Types of property sold at auction

Most properties can be sold at auction, but there are some types that are more likely to be put to auction, rather than through more traditional methods.

• Properties with renovation potential – Developers looking for a property to modernise or refurbish often seek out opportunities at auction
• Land for building on – Plots and land for development (often coming with some planning permission) are sought after at auction
• Property selling for less than market value – Sellers looking for a quick sale or properties that have been repossessed
• Properties that have been left empty

Buying property at auction

For those of us who have watched Homes Under the Hammer, it’s clear that there is a buzz and excitement about buying property this way and there are certainly advantages.

• Property is often cheaper and you are aware of what the other buyers are offering, so it’s more transparent
• The sale also goes through quickly
• In some cases, the auction may accept offers before the event itself takes place

However, if you’re not familiar with the auction process, it can seem daunting and it’s best to do your research beforehand.

• Due to the increased speed of the transaction, your mortgage or finance should be in place before considering a bid. You should have discussed that you are looking at auction property with your lender as it can change the terms of the loan
• Be willing to take on a project. Often, the properties sold at auction will be in need of renovation. You can arrange to view the property and review the Home Report in advance of the auction. You may also want to arrange your own survey and get some estimates for work before you decide to bid
• Properties can be highly attractive to buyers so it can be highly competitive

The auction process

Auctions take place across the country regularly but you do not always have to be physically present on the day. You can bid over the phone or pay your solicitor to bid on your behalf. In some cases you may be able to bid online. The methods available to you will vary depending on the agent handling the sales auction so it is best to contact them directly. This is a good idea anyway, especially if you have never been to auction before. The agent will be able to offer advice on the process and what you should do – and allay your fears that you might accidentally sneeze and make a purchase! It’s also a good idea to go along and just observe the first time to get a feel for how it works.

Search auction properties at s1homes.com to find your next potential property.

Main types of tenancy agreements

Short assured and Assured are the main types of tenancy agreements in Scotland. Landlords with these types of agreements must provide tenants with a written tenancy agreement that is fair and easy to understand. This forms the contract between the landlord and tenant and sets out the legal terms and conditions for both sides.

Short-assured

This is the most common type of tenancy in the private renting sector in Scotland and begins with a term of 6 months or longer. Once the first 6 months are up, the tenancy can be renewed for a shorter period. For a tenancy to be short-assured, a form called an AT5 notice must be given to the tenant before they sign the tenancy agreement or move in.

Assured

From the start of the agreement, this type of tenancy is classed as ‘contractual assured tenancy’ for a fixed period of time. It automatically becomes a ‘statutory assured tenancy’ if:

• The landlord issues a notice to quit because they want to change the agreement but the tenant stays in the property
• The fixed period covered by the tenancy comes to an end and the tenant stays in the property.

What is included in an agreement?

For short-assured and assured tenancies the agreement should include:

• Landlord and tenant names
• Rental property address
• Rent price and how payment is made
• Deposit and how it will be protected
• Length of lease
• Responsibilities for repairs
• Responsibilities for bills
• A statement for the tenant stating that antisocial behaviour is a breach of the agreement
• How to end the tenancy agreement (how much notice is required by the landlord and by the tenant for moving out of the property).

It may also contain information about the furniture in the property, rules around pets or smoking.

Depending on the type of tenancy, the landlord and tenant will have different rights and responsibilities so it’s important to have those clear from the beginning of the tenancy.

Other types of tenancy agreements

Common law

For cases where the tenant is living with the landlord. Although no written agreement is needed, it is recommended that there is a lodger agreement put in place.

Regulated tenancies

Tenancies created before 2 January 1989 are usually this type. Some of these still exist but a new one cannot be created. With these agreements, landlords or tenants can ask Rent Services Scotland to set ‘fair rent’ with a form called RR1.

Changes to tenancy agreements

If the landlord wants to make changes to the tenancy agreement then that will need to be agreed with the tenants.

Further information for tenants and landlords in Scotland can be found in the Private Renting section of The Scottish Government website

For thousands of properties to rent throughout Scotland, search s1homes.com

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Many landlords are happy to manage their properties by themselves, but there are those who would rather employ a letting agent. There are agents across Scotland, so how do you choose which one is best for you?

Here are some considerations.

1.       Decide what level of service you need

There are different levels of service offered by letting agents. Your choice will depend on how much support you think you need and how much you are willing to pay.

