First time (cash) buyer in London - advice needed

eevamaija

I am a first time buyer in London and due to family money and great generosity from my parents, I am in the position of being able to skip the mortgage and buy cash.

I would normally be expecting to look at 1-2 bedroom flats between £300,000 and £400,000.

I am currently renting (with a flatmate) and my year-long contract ends at the beginning of May 2020. Ideally that is when I would like to move, or maybe a month or two before that. I would prefer to make a clean break with my flatmate (who I don’t get along very well with) and that would be easiest if I could pay up to the end of the contract and then leave.

I’m aware that not needing a mortgage greatly reduces the financial complexity, but although I have done some research of my own, I feel I will still need more advice on the whole process and on what additional costs will be involved (ie. conveyancing, etc.)

I would ideally like to speak to an independent financial adviser but it looks as though generally they deal with mortgages specifically. Would anyone have suggestions for an IFA in London who would be interested in speaking to a first time buyer who can also buy cash?

Some of my questions/comments would include the following:

-Currently the money involved is still with my parents rather than in one of my own bank accounts. (They live in Canada and I live in the UK, which could possibly complicate things a bit more.) When registering with agents, looking for a solicitor, etc, do I need to offer an immediate guarantee that I hold the funds or can access them? Or would this only be necessary later on – ie. when making an actual offer?

-At what point do I need to engage a solicitor? I assume that a solicitor is still needed for conveyancing, etc even if the process is simplified without a mortgage.

Essentially, I would love some advice on finding an IFA who could help me out even with advice as to the process. And if anyone has been in a similar position to mine, your advice would be much appreciated!

Mortgage_Adviser

Although buying without a mortgage you may still want to protect yourself in the same way by ordering solicitors to do all the same searhes and checks.
As you are not getting a mortgage you are skippng that step and can aproach the solicitors straigh away.
Ask friends and family for recommendations or find some local firm where you could go and see them in person as oposed to using big company's conveyor service.

eevamaija

Mortgage_Adviser wrote: »

Although buying without a mortgage you may still want to protect yourself in the same way by ordering solicitors to do all the same searhes and checks.
As you are not getting a mortgage you are skippng that step and can aproach the solicitors straigh away.
Ask friends and family for recommendations or find some local firm where you could go and see them in person as oposed to using big company's conveyor service.

Thanks so much for this. So essentially, rather than looking for an IFA necessarily (as I don't need a mortgage) it might make sense to look for a solicitor now? Should I really have a solicitor lined up before I start actively flat-searching? (I've only done a bit of cursory searching so far on rightmove and similar websites to get an idea of what's out there)

hazyjo

By all means start shopping around for a solicitor now. Find one you are happy with (visit local ones in person if poss), although I would find a property first before actually appointing them. The EA will want the solicitor's details when you've offered or had an offer accepted. Appoint them in the first instance, and 'instruct' once the whole chain is complete.


At least that's how I would do it.

eevamaija

hazyjo wrote: »

By all means start shopping around for a solicitor now. Find one you are happy with (visit local ones in person if poss), although I would find a property first before actually appointing them. The EA will want the solicitor's details when you've offered or had an offer accepted. Appoint them in the first instance, and 'instruct' once the whole chain is complete.


At least that's how I would do it.

Thank you - so if I understand right, you'd suggest researching/visiting some solicitors while starting to get my property search more under way, but then actually "hiring" one (which is "appointing", I take it?) when I'm ready to offer.

I'm sure they would also be able to advise me on when to get the cash lined up and ready to go, etc.

(Sorry if I sound like I'm just parroting stuff back here - it's all quite new to me so I just want to make sure I'm understanding!)

hazyjo

eevamaija wrote: »

Thank you - so if I understand right, you'd suggest researching/visiting some solicitors while starting to get my property search more under way, but then actually "hiring" one (which is "appointing", I take it?) when I'm ready to offer.

I'm sure they would also be able to advise me on when to get the cash lined up and ready to go, etc.

(Sorry if I sound like I'm just parroting stuff back here - it's all quite new to me so I just want to make sure I'm understanding!)

Yeah, you want to look like a proactive buyer who's on the ball. You don't want to offer and they say give us your solicitor details and you say ah, I've not got one yet.


