Buying a property in Wales: your buyer’s guide

Steps to buying a house in Wales:

- What’s currently happening in the Welsh property market? 
- Different ways to buy property
- How much deposit do I need to buy a home in Wales?
- Land Transaction Tax
- Steps to buying a new home in Wales
- Other costs associated with buying a property

Buying a property is exciting, but getting started can feel a little overwhelming. So to help you on your property journey to buying a property in Wales, we’ve put together this guide to help you get started.

What’s currently happening in the Welsh property market?

To start off, let’s have a look at house prices to offer you some current insight into the Welsh property market. Across the region, average property prices currently lie at £265,271 when coming onto the market – a 2.2% yearly increase. Additionally, you can expect that it takes an average of 74 days to sell a property in Wales.*

Different ways to buying a property

There are various methods to buying property in Wales, with options ranging from the second-hand property market, auctions, and even Help to Buy schemes offered by the Welsh Government. Here’s a brief overview of each:

• Second-hand property market: This is most likely seen as one of the more traditional ways of buying property. Thanks to people upsizing or downsizing, as their needs and requirements change, a variety of different properties become available for those looking to buy.
• Auctions: Traditional auctions, as well as the Modern Method of Auction, are becoming more popular with sellers and buyers. In traditional auctions, contracts are exchanged as soon as the bidding is over, and the buyer immediately pays the 10% deposit and has 28 days to complete the purchase. By comparison, in the Modern Method of Auction (MMoA) once the hammer falls, buyers must pay a non-refundable holding fee and draft contracts are sent. Additionally, the purchase often takes 56 days to complete and exchange contracts.
• Help to Buy – Wales: While the Help to Buy scheme in England and Scotland has ended, Wales is still offering this option to eligible home buyers and homes, with a maximum price of £300,000. Read more about it on the Welsh Government website.
• Shared ownership – Wales: This Government scheme is available to first-time buyers, those who are forming a new household or relocating for work to an area of Wales where property prices may not be suitable for your budget. To find out more about eligibility and how it all works, find more information here.
• Homebuy – Wales: Homebuy - Wales is an equity loan scheme to help those who may not otherwise be able to afford a property. It isn’t available in all areas of Wales, and there may be local eligibility criteria. Read more about it on the Welsh Government website.

How much deposit do I need to buy a home in Wales?

If you’re taking out a loan to buy a property, you will typically need at least a 5% deposit of the total property price. For example, if you’re buying a home worth £250,000, you’ll need a deposit worth at least £12,500.

Do I have to pay Land Transaction Tax?

Yes, if the property costs more than £225,000 for residential properties (if you do not own other property), as well as for non-residential land and property. However, there are different rules if you own more than one property, and there are also several exceptions when you don’t need to pay LTT. For example, if you buy a property worth less than £225,000, and don’t own another property or are buying a new lease for less than 7 years.* To ensure you have the full picture, read up on who has to pay how much LTT in the gov.wales LTT guide.

Land Transaction tax, or LTT, is set by the Government in Wales, and is the Welsh equivalent of English Stamp Duty and the Scottish Land and Buildings Transaction tax.

To gain a better understanding of what LTT is and when it needs to be paid, read our guide here.

Does LTT differ for landlords and second home buyers?

Those buying buy-to-let properties or second homes, will have to pay a higher level of LTT if you already own at least one property and are buying a residential property that’s worth £40,000 or more.

Steps to buying a new home in Wales

There are several ways to buy property, as exemplified above, below we illustrate the typical stages of the home-buying process:

1. Save for your deposit and research areas in which you would like to and could afford to live.
2. Find a property you can afford, and don’t forget to include LTT in your calculations.
3. Ensure your finances are in good condition, especially if you’re applying for a loan.
4. Once you’ve found a property you like, view the property and, if you’re happy with it, put in an offer.
5. Once your offer is accepted and your finances have been approved, we recommend you arrange for a surveyor to survey the property. They will check the property’s structural integrity, as well as any maintenance issues, including a leaking roof or subsidence. Read our guide to surveying to understand why a survey is so important and why it’s always a good idea to hire a surveyor.
6. Arrange for the deposit to be given to your conveyancer to complete the purchase.
7. Exchange contracts and agree on the final arrangements.

Not every property journey will be the same, but the above steps will provide you with an idea of what you can expect. Additionally, if you’re moving to Wales from England, Scotland or elsewhere, you may also want to look into taking Welsh language classes to make your move even smoother.

Whether you’re selling or buying, our property professionals are only one call away to help you get moving and answer your questions. Contact your local branch today and find out how we can help.

What other costs are associated with buying a property?

Now that we’ve covered the steps to buying your home, let’s talk about some of the costs that are associated with buying a property. In this way, you can avoid any unwanted surprises along the way.

Land Transaction Tax (LTT)

Land Transaction Tax (LTT), often referred to as Stamp Duty, is a form of tax that you pay when you buy land or property above a certain value. It is an additional cost that is calculated based on the purchase price.

Note that the LTT in Wales, varies to the Stamp Duty in England and the Land and Buildings Transaction Tax in Scotland. Read more about Welsh Stamp Duty and the different tax bands here.

Searches 

Above, we already touched on the fact that your property lawyer/conveyancer will perform property searches on your behalf to help ensure that you, as a buyer, have all the information you need to feel secure in your property purchase. Depending on the council, the property and its environment, costs will vary, which is why it’s important to talk to a specialist to get a more accurate estimate.

Surveys

Some mortgage lenders offer free surveys, but you may want to consider other options that help to ensure you know as much as possible about the state of the property you're buying. All surveys should be completed by an accredited surveyor from the Royal Institute of Chartered Surveyors.

There are four different types of survey:  

• Level One Countrywide HomeFact® Report
• RICS Home Survey Level 2, previously known as the HomeBuyer Report
• RICS Home Survey Level 2 (survey and valuation)
• RICS Home Survey Level 3

To get a better understanding of each survey or get an instant quote, visit our in-depth explanation or surveys here.

Mortgage fees

There are usually two main types of mortgage-related fees - Broker fees and Lender fees.

Our Countrywide Mortgage Consultant will discuss any relevant fees with you before you choose to proceed. When arranging a mortgage through Countrywide, the following fees apply:

• Broker fee: a one-off fee payable to Countrywide Mortgage Services, for lifetime membership to our mortgage services, which comes with a number of benefits
• Administration fee: payable to Countrywide Mortgage Services, for handling all the administration on your mortgage application

Although some lenders do offer fee-free mortgages, others may come with associated costs The total fees payable will depend on your chosen lender, but may include:

• Arrangement fee: paid to the lender for arranging your mortgage. Can be added to the loan in some cases.
• Booking or reservation fee: often charged upfront, it reserves the mortgage you have been offered while your application is being processed.

Moving costs

Last, but certainly not least, you can’t forget about any moving costs you may need to take into account, including hiring a company to help you move or the time it may take to do it all yourself. There are professionals who will be able to safely and securely pack and move your belongings. Depending on who you use, this could come with the added benefit of being insured for any potential damage that could occur during your move.