Each agent will have their own packages but here is a guide to the types of services offered.

• Let only is likely to cover marketing your property, viewings, tenant credit and reference checks, tenancy agreements, inventory, collection of deposit and placing the deposit into a tenant deposit scheme.
• Full management will usually cover all of the services for a let only but will also deal with ongoing management of the property. This will cover the transfer of rental income and arranging repairs and maintenance on your behalf.

Some agencies also offer guaranteed rents if your property is empty. You will need to make a judgement as to whether you will actually benefit with this type of arrangement before signing up.

2.       Ask for a breakdown of fees

Some services will have a fixed price, others may be a percentage of rent. Some have upfront fees or additional services for an extra charge. Make sure you understand the options available to you and the costs associated with each before selecting an agent.

3.       Think about the type of tenant you are looking for

Your target customer will also influence the agent you choose. Some are specialists in short-term lets, so think about how long you want to let your property for. Others are experts in student lets, so consider whether you are offering your property as an HMO.

4.       Opt for local knowledge

Choose an agent that knows your area, especially if your rental property is not close to where you live or somewhere you don’t know well. They will know the typical rental values of properties in your area and will have the network of contacts for local tradespeople too. This will be helpful if you decide to have an agent manage the maintenance of your property.

5.       Choose one that advertises on the key property portals

s1homes.com is Scotland’s biggest property site so you want to make sure to choose an agent that advertises on the website. We also have a tool for landlords to help find a letting agent in your area.

6.       Ask around

It is always good to get recommendations from other people, particularly if you are new to being a landlord. Speak to friends, family and colleagues to get a view on their experiences. Speak to a few different agents to compare their services and pricing before making a decision.

To find a letting agent in your area, visit s1homes.com

What is Land and Buildings Transaction Tax?

On 1 April 2015, Land and Buildings Transaction Tax (LBTT) replaced UK Stamp Duty Land Tax (SDLT) in Scotland, under new devolved powers contained in the Scotland Act 2012.

How is this tax different to UK Stamp Duty?

At introduction, the Scottish Government said that 9 out of 10 taxpayers will be no better or worse off under this system. It is a graduated tax rate which works in a similar way to income tax and is designed so that the charge is more proportionate to the price of the property.

When is LBTT payable?

Residential properties under £145,000 will not be subject to the tax. Rates applied above this purchase price can be seen in the table below. The tax is only payable on the amount above the threshold.

E.g. If the property cost £150,000, 2% tax would be applied to £5,000.

Revenue Scotland has developed online calculators for reference.

How will LBTT be paid?

LBTT is usually paid on behalf of the seller by their solicitor, as part of the conveyancing transaction. The final responsibility lies with the buyer so check with your solicitor if they will do this for you. If not, you will have to submit the form online. Practical advice for buyers submitting a return can be found at Revenue Scotland.

Search properties for sale in Scotland at s1homes.com

If you are a tenant or landlord in Scotland, read on and all will become a bit clearer.

What is a House in Multiple Occupation (HMO)?

An HMO is a property that is shared by three or more people who are not members of the same family. There are some exceptions, for example residential or nursing homes but that is the general criteria.

Who needs an HMO licence?

Landlords with properties meeting the criteria above must get an HMO licence from the council for the area where the property is situated. The council will advise of the application process and associated fees for that local authority.

Who issues an HMO licence?

The local council for the property area will issue the HMO licence. They will arrange to visit the property to ensure it meets the required standards, based on Scottish Government’s Guidance on Mandatory Licensing of Houses in Multiple Occupation. These standards include the provision of adequate facilities for each resident and compliance with fire safety but there is a series of checks that they will carry out.

What is the purpose of an HMO licence?

The purpose of the licence is to ensure that the accommodation is well-managed and safe. The checks to obtain the licence will cover the living accommodation and its owner or letting manager, to ensure they are fit and proper to hold the licence.

How do I find out if my property has an HMO licence?

As a tenant / prospective tenant, in most cases rental properties will be advertised as non-HMO or HMO licensed where appropriate. You can also just ask the landlord or contact your local council as they will have a list of all the landlords licensed for the area.

What happens if an HMO doesn’t have a licence?

It is a criminal offence to have a property as an HMO without a licence and the maximum fine is £50,000. The local council can inspect a property without an appointment if they think it is operating without a licence. If the landlord’s licence has been suspended or revoked, this means the property is no longer suitable for rental as an HMO. Refer to your tenancy agreement or take advice if you have questions about the effect on your living arrangements.

