FTB - Recently relocated to Scotland, first steps..

Hovis_Granary

Hello,

As title suggests, I'm a prospective FTB who recently relocated from England to Scotland (for both work and lifestyle reasons if relevant!). I'm completely unfamiliar with how things work here and looking for general advice on a few questions to get the ball rolling on getting someplace of my own.

I've been paying into my HTB ISA which is now nearly maxed out, the account was created in England and I was paying into it whilst working in England. I haven't been able to find an answer (short of actually speaking to the bank..) but do the same terms still apply and work for buying a property here in Scotland, where the rules seem to be a bit different? (EG: +25% bonus, max 12k, value up to 250k outside London). 

I also have additional available funds through a mix of parental gift and other cash savings. For simplicity let's say these total 35k. 

In Scotland they tend to have a blind bid system where they receive "offers over" whatever the value on the homebuyers report is. I don't know enough about the market yet to understand if or how much over I will need to offer, however, my understanding is that I'd only be able to get a mortgage for the value on the homebuyers report and not the additional "offer over" bit.

For a "offers over" 200k house: 35k (AF) + 15k (HTB ISA) = 50k ,+ 150k mortgage = 75% LTV, however, theoretically, let's say I was advised that the realistic winning bid would actually be 220k. I presume that I then need to use the additional available funds to cover this 20k difference. So now I would have 30k to put towards 200k with remaining 170k mortgage (85% LTV) and 20k cash straight to seller?

The whole offers over thing is a bit confusing as it makes it hard to judge a) what the true value of a property is, and b) what actually is my price range I can consider, I would like to take advantage of the favourable rates associated with better LTV ratios. 

Many thanks in advance for any help or advice in trying to get my head around this!

K_S

@Hovis_Granary

H2B ISA in Scotland - Afaik, a LISA works the same way in England and Scotland, I assume its the same for the H2B ISA as well.

Mortgage - Just like in England, the lender will value the property at the lower of the actual purchase price and the value returned by the valuer (in Scotland, the value given on the Home Report). That will be the number on which LTV, etc. is based. 

So for a house with an HR value of 200k, purchase price of 220k and (assuming a deposit of 50k), you'd need a mortgage for 170k. The LTV for the lender will be 170/200k = 85% LTV. 

Everything else proceeds as normal, you transfer the deposit to the solicitor, they add it to the mortgage funds and pay it through to the vendor (and vendor's lender if it is mortgaged).

If you want to reduce your deposit, you could go all the way to 95% LTV on the mortgage which will give you a max loan size of 190k (95% of 200k) so leaving you to find a 30k deposit. I hope that makes sense.

Hovis_Granary said:

Hello,

As title suggests, I'm a prospective FTB who recently relocated from England to Scotland (for both work and lifestyle reasons if relevant!). I'm completely unfamiliar with how things work here and looking for general advice on a few questions to get the ball rolling on getting someplace of my own.

I've been paying into my HTB ISA which is now nearly maxed out, the account was created in England and I was paying into it whilst working in England. I haven't been able to find an answer (short of actually speaking to the bank..) but do the same terms still apply and work for buying a property here in Scotland, where the rules seem to be a bit different? (EG: +25% bonus, max 12k, value up to 250k outside London). 

I also have additional available funds through a mix of parental gift and other cash savings. For simplicity let's say these total 35k. 

In Scotland they tend to have a blind bid system where they receive "offers over" whatever the value on the homebuyers report is. I don't know enough about the market yet to understand if or how much over I will need to offer, however, my understanding is that I'd only be able to get a mortgage for the value on the homebuyers report and not the additional "offer over" bit.

For a "offers over" 200k house: 35k (AF) + 15k (HTB ISA) = 50k ,+ 150k mortgage = 75% LTV, however, theoretically, let's say I was advised that the realistic winning bid would actually be 220k. I presume that I then need to use the additional available funds to cover this 20k difference. So now I would have 30k to put towards 200k with remaining 170k mortgage (85% LTV) and 20k cash straight to seller?

The whole offers over thing is a bit confusing as it makes it hard to judge a) what the true value of a property is, and b) what actually is my price range I can consider, I would like to take advantage of the favourable rates associated with better LTV ratios. 

Many thanks in advance for any help or advice in trying to get my head around this!

comeandgo

In Scotland you need a solicitor to put your offers in and they are usually very good at giving advice on how much to offer.

oldernonethewiser

Offers over is a complete lottery and varies wildly by location.

The advertised "offers over" price is just a headline to get you interested and will have little relationship to the price the sellers actually want.

Every seller must have a Home Report which a prospective buyer is free to access. 

Some Estate Agents need to be contacted to get them but many can be found here

https://www.onesurvey.org/find-a-home-report/

You are correct in that a mortgage (usually) will be based on the Home Report amount and if you bid higher then that is money you need to fund youself.

Not everything ends up being over the Home Report figure (just to confuse matters even more)

Saw a flat advertised on the south side of Glasgow ealier this week.  Fixed price of £350,000. Home report value of £380,000

Hovis_Granary

Thank you all - I understand there are some fixed price properties on offer, these tend to be new builds which I'm not as interested in. I would prefer a larger deposit (small % or nothing to pay over the value given in HBR) as I'd prefer the lower monthly repayments. 

oldernonethewiser

To clarify - Home Report, provided by the seller. 

There isn't a Home Buyers Report

theoretica

You need a solicitor early on as estate agents will not take as official any offers from you.

Even while many properties do go a closing date, not all do.  Get in first with an offer they like and it might be accepted.  But also shows your hand - so worth asking if it will definitely go to a closing date or how interested they would be in a direct offer.  It will really depend on the market in the area - and also how much over the odds you are prepared to offer.

There is a thing called noting interest - which you get your solicitor to do officially to the estate agent.  Basically a 'you might want to let my client make an offer before accepting another offer' and you get told about closing dates that way. 

Caz3121

what part of Scotland are you looking in? some areas are far more likely to be in the '15%-20% over the home report' bracket than others.
there is a guide here on the buying process https://espc.com/advice/buying

Hovis_Granary

Caz3121 said:

what part of Scotland are you looking in? some areas are far more likely to be in the '15%-20% over the home report' bracket than others.
there is a guide here on the buying process https://espc.com/advice/buying

Thank you for the article. Somewhere north of Glasgow would be ideal, East Dunbartonshire stands out (but not the mega posh bits), we quite like Kirkintilloch, Lenzie, Bishopbriggs, possibly Cumbernauld. It's not set in stone though.