It all started in the Summer of 2009 when the property market had crashed and suddenly we could afford a house! We desperately needed more room, especially since I bought the flat for myself 8 years ago and now there are two of us living here.
I knew my flat had also dropped in value but less so in cash amounts than a potential house. I called some estate agents who valued the flat for more than I expected. We decided to go for it and put the flat on the market, after all…we had nothing to lose!
The estate agent was keen to arrange the Home Information Pack (HIP) so I quickly gave him my credit card! I later discovered that I could have saved about £150 if I had shopped around. If you’re thinking about moving, do a search on google for HIP.
First the finances! Out came my spreadsheet.
We needed to calculate how much we could afford to pay for a house. I worked out how much we had as equity in the current property, the cash we had managed to save plus a new scary 25 year mortgage.
With the mortgage I was lucky enough to be able to put down a 25% deposit which meant we were able to borrow at a lower interest rate. This made the monthly repayments significantly lower than they would have been otherwise.
Next I calculated the expenses.
1, The killer tax – stamp duty. For us, it’s 3% and is a rather large sum for what appears to be nothing! This is one of the reasons we decided to buy somewhere we could live for at least the next 10 years. The different rates can be found on the Directgov website.
2, Solicitor Fees. There are fees for the sale and fees for the purchase. I called four different solicitor firms and ended up using the one I preferred and asked them to match the lowest quote I received which was £2.3k. It’s probably worth asking around to see if anyone you know can recommend a solicitor.
3, Estate Agent Fees. Again, I shopped around and ended up asking my preferred agent to match the lowest quote I received. For me, the fees are 1.25% of the actual sale price on completion of the transaction.
4, Removal fees. I received some really good quotes, possibly because we’re not moving that far and don’t have that many big things to move. I’m planning to move the small items myself.
I subtracted the fees above from the cash we could raise (equity + savings and mortgage). This gave me an idea as to how much we could afford to pay for a house.
Next came the exciting part…looking for a house.
We set up an alert on rightmove for the types of houses we were looking for. I found the website really useful and got hooked very quickly. Then we waited….waited….and waited and discovered the house market was really not moving!