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Your support makes all the difference.Rent Or Buy?
Following recent house price falls, could you assure me that as a potential first-time buyer, purchase is still beneficial to renting?
Nicola Whatling
Bexleyheath, Kent
l Undoubtedly in terms of monthly expenditure, comparisons today of mortgage and renting between similar property types come out in favour of purchase. However, I would suggest that this is not so much a cost issue, as one that should be based on personal circumstances. For example, if you have good career prospects, wish to remain with your current employer and want to live in the same area, then purchase would seem to be attractive. On the other hand, if you are likely to change jobs, or your work is likely to take you away from where you live, or you simply plan to travel, then you are more likely to benefit from renting.
However, it is a fact that economic considerations which may have discouraged home purchase in the early 1990s have eased with rising prices and falling negative equity, relatively low inflation and stable interest rates, and falling unemployment. These financial indicators look set to remain favourable. If you are buying, do bear in mind you may need to find a deposit but this cost could be offset by taking up one of the many special financial deals available. On a note of caution, home purchase should never be regarded again as an inevitable means of "making money".
TO survey OR NOT?
I am buying a house which is only five years old. Do I really need a survey?
Kathy Campbell
Bedford
l The house may have a 10-year warranty from the National House Building Council, but don't be misled by the apparent security this provides. The certificate is a warranty that the house was built in accordance with NHBC procedures but is not a full guarantee and can, anyway, only be enforced by the original purchaser from the builder. You may wish therefore to consider a home buyers' survey and valuation. This is a report supported by the Royal Institution of Chartered Surveyors and costs about pounds 250. So what problems could there be?
First of all think of the thousands of gallons of water that were used to build the property. This all has to dry out. For example, there may be some movement to door frames and cracks in internal plasterwork and many builders expect to have to return to carry out repairs. It may not be obvious whether cracks are genuinely only caused by this initial settlement or whether there is a more sinister cause such as roots from nearby trees. It's not only the house that can subside. There have been instances where houses have remained solid while patios, gardens, paths and even roads have sunk.
Even if the house was sound when first built don't forget that a lot can happen in five years. The occupiers may have made changes to the wiring, plumbing or central heating. They may have removed load-bearing walls, built extensions or altered the roof.
MOVING TIMES
How much does it cost to move?
Margaret Clarke
Biggin Hill, Kent
l As a rule of thumb, you should allow pounds 3,000- pounds 5,500 to cover your moving expenses.
If you are selling, you have legal and estate agency fees. On your purchase you will have to pay separate legal fees as well as land registry, local authority searches, valuation or survey incorporating a valuation, and stamp duty, which is one per cent of the purchase price over pounds 60,000.(On this last point, there is an important tip. Stamp duty on a pounds 60,000 home is nil. Stamp duty on a pounds 60,001 home is pounds 600.01.) Lastly, there are the removal expenses.
For example, according to a 1996 Woolwich survey of 50 towns across England and Wales, the cost of trading up from a pounds 50,000 to an pounds 80,000 property is pounds 3,077 while the cost of selling a pounds 100,000 home and buying another for pounds 50,000 is pounds 5,096. Both these examples exclude removal fees which may cost pounds 300-pounds 400.
Answers were supplied by a panel of experts at Woolwich Property Services and Ekins, the group's surveying services subsidiary. The panel is headed by Alan Oliver, managing director of Woolwich Property Services, and will answer published queries in future weeks on buying and selling, valuations, surveys, and market factors such as price trends.
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