As solicitor Ritu Sethi stated on the programme, the Asian philosophy, generally, is to invest and more and more are investing in property. So we spoke about the latest changes in property laws, advice for first-time buyers, and exactly how a solicitor helps you when making that big purchase.

The first important piece of information to know when thinking of investing in property is the current state of the market. Ritu explained that post the recession which lasted about three years, everything was stagnant. Now, all of a sudden, there is a boom and everyone’s looking to buy their first house or buy-to-let’s and even second houses.

At her practise, The Sethi Partnership Solicitors, Ritu and her team are experiencing an up, particularly in London. Buyers in January definitely saw their property boom this month so they’re getting great returns. The Land Registry has also reported that house prices have risen, meaning people will see a greater return on their investments.

On the day of interviewing Ritu, the Bank of England had announced that they will not be increasing interest rates from their current all-time low of 0.5 percent. Ritu explained that this means that the economy will continue to grow and house prices will continue to rise as a result.

Interest rates staying at an all-time low means it is still very feasible to get onto the property ladder. The government are also introducing new schemes and had made changes to buying buy-to-lets in favour of first-time buyers.

The Help-To-Buy scheme is for somebody who has not got any property anywhere in the world. The government puts in a monetary percentage into the home you wish to buy and that is then paid back to the government over time.

A new scheme, introduced on the 1st December, is the Help-To-Buy with an ISA. This is a homebuyers, tax-free incentive scheme where you put money into an ISA and when you are ready to put that money into a property, the government will give back a maximum of £3000. There are terms and conditions that you should be aware of and is dependent on your individual situations and positions.

Ritu gave first-time buyers some key advice:

-          Decide how much you are going to invest?

-          What is the size of the loan you’re going to get?

Buying a house is dependent on your income and affordability. So speak to a mortgage advisor to work out the finances. Establish how much you can afford then start looking.

Your affordability will depend upon the location. Property prices vary up and down the country with London being the most expensive, and it getting cheaper the further out of London you go.

Once you have sourced the property you want, see a solicitor who will advise you on the legalities. They also do a thing called ‘conveyancing’ which is a property transaction. This ensures you have a good title and are getting what you’re paying for.

 

Solicitors ask the vendors endless questions and will conduct a full report so that you know of any issues such as defects, drainage, or any damages. Although a mortgage broker does a full survey on the house, a solicitor will ensure this is done too.

Conveyancing also included paying disbursements on the buyer’s behalf for example to the Land Registry, any special searches, bank fees and more. You will receive a full written quote from your solicitor so that you know the disbursements made on your behalf.

The government have also increased Stamp Duty charges for those looking to buy their second home or second buy-to-let. This is because many are finding it difficult to get onto the property ladder because landlords are saturating the market and buying buy-to-lets as business.

Coming from a social viewpoint, Ritu stated that many do want to get onto the property ladder but are restricted because those already on it are eating up the resources. Now that there is a threshold and higher Stamp Duty, this will make people curb back on buying property who already have it, giving first-time buyers a chance.

HowStamp Duty works:

It goes up in 5 percent to 8 percent and anything less that £40,000 is at a rate of 0 percent.

Ritu’s Top Tips:

Make sure your borrowing is controllable so that if there is a property crash you’re not left in negative equity. For example, say you borrowed 95 percent and have a mortgage of £175,000 then there is a crash and your property goes to £160,000, you have minus £15,000. Negative equity is where a lot of people got caught out in the recession especially first-time buyers.

Ritu left our viewers with the advice that no matter what the government or anyone says, there is always a good time to buy. Having dealt with this field for 25 years, Ritu believes that no-one ever comes unstuck apart from during the slump recession. In Ritu’s opinion, there will not be a slump because interest rates are being held so you know there isn’t going to be a drastic change as to what’s happening already.

We hope this advice has been useful to you and wish you the best of luck when it comes to buying your property!