When you find one you like, say "I'm still viewing properties, but would like to instruct you when I find one I want to buy". They may want to take further details from you at that point, or may just say "sure, give us a ring when you've found somewhere". 'Appointing' means you're choosing them but they're not to start work yet and you won't incur costs. Once you instruct them, they will begin work and you will likely incur charges if you pull out of the purchase.


There will be money laundering checks they will have to go through with you once you start the buying process to prove where the money has come from and its source. That is standard and unavoidable.

eddddy

In the first instance, ask a few solicitors for quotes (these might include solicitors recommended by friends etc.)


They'll need to know the rough price of the property, and the tenure (i.e. freehold or leasehold).

So maybe explain that you're just starting your property search, and you'd like 2 conveyancing quotes:

1. Buying a leasehold flat for £400k without a mortgage
2. Buying a freehold house for £400k without a mortgage

They will tell you what their legal fees are, and most solicitors will also give you a list of other costs, like searches and stamp duty etc.

You can then decide your shortlist - and contact them if you want.

Obviously, it's not always sensible to decide based on price alone.

davidmcn

eevamaija wrote: »

Currently the money involved is still with my parents rather than in one of my own bank accounts. (They live in Canada and I live in the UK, which could possibly complicate things a bit more.) When registering with agents, looking for a solicitor, etc, do I need to offer an immediate guarantee that I hold the funds or can access them? Or would this only be necessary later on – ie. when making an actual offer?

When you come to make an offer, agents might want more reassurance that you can actually lay your hands on the money. If your parents can transfer the money to you now, that may help.

For anti-money-laundering purposes, the solicitors are likely to need a paper trail for the money to demonstrate where it originally came from (probably going back a certain number of months at least), and ID for your parents as well as yourself.

eevamaija

davidmcn wrote: »

When you come to make an offer, agents might want more reassurance that you can actually lay your hands on the money. If your parents can transfer the money to you now, that may help.

For anti-money-laundering purposes, the solicitors are likely to need a paper trail for the money to demonstrate where it originally came from (probably going back a certain number of months at least), and ID for your parents as well as yourself.

Thanks, this all makes sense. I have been reading up a little and I can also see that the anti-money-laundering checks are more stringent when the money comes from overseas/outside Europe, which it is in my case. However, as my parents are organised folks I imagine (and hope) that going through the necessary checks and proofs would be more tedious than actually difficult to achieve.

eddddy

davidmcn wrote: »

...and ID for your parents as well as yourself.

That's a great point.

Ask your solicitor really early on how they want to check ID for your parents in Canada, and how they want copies of Canadian bank statements certified.

That became a major headache for me recently. Passing the ID checks for somebody abroad took longer than the whole of the rest of the conveyancing process. (But it was a non-English speaking country. So hopefully, Canada will be easier.)

I don't think the solicitor had experience of foreign ID checking previously - which didn't help.

lalala1512

eevamaija wrote: »

-Currently the money involved is still with my parents rather than in one of my own bank accounts. (They live in Canada and I live in the UK, which could possibly complicate things a bit more.) When registering with agents, looking for a solicitor, etc, do I need to offer an immediate guarantee that I hold the funds or can access them? Or would this only be necessary later on – ie. when making an actual offer?
My situation was exactly the same as you. I asked my parents to write and sign a letter stating:
1. They were willing to gift me the money for a house
2. The house would be for me and they would not be involved in the house-buying process or would want to take ownership of the house,
3. The money can be sent over immediately
4. A brief line disclosing the source of the money.

Once I had my offer accepted and instructed my solicitor, I then sent the letter, parents' bank statements and our IDs (national IDs, parents' marriage certificate, my birth certificate, my passport and UK work visa). My solicitor then did the AML and ID check but they did not carry out any check on the source of fund (which surprised me). All checks cleared and roughly 1 month before exchange my parents then sent the money over to my bank account. The EA also asked me to provide proof of fund when the offer was accepted so I also sent them all documents listed above. All the documents were notarised, scanned and sent via email. Neither my solicitor or EA asked to see the hard copies but you probably still need to have the hard copies with you just in case

-At what point do I need to engage a solicitor? I assume that a solicitor is still needed for conveyancing, etc even if the process is simplified without a mortgage.
I looked for a solicitor after I had my offer accepted. I would however, recommend searching for a solicitor before placing your offer. Giving them what offer price you have in mind so they can quote.

Essentially, I would love some advice on finding an IFA who could help me out even with advice as to the process. And if anyone has been in a similar position to mine, your advice would be much appreciated!

See my comment in green