The Scottish Government website has more detailed information about the legislation if you want to dig a bit deeper.

For more renting tips, read Renting advice for tenants in Scotland.

Search properties for rent across Scotland at s1homes.com

You will have looked at the photos online or in a printed schedule, but it’s important to visit and take a thorough look around any property you are interested in buying. Here are our top ten tips for viewing properties.

Before the viewing

1.       Make an appointment with the estate agent or private seller to view the property. They will give you availability for a private appointment, or they may invite you to an open house where you will tour the property along with other interested parties.

2.       Take a walk or drive around the area. It’s important to make observations about the availability of parking and how well-kept the property and surrounding areas are. This is also a good idea if you are moving to a new area so you can see if it is the kind of place you want to live.

3.       Think of questions that you want to ask of the seller. It’s a good opportunity to ask about typical utility bills, factoring fees and the neighbours. This is particularly good advice if you are a first-time buyer and are not sure what you will expect to pay out in the month.

During the viewing

4.       Download and print our handy checklist. Taking this list along with you will help you remember what to look for. It will also help you remember the properties after the viewing – especially if you have seen lots.

5.       Take a friend or relative along. They might think of questions that you haven’t, or notice things that you don’t and it’s always good to have a second opinion.

6.       Ask those questions that you have prepared in advance. Others might occur to you during the appointment so ask them too. It’s in the seller’s interest to be helpful and offer this information.

7.       Be respectful of the seller.  Be aware that they might be shy or uncomfortable having viewers in their home or on the other hand, be overly keen.  In some cases, it will be the estate agent conducting the viewing and they will be much less emotional about the property.

8.       Don’t be put off by the décor.  Try and see past the furniture, paint and wallpaper that is not to your taste. Look at the shape of the rooms, the storage and the potential for you to make the space your own.

After the viewing

9.       Arrange a second look. If you liked the property and are considering making an offer, it is a good idea to return for a second viewing. Try to go at a different time of day to see any differences in parking, behaviour of neighbours and light in the property.

10.   Take learnings from the viewing. If a property wasn’t for you, it’s a good idea to note on your checklist what you liked about it and what put you off. This will help in your search and arranging further viewings to make sure you get what you are really looking for.

Search property across Scotland at s1homes.com 

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Once your offer has been accepted and your entry date has been agreed, it’s time to think about moving. It can be stressful, but making lists is key to keeping you as organised as possible.

Here’s our moving house checklist of what to do and when, in the weeks leading up to your move – and on moving day itself.

Preparing for moving day

1. Clean out your cupboards. Try to use up the contents of your cupboards, fridge and freezer – it’s less to pack and allows you to defrost your appliances.

2. Start packing

• Collect boxes for packing and bubble wrap to protect fragile objects
• Have a clear out and donate unwanted items to charity
• Start packing non-essentials
• Pack a box to keep handy for the first night in your new home – tea, coffee, snacks, cleaning products and toiletries
• Mark fragile on boxes containing breakables
• Mark all boxes with the room that they will be going in at your new property

3. Keep stress to a minimum and plan for someone to look after your pets and/or young children on moving day

4. Notify utility suppliers, companies related to your finances (banks, credit cards, your employer etc.), and the DVLA of your new address

5. Gather up and keep all your important documents (passports, marriage certificates) safe

6. Collect spare sets of keys from relatives and friends

7. Write directions for your moving company, provide a plan of your new home and organise parking for the removal van

On moving day

1. Finish packing anything that you have still been using (bedding, toiletries etc.)

2. Disconnect appliances

3. Show the removers round your home and explain what has to go and what has to be left behind

4. Lock up and make your way to your new house

5. Show the removal team round your new home and explain what has to be put where

6. Check the van to be sure it has been emptied of all your belongings

7. Make up the beds

8. Relax with a celebratory glass of champagne and leave the unpacking until tomorrow

Happy moving!

If you’ve sold your property but haven’t found somewhere new yet or you’re thinking about moving, search properties for sale and to rent in Scotland at s1homes.com.

Scotland’s private rental sector faced a shake up a few years ago when the Tenancy Deposit Schemes (Scotland) Regulations were introduced, meaning that all deposits had to be paid into a Scottish Government approved tenancy deposit scheme.

