The latest Clay Shaw Butler Money Matters column from the Carmarthenshire Herald

The latest Clay Shaw Butler Money Matters column from the Carmarthenshire Herald.
By Mark Jones, director of Carmarthen-based Clay Shaw Butler chartered accountants and business consultants.

They say that buying a house is more stressful than bankruptcy and divorce.
Certainly, it can test even the most level-headed individuals.
Here are some nuggets of ‘Money Matters’ advice on buying a house and moving home.
When you buy a property or move home, there will be a number of upfront fees, beyond just your mortgage costs, which you’ll need to take into account.
Be sure to include these when working out your overall budget.
You will also need to make sure that you have saved enough to cover all of the upfront costs.
These include:
The deposit. This is the amount you put towards the cost of the property when you buy your home.
On average, you need at least 5% to 20% of the purchase price (for example: £10,000 to £40,000 when buying a £200,000 home). Help to Buy and other housing schemes only require a 5% deposit.
Generally, the bigger the deposit, the more likely you are to be given a mortgage, and the lower your interest rate is likely to be.
Stamp duty. This is a Government tax paid on homes costing £125,001 or more.
The mortgage lender will assess the value of the property to establish how much they are prepared to lend you. The cost can be £150-£1,500 based on the property’s value.
Some lenders may not charge you for this, depending on the type of mortgage product you select.
The lender’s valuation is NOT an extensive survey and will not necessarily identify all the repairs or maintenance that might be needed.
Surveyor’s fee. Before you buy a house you should have it checked out by a surveyor. This is vital so that you understand if there are any issues with the property before you buy.
Surveys range from a basic home condition survey costing around£250 to a full structural survey from £600 or more. Paying for a good survey could save you money on repairs further down the line.
Legal fees. You will need a solicitor or licenced conveyancer to carry out all the legal work when buying and selling your home. They will also do local searches, which will cost you £250-£300, to check whether there are any local plans or issues.
On top of this, the legal fees are typically £500-£1,500 including VAT at 20%.
Electronic transfer fee. Typically costing £40-£50, this covers the lender’s cost of transferring the mortgage money from the lender to the solicitor.
Estate agent’s fee. This is only paid by sellers, not buyers, for the estate agent’s services and is negotiated when they put the property on the market and is usually 1% to 3% of the sale price plus 20% VAT.
Removal costs. Typically £300-£600 though you could do it yourself. Removal firms charge more at weekends and at the end of the month.
You will need to understand the costs that may have to be paid along the way from the time you make an offer until you move in.
Look beyond the interest rate and make sure to also take the fees and charges into account when selecting a mortgage.
Mortgage fees. These may include a booking fee of £99-£250, an arrangement fee of up to £2,000 and a mortgage valuation fee (typically £150 or possibly more).
It’s best to pay these upfront rather than adding them to your mortgage, otherwise you’ll be paying interest on them for the life of the mortgage.
Ongoing costs. Remember once you buy your own home you’re responsible for looking after it.
Maintenance and repairs. The average repair bill for new homeowners is £5,750. Your survey should have highlighted any problems that need fixing straight away.
Insurance. The lender will require that you take out buildings insurance to protect your new home against damage from fire, floods, subsidence and anything else.
It’s also a good idea to have contents insurance for all your possessions, and life insurance to pay off your mortgage should you die before you’ve repaid the entire amount.
Council Tax. The amount you pay is based on where you live and the valuation band the property is in.
Running costs. Ask the sellers how much they spend on utilities – gas, electricity and water – every year. Don’t forget charges for a landline, TV packages and broadband.
Leaseholders’ costs. Property owners with a leasehold property will have to pay ground rent (around £50-£100 a year) and service charges to the person who owns the freehold. Service charges and admin fees differ between properties. This is an important cost of running a property so it’s vital you know more about these charges.
You can find out more about money matters on the Clay Shaw Butler website (under our news for business section) -
http://www.clayshawbutler.com/news/latest-news-for-business
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