and then contact either the seller or the selling agent to

authorise the release of keys to you. You can now move into your new home.

AFTER COMPLETIONYour solicitor will submit to HM Revenue & Customs your stamp duty return, pay any stamp duty that’s due and will apply to HM Land Registry to register your title to the property and to secure the lender’s

charge if you have a mortgage. Once your title is registered, a title information document will be issued by the Land Registry to your solicitor, who should provide you with a copy and let you have any documents relating to the property that the seller’s solicitors have handed over —unless you wish your solicitor to retain these documents for safekeeping. Most lenders do not

require sight of any title documents, although some do like to have the original signed mortgage document once their charge has been secured against the title at the Land Registry.

PROPERTY FRAUDAs this is so common you may wish to sign up to the Land Registry Property Alert Service (gov.uk), which is a free property monitoring scheme. You will receive email alerts when certain activity occurs with relation to your property so you can stop fraud.

DECLARATION OF TRUSTConsider making a declaration of trust if you have bought jointly with another person and you are holding the property as tenants in common. The declaration is a legally binding document that will allow your agreement to be recorded regarding such matters as ownership shares, contributions to the price of the property and your responsibilities for repair and maintenance.

COHABITATION AGREEMENTYou may wish to consider putting a cohabitation agreement in place if you are living with your partner but are neither married nor in a civil partnership. This legal agreement can address matters such as how you deal with the sale of the property if your relationship breaks down.

WE HATE TO BRING IT UP — BUT THINK ABOUT YOUR WILLIt may be appropriate to make a new Will or update an existing one, to take into account your new asset.

Homes & Property | The loose ends

Documents

First-time Homes buyers...During the conveyancing process your solicitor will obtain a considerable amount of detailed information but before you commit to buying, you should find