Three years since the new laws came into force, I’m pleased to say the majority of the nation’s landlords now comply and use deposit schemes, meaning that when you view a rental property on s1homes.com, it should be registered with one of the three approved deposit schemes.

SafeDeposits Scotland was one of three organisations formed to hold this money, and since then we’ve had to do a lot of work in getting the message out that not only is it not optional, it’s an important part of the rental process and is in effect, a tenant’s right.

Of course, there are still some landlords yet to sign up, but failure to do so will catch up with them eventually as potential tenants now rightly expect their deposit to be protected by a neutral party with an independent dispute resolution service.

Although landlords are legally obliged to abide by the rules, the approved deposit schemes out there – ourselves included – must add real value to the rental process and make it as easy as possible if we want compliance rates to rise further.

This means doing more than just collecting the money. It’s about enhancing the experience of both the tenant and the landlord. We provide peace of mind that the money in this important transaction is safely protected and will be fairly returned or distributed.

We are there for both parties from the moment a landlord opens an account right through to a tenant moving out, whether there’s a dispute over the money or not.

The process has to be hassle free and the dispute resolution service has to do what it says on the tin, i.e. resolve disputes independently, fairly and quickly.

So far SafeDeposits Scotland has secured over £63m worth of deposits not because landlords have no choice (as they do) but because we’ve been able to prove our worth to them. There has to be a real business benefit to placing your deposits with a third party.

So whatever side of the rental market you’re on, whether you’re renting and want to know your money is in a safe place, whether you’re a landlord who hasn’t already signed up, or whether you have but want to make sure you’re getting the best service for you and your tenants, we’ll be at the other end of the phone when you need us.

Jen Paice is CEO of SafeDeposits Scotland, Scotland’s only not-for-profit tenancy deposit scheme. See www.safedepositsscotland.com or call 03333 213136 for more details.

In recent years, mortgage lending has become stricter. In the past, lenders multiplied your salary by three to five times – known as loan-to-income ratio – to decide how much to offer you. Now, mortgage lenders will cap the amount you can borrow at a maximum of four and a half times your income but will also calculate your affordability of the loan based on both your income and your outgoings.

As soon as you are considering buying a property you should start finding out about mortgages. This will give you a guide to the price bracket to search in and will mean you can act fast when you find a property you like.

How much to borrow?

• Be realistic about how much you can afford to pay back on a monthly basis. Don’t automatically take on the maximum that you are offered without being sure that you can comfortably manage the repayments.
• Keep in mind that interest rates can change, therefore your monthly payments may increase or decrease.
• Allow for changes in your salary or work circumstances. For example, if you plan to reduce your working hours or take a break to start a family
• Think about other expenses associated with owning a house such as council tax, utility bills, insurance etc.

Deposits

The amount of deposit you have, (or equity in your property if you’re remortgaging) will influence how much you can borrow and at what rate. In most cases you will need at least a ten per cent deposit.

The higher the deposit you have, the better your mortgage rate will be. Having a larger deposit also reduces the risk of negative equity (where the value of your home is less than the outstanding mortgage).

Remember, to take other costs associated with buying a new property into consideration when working out how much of a deposit you can afford, for example, legal fees.

Getting a mortgage

From 26 April 2014, the Financial Conduct Authority (FCA) introduced new processes for getting a mortgage. The new rules were introduced to avoid people falling behind with payments or losing their home as a result of over borrowing.

Anyone selling mortgages must be registered with the FCA. You can check the FCA register here.

Things to watch out for:

• When talking to lenders or mortgage brokers ask if they are offering information or advice. To offer advice they must have undergone specialist training
• Check how interest is calculated. There are many different ways to calculate interest and this can make a difference to your monthly payments
• If you want to switch your mortgage to a better deal or pay it off early there may be redemption charges
• If a mortgage is described as CAT (charges and access terms) standard, this means it adheres to government standards and should be reasonable value with no hidden charges.

Once you have chosen the mortgage you want, make an appointment with your lender. You may need to take along the following:

• Three months pay slips from your employer (or three years accounts if you are self-employed)
• Proof of the length of your contract
• Copies of three months bank statements
• Proof of twelve month mortgage or rent payments
• Copies of insurance policies (building, contents and life insurance)

Once you’ve filled in the application form the lender will consider all of your income details and do a credit check. They will then give you an acceptance in principle which is useful to show a seller. However, this does not guarantee that you will definitely get a mortgage for a particular property.

