Buying a property
in Scotland
How buying a property north of the border differs from the rest of the
UK
It used to be that moving house ranked third on the list of most stress-inducing
situations in one's life (after death in the family and divorce). In recent
years, though, the whole fretful business of buying and selling seems to
have intensified; a survey on most stressful life events by insurance company
Unum found that it drove 44% into a frenzy, compared to 15% who considered
changing jobs as their most stressful experience.
Frequent have been the calls for changes to the England and Wales home buying
system, so as to eradicate or minimise its drawbacks, brinkmanship and general
gut-churning villainy. Frequent, too, have been the comments that the Scottish
system is so much better, as well as being more respectful of blood pressure
indices. But is it?
The bid system
The essence of the system north of the border is the bid; you bid an offer
price for the property you're interested in. All bids are then opened on
the given deadline and the best offer wins. Simple; no gazumping, no
double-dealing, no price reductions for a quick sale, no cash offers that
fail to materialise at the eleventh hour.
But house buying in Scotland has its own problems, the chief one (if you
discount the nail-biting tension inherent in whether your bid will be successful)
being the amount of unproductive money that can be involved. You pay the
cost of surveys, searches and mortgage valuations before you know the bidding
outcomes and there's no refund.
As elsewhere, properties in Scotland are sold under the principle of caveat
emptor, so a survey/valuation report is essential. On the plus side, with
the Scottish system comes a high level of confidence that once your offer
is accepted, the sale will proceed.
Obviously, though, in a buoyant and competitive market, such a system can
result in multiple surveys and valuations being carried out on the same property
and consequent wasted costs for unsuccessful bidders. The tendency, then,
is for many buyers to opt for the cheapest form of survey report and risk
the chance of unexpected repairs and maintenance after the purchase.
Which survey to choose?
There are three main types of report, in ascending order of cost (which also
varies according to location/value of the property). The Valuation Report,
produced for the mortgager and paid for by the potential buyer (circa £150)
identifies any major defects. Next up, the Homebuyers Report and Valuation
commissioned by the purchaser, perhaps though their solicitor or IFA, provides
more detailed information about condition and state of services. Finally,
there's the comprehensive Building Survey, conducted by a chartered surveyor,
architect or builder, which investigates all elements; this does not include
a valuation and costs around £1,000.
In 2002 the Scottish Executive Central Research Unit published a report on
the country's house buying and selling process, the findings of a survey
amongst first time buyers, 'experienced' buyers and professionals e.g. solicitors
involved. The general view: for the first timer it is a huge learning curve;
46% of the survey's house buying respondents (30% of first timers) said they
did not receive any advice.
The survey also revealed that buyers viewed fewer than 10 properties before
making a successful offer. Further, 76% were successful with their first
offer and 67% had only one survey/valuation conducted (12% of all surveys
were not followed up by an offer on the property). Two thirds of all surveys
were of the basic Valuation Report type, at an average spend of £166.
Although 64% said they were generally satisfied with the condition of their
purchase, some 25% found unexpected repairs/work required in the first year.
There was an average time of 14 weeks from 'starting to look seriously' to
making a successful offer, with the cost of house buying averaging £1,340.
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