Financing a new Neat Living home
When it comes to organising your new home, the question of how to finance it will be one of the first things you will be thinking about.
The Neat Living Flex homes are designed to be a future proof choice but did you know that you don’t pay for unnecessary design costs. All of the architectural, structural, mechanical, electrical and plumbing design for the Flex range of homes is complete – so you don’t have the expense or the hassle of doing this yourself.
Obtain Professional Financial Advice.
Neat living does not offer financial advice, therefore, you should seek your own financial advice from a qualified professional or suitable organisation.
What is a Self Build Mortgage?
A self build mortgage allows custom builders to borrow money in clearly defined stages, rather than a lump sum. We would recommend thoroughly investigating in detail how the lenders define these lump sum stages and their criteria for the staged or milestone drawdowns.
These stages should coincide to allow you to purchase land and organise subsequent work such as ground works and laying foundations in preparation for the new Neat Living home. The lender will typically insist that work is independently assessed and valued as the work proceeds and we can work with an independent assessor if required.
Certain lenders will lend ahead of key milestones, to allow for payments to be made in advance of the works starting on site or offsite.
Stamp Duty Land Tax and Land Buildings Transaction Tax Explained!
Depending on where you want to build your home, different rules apply in relation to “purchase taxes.”
Since 1 April 2015 Land and Buildings Transaction Tax (LBTT) replaced UK Stamp Duty Land Tax (SDLT) in Scotland. Under LBTT, properties worth up to £145,000 will not pay any tax. Since 30 June 2018, first-time buyers are exempt from paying tax on property purchases up to £175,000.
Another benefit of self or custom builds is that typically the sum of the land purchase transaction, which does not already include a property, falls below the threshold of SDLT or LBTT.
For sales between £145,001 and £250,000, a tax rate of 2% is applicable and for sales between £250,001 and £325,000 the rate a rate is 5%. Between £325,001 and £750,000, the rate will be 10%, with a top rate of 12% applying to all transactions above £750,000.
Since April 2016, a 3% surcharge above the current LBTT residential rates is applicable to anyone purchasing an additional property (that is not their only or main residence) for £40,000 or more. First-time buyers also benefit from relief on the portion of property purchases below the £175,000 threshold.
England, Wales and Northern Ireland:
Stamp Duty Land Tax (SDLT) applies in In England, Wales and Northern Ireland when you buy a freehold property, buy a new or an existing leasehold, or buy a property through a shared ownership scheme or are transferred land or property in exchange for payment, e.g. you take on a mortgage or buy a share in a house.
Knowing the details about self-build mortgage?
You should make early enquiries about the different lender’s requirements. These include finding out about how much deposit you will need to put down; this could range from 25% to 50% as well as understanding their terms and conditions.
Don’t be afraid to shop around as different lenders can offer some surprising deals. Once again, we would recommend discussing these aspects with your selected financial advisor.