First Time Buyer specific to Scotland

futurecut

I've recently read views on this forum which err against buying a property in the short -term as this is most at risk from neg equity.

My friend, a letting agent says times are tough for him just now, but i haven't seen any appreciably less expensive rentals in Glasgow; my own letting agency for example weren't willing to reduce rent to keep our custom. (plus their service is abysmal!)

As prices are still rising here past an already daft level, is it less risky to take the plunge up here than elsewhere as Scotland tends to lagg behind market trends in England?

Ali_Bali_2

futurecut
It's no less risky to take the plunge in Scotland. You need to think about all the hidden costs involved in house purchase. The offers over system can be expensive particularly when it means that after paying for a basic survey (Valuation) you lose out to a higher bidder. Often people who lose out a couple of times go well over the odds to secure their next bid. Next there is the Stamp Duty (10% of the purchase price) some postcodes are exempt and it's worth finding out about these. Then there is the Lawyers Bill (shop around often some don't charge all their system allows them to) and extras like the percentage of Council Tax due etc etc. It's still a good idea to get on to the property ladder even for a short time (generally avoid new build as builders profit can take years to overcome) be careful don't overstretch yourself and good luck.

DiggingOut

Since prices haven't gone up as much in Scotland as elsewhere, the risk is less -- though still very real.  I would be hesitant to buy in Scotland right now.

Yes, offers over system can be tricky, but not all houses are sold offers over.  And you can still offer a price that you think makes sense -- if you don't get the house, there's always another one.

Since when is stamp duty 10%? ??? It varies by the purchase price.

It's only a good idea to get on the property ladder if it is a ladder, and not a roller-coaster about to go down.  No one knows that, so I wouldn't say it's necessarily a good idea to get on right now.

New build is not necessarily a bad idea, it just depends.  Builders can be more motivated to sell a house than anyone else, at times.  For them, it's dead money -- they've incurred all the expenses of building it, they need to get their money back.  This is not always the case with an existing house -- the owner may not be exceptionally motivated to sell.

yonk

The market in Edinburgh is flying at the moment, particularly for flats in a 1st time buyer price range. The is quite a premium on new-builds as the developers fix their prices and it is easier for a 1st time buyer to arrange the finance.

Lenders mostly lend on the the lower of the purchase price or the valuation. The valuation can be lower than what you pay by a long way (here in Scotland) but there are a couple of lenders who now lend higher than 100% Loan-to-Value. (Obviously, it is still advisable to have a reasonable deposit just, in some cases, there is such a wide gap between the price paid and the valuation, these products are helpful)

However, 2nd hand property is still cheaper if you can find one fixed price or know what you are doing with the offers over.

Find a solicitor you like and lean on them for lots of advice if you do decide to buy. They can weed out the affordable properties from the ones where the upset price has been set too low. Remember, they only charge if you get the house, they don't charge for offers. Offering subject to survey is also a lot more common.

Ali_Bali_2

Further to my earlier post. Sorry, I meant to say Stamp Duty was 1%. It does vary with price but in the most common range £60,000 to £250,000 it is 1%. It is also true that you can bid what you think is fair and if you lose out move on to another house however if you have had surveys done it can be costly. I know a number of people who sold recently none accepted an offer subject to survey they accepted formal legal offers only.

futurecut

Thanks everyone,

I think i'm going to hold off as i don't have sufficient funds for a decent security net with all the added extras.

yonk

It's still a legal offer (done by a solicitor) just says subject to survey as one of the clauses. I think it's an Edinburgh thing as people were getting so fed up with missing houses. A lot more of the solicitors are putting things on at a fixed price too.

I survey as my solicitor prefers it but he also gets me to pay too much, after all, you are just out-guessing the other bidders. In the end, it comes down to how much the house is worth to you. The survey is helpful as it gives an indication of how much you can borrow. If you bid way over, you have to find the money from somewhere else other than the mortgage.

The advantage for the seller if a survey has been done is that they know the buyer shouldn't try to quibble or try to negotiate the price down (if they discover problems with the survey) once the offer has been accepted. So it is preferable to accept an offer that is not subject to survey