The final application will not take place until you have had an offer on a property accepted.

Types of mortgages

There are many different types of mortgage available and it’s worth comparing and speaking to different lenders. There are a number of mortgage comparison websites which can be useful as a start and you can get advice from an intermediary.

An intermediary could be:

• An independent financial adviser (IFA)
• An estate agent
• A solicitor
• A mortgage broker
• An accountant.

Features and benefits of mortgages vary greatly, but no matter which mortgage you choose you will have to repay the amount borrowed plus interest.

Repayment mortgages

• Monthly payments are used to repay the amount borrowed and the interest
• Monthly payments are typically higher
• At the end of the term, the loan is guaranteed to have been paid in full.

Interest only mortgages

• Monthly payments used to repay the interest only
• At the end of the term, the capital is still outstanding and must be paid
• Usually, money is deposited into a long term savings plan for the length of the term ensuring money is available to repay the capital
• The buyer is liable for the shortfall.

Over the term, there probably won’t be much difference in the total cost of the mortgage. However, it’s worth remembering that only repayment mortgages guarantee that your monthly payments will cover the entire loan.

Most mortgages are paid back over a 25 year term. However, if you can afford higher monthly payments, it’s worth reducing the term which means you’ll pay less to the lender in interest. It’s also possible to have a longer term which will lower your monthly payments but you’ll pay back more in interest.

Bridging Loans

If you are buying and selling a property at the same time, you may need to take out a bridging loan to ensure that you have the funds to continue with the purchase. This means that the bank will lend you the money for your new home before your current home has sold, like a very short-term mortgage.

However, it can be a very expensive solution so it is worth speaking to your mortgage adviser to get more information.

What to do if your mortgage application is rejected

There could be many reasons your mortgage application is rejected; credit rating, income, employment status, problems with the property. You can ask the lender for reasons for the rejection. You may want to try other lenders.

If the reason is because of your credit history it’s worth checking with credit agencies that they hold the correct details for you.

If you feel you have been treated unfairly by a lender or broker you should approach them first to try and resolve the problem. However, if there are no suitable resolutions you make a complaint to the Financial Ombudsman Service.

 Search properties for sale across Scotland at s1homes.com

There are some small things you can do to make your home more appealing to a prospective buyer, without spending a fortune.

Remember that you are in competition with other properties in the area of a similar size and value so small things you can do to make yours stand are surely worth it.

Here are our top tips for ‘staging’ your home:

1.    Declutter

Get rid of excess furniture, kitchen appliances and personal items. Prospective buyers want to be able to see the size of the rooms, visualise their own furniture in the property and see if they could imagine living there. Don’t make it too clinical though, leave some personality as it can inspire buyers for what they could do with the space.

2.    Tone down bold colours

You don’t need to redecorate your entire home but a fresh coat of paint in a neutral colour can help make your house brighter and create the illusion of space.

3.    Clean and tidy up

It seems obvious but you would be surprised at the number of people who leave washing hanging up, dishes in the sink and crumbs on the kitchen surfaces. Clean everywhere, tidy up and get rid of any unpleasant smells.

4.    Make minor repairs

You might have got used to a broken door handle, a light bulb or a hole left in a wall from a picture hook, but a buyer will notice them. Take a trip to your local hardware shop, get out the filler and make those minor repairs.

5.    Remove all traces of pets

You might be an animal lover but it doesn’t mean your viewers are. Call in a favour for friends or family to look after your pets and get rid of litter trays, bowls and baskets.

6.    Put on all the lights

Once you have tidied, cleaned and painted, show off your hard work by making your home as bright as possible. You could even light some candles.

7.    Consider the temperature

If it’s a warm day (unlikely in Scotland, but you never know), open the windows and get some air in. Likewise if it’s chilly, put the heating on. If your buyers are looking at multiple properties you don’t want to be remembered for the wrong reasons.

8.    Don’t forget the outside

Prospective viewers often drive by or walk round an area before arranging a viewing. Cut the grass, get rid of weeds and sweep the path. If you live in a flat, try as far as possible to make sure the area at your front door is clear. If you have one, speak to your factor about any communal areas that need tidied up. In the industry this is known as ‘curb appeal.’

Anything we have missed? Let us know your hints and tips.

If you are preparing your home for sale, s1homes has a full directory of trusted estate agents in Scotland.

And if you are looking to buy, there are thousands of properties to choose from.

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