Buying your first home can be extremely daunting, but at Howells Solicitors, we believe it needn’t be confusing. Each month across the UK, we complete property purchases worth over £50million, carrying out each of these transactions quickly and efficiently. With this in mind, we thought that in order to help out those climbing onto the first rung of the property ladder, we’d share our wealth of experience and put together this simple guide.
When You Start Thinking About Getting on the Property Ladder
Saving for a Deposit
Before you even start looking for a property, you will need to save up for a deposit to put towards its cost. When doing this, it’s helpful to have an idea of the cost of the home you would like to buy, so you will need to spend time researching what is available in the area you would like to live.
At the moment in the UK, you will need to save at least 5% of a property’s value before you can apply for a mortgage (usually as a part of the Help to Buy Scheme or the UK Mortgage Guarantee Scheme, which you can find out about here). Those who are able to save more, however, will have access to more competitive mortgages, and the average deposit for first-time buyers is 20%.
A person is self-employed if they run their business for themselves and take complete responsibility for its success or failure.
Self-employed people do not have the employment rights and responsibilities of employees as they are their own employer. This negates the necessity for a contract of employment between two separate parties (employee and employer) and means that a self-employed person must decide for themselves things like how much to charge and the amount of holiday they should take.
Being self-employed, therefore, means forfeiting the right to:
• statutory sick pay
• maternity, adoption and paternity leave and pay
• the right not to be unfairly dismissed
• statutory redundancy pay
• the National Minimum Wage
• rest breaks, paid holiday and limits on night work
• protection against unauthorised deductions from pay More...
What is Capital Gains Tax?
Capital Gains Tax (CGT) is a tax that’s payable on any profit made after selling assets. It is declared and paid through a Self Assessment tax return.
Assets that are subject to Capital Gains Tax if sold at a profit include:
• Properties – including second homes, buy-to-let properties and agricultural land
• Business assets
• Personal possessions worth more than £6,000 which are not classed as “wasting assets”.
A “wasting asset” is one which has a limited lifespan, of 50 years or less.
CGT also applies to any properties that you own and sell overseas, so long as you are a resident of the UK.
What’s exempt from Capital Gains Tax?
If you’re facing redundancy, it can be a trying and difficult time. Here’s the Howells’ essential guide to the redundancy process:
What is redundancy?
Redundancy occurs when your employer dismisses you after deciding that your job is no longer necessary in the business.
There are a number of common reasons for getting made redundant, but it can include:
• New technology making your job unnecessary
• The role you were hired to perform no longer exists or the need for such a role has diminished
• Employers needing to cut costs
• Companies folding, moving to a new area or being bought by another business
Redundancy is very rarely to do with the employee’s ability to do the job. However, you’re entitled to know exactly why you’re being made redundant without any prejudice from your employer. They may include some disciplinary reasons such as poor attendance or bad work performance but your dismissal mustn’t be because of these motives alone. More...
If you’re struggling to scratch together the deposit to buy a home in Wales, then the Help To Buy scheme could be the assistance that you need. The new government regulation offers thousands of people across Wales the chance to own something that you can really call home.
What exactly is it? How does it affect people in Wales?
What is the Help To Buy scheme?
Help To Buy consists of two separate initiatives which aim to make it easier for people to buy their own home. The two parts both present different ways for people with small deposits to find a mortgage in Wales. Those two parts are:
• UK Mortgage Guarantee Scheme
• Help To Buy Wales
The UK Mortgage Guarantee Scheme
Available for all properties across the UK up to a value of £600,000, this government initiative allows any first-time buyer or homeowner in the UK arrange a mortgage with a lender with a deposit of just 5%. More...