Home ownership is still the most popular tenure in Scotland with over 60% of households owning a home outright or with a mortgage. Home ownership is also what many people aspire to, but there are many things to consider before buying a home. You can research different options on the internet or seek advice from a financial advisor or mortgage broker. More detailed information about buying a home in Scotland and the costs are available on the Money Advice Service website.
Finding a home
You can search for a home online, in newspapers or directly through estate agents. Second-hand homes for sale in Scotland must be marketed with a Home Report. This will include information about the condition of the home, an assessment of its energy efficiency and the valuation of the home. It may also include additional information from the seller such as Council Tax rates and factoring costs. You should carefully consider the Home Report before making a decision to buy the home, especially if it indicates the need for repairs or maintenance to be carried out.
You should consider whether you want to buy an existing home or a new build home. New homes may be marketed by estate agents, through online portals or directly by the developer. More information on new homes can be found on the Homes for Scotland website.
Getting a mortgage
There are a wide range of deals available and you need to decide which one is right for you and what you can afford to pay each month. You should consider what the interest rate is and whether this is a fixed rate or if it will move up or down – would you still be able to afford the mortgage payments if interest rates go up? Different types of mortgage carry different benefits and risks.
Once you have chosen a mortgage product and the lender has agreed to offer you a mortgage, they will issue you with a mortgage ‘in principle’. This indicates to sellers that you have funds available and allows you to make an offer on the home that you want to buy.
Appointing a solicitor
You will need to appoint a solicitor to manage the purchase of the property. The solicitor will check the legal status of the property and the seller to make sure that the sale can go ahead. They will also negotiate the purchase on your behalf.
Costs of buying a home
As well as monthly mortgage payments, you will probably have to pay some costs up front. These may include:
- A deposit – the amount will depend on the type of mortgage you take out.
- Land and Buildings Transaction Tax. This is the Scottish equivalent of stamp duty and must be paid for all homes over £145,000. More information and a LBTT calculator is available on Revenue Scotland’s website.
- Mortgage arrangement fees – these may be charged by your lender to arrange the mortgage.
- Solicitor’s fees – these can include a registration fee for the sale of the property sale and any other fees associated with the purchase. Your solicitor should advise you of what fees you will have to pay.
- Survey fees – all second-hand homes for sale must have a Home Report. This includes basic information about the condition of the home but some buyers may want to carry out a more detailed survey before committing to buying the home.
- Insurance – you may be required to take out insurance on the building or to cover the cost of repayments if you are unable to cover the mortgage.
You should also be aware of your responsibilities for repairs and maintenance. If you are buying a flat, you will probably be responsible for a share of the cost of repairs for any common areas of the property such as the roof – even if you live on the ground floor. You should check if the home you want to buy has a factor and what the fees are.
Angela Hamilton (56) was able to move across Edinburgh to be closer to her family thanks to the assistance she got from her builder, who helped her sell her existing property. Now the owner of a new two bedroom apartment, Angela says:
“The property itself is fantastic – it’s finished to a very high standard and I’ve already had the grandchildren to stay, they think the flat is ‘awesome’.”
Living in a flat in Edinburgh, Gillian and Robert Toohie wanted more space and a garden for when their grown-up children and families came to stay. The couple couldn’t find the space they wanted within their budget in Edinburgh so they looked outwith the city to East Calder.
“This was a natural step for us as our flat just couldn’t cope when our family decides to visit so it was definitely time for a move and the fact that there is no DIY and only minimal maintenance really attracted us to a new build.”