You’re a first time buyer ... what costs do you need to consider when moving?

 

You may need money to pay for:

 

Even as a first time buyer, you're more than likely going to have to pay SDLT.  There are higher 0% thresholds for First Time Buyers so it pays to do your research first so you know exactly what you are looking at paying in Stamp Duty.  This handy online tool can give you an idea as a first time buyer what you can expect to pay. 

A survey is a detailed inspection of a property’s condition.

 

There are various different types of home survey. A mortgage valuation is not the same thing as a home survey. A valuation does not protect you if something goes wrong with the property. An Energy Performance Certificate (EPC) is not the same thing as a home survey either. It is only a visual assessment of those elements which play a factor in determining the energy efficiency of the property (such as heating sources and cavity wall insulation). An EPC does not indicate whether these elements are in good or bad condition – it assumes all elements are working correctly.

 

You should strongly consider having a survey carried out. A survey is useful because it will advise you of minor maintenance and major works required on the property now and maybe in the future.

 

The survey should be carried out by a trained professional; for example a member of the Residential Property Surveyors Association (RPSA), the Royal Institution of Chartered Surveyors (RICS) or the Independent Surveyors and Valuers Association (ISVA). We can refer you to a surveyor, but it is your decision who you appoint. You should speak with a surveyor to get advice on what level of survey service is recommended for your property purchase.

 

Once your offer has been accepted, you need to select a legal representative. They play a key role in helping you purchase your home - they carry out the appropriate legal checks on the property, complete the legal work for your property purchase and, if you are getting a mortgage, ensure that it meets your lender’s requirements.

 

They will identify any title or planning issues; advise you on which searches to have carried out (see the next section) and do the legal work of transferring the ownership of the property from the seller to you. It’s a good idea to get a number of different quotes before you select a legal professional. You should consider: the price, the quality of their offering as well as the service.

 

Your legal professional will organise local authority searches on the defined property and/or land. These searches tell you about any restrictions relating to the land or property (e.g., tree preservation orders; whether the property is listed or in a conservation area) and about any relevant external factors (e.g. new roads [except those proposed by private bodies] or rail schemes) but do not tell you about development on the neighbour’s land. If you have concerns about this then your legal representative can request a specialist search for you. Your legal representative will also advise you about any additional searches you should undertake, such as flood risk or a mining report.

It is sensible to ask your legal representative to order searches as soon as possible to prevent delays, but some professionals advise you to wait until your mortgage offer has been confirmed. You typically have to pay for the searches up front

 

In order to exchange you need to organise buildings insurance, because upon signing the contract you are legally responsible for the property.

You need to consider how you are going to move your belongings into your new home. You may be able to move yourself or hire movers to help you. If you need a professional removal company make sure you give them as much notice as possible. Fridays and the first and last days of the month are often very busy, so you may get better rates and availability if you try to avoid these times

 

Once your offer has been accepted, you need to complete a full mortgage application for the lender you wish to use (this can be either the lender who gave you your initial decision in principle, or another provider). If you have a mortgage broker they may complete the application for you. Make sure you select a lender who offers the best deal for you for the property you wish to buy. When applying for the mortgage you will need to complete a form and show ID, proof of address and proof of income. Self-employed people may have to provide extra assurances of their income, so find out what the requirements will be before you apply.

 

The mortgage provider will carry out a mortgage valuation, where they check that they are happy to lend against the property. This is not a survey - valuation does not protect you if something goes wrong with the property and may not even include a physical inspection of the property (for this information you will need to have a survey carried out – see the following section)

 

 

When considering a property purchase, it is really important that you know whether the property is freehold or leasehold. The vast majority of properties in Gibraltar are leasehold.  A freehold property means you own the property and land outright which is very rare particularly under £1m. A leasehold property means you only own the property for a fixed number of years. You have the right to live in that property, but you will need to follow any rules laid down in the terms of the lease. Flats are always leasehold and, in Gibraltar, houses usually are too.

 

If you buy a leasehold property you may have to pay regular ground rent and service charges to Government or the head lessor. The service charge is paid to the managing agent or LPS towards the costs they incur for the services they provide, like repairs, gardening, or cleaning of common areas. It can also include building insurance.