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Buying a house in Wales in 2023. What do you need to know?

buying a house in Wales Extend Finance

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If you are planning to buy a property in the UK, you probably already know that it is not an easy process. High purchase price, a number of formal requirements and complicated, legal language are certainly inconvenient, but probably the biggest obstacle is unfamiliarity with the specifics of the area. After all, you need to know that across the UK, property-related legislation is not uniform. That is why, in today’s article, we will explore the process of buying a house in Wales.

buying a house in Wales Extend Finance

Is buying a house in Wales similar to buying a house in England?

As a general rule, buying a house in Wales follows the same rules as in England. Unfortunately, there are a few minor differences that you need to bear in mind if you plan to live here. Among the most important are:

  • A different form of purchase tax;
  • Other rules for assistance programmes;
  • Other property rental rules;
  • Other property prices and their characteristics.

Land transaction tax

It is worth remembering, Stamp duty land tax (SDLT) does not apply in Wales. It was replaced in April 2018 by Land transaction tax (LTT). From a buyer’s perspective, the most significant changes relate to the rates that must be paid at the time of purchase. In the table below, you will find a comparison of the SDLT and LTT rates

AmountLand transaction taxStamp duty land tax
0-£225,0000%0%
£225,001-£250,0006%0%
£250,001-£400,0006%5%
£400,001-£750,0007,5%5%
£750,001-£925,00010%5%
£925,001-£1,500,00010%10%
Powyżej £1,500,00012%12%
Rate sources: Land transaction tax and Stamp duty land tax

As with Stamp duty land tax, the tax is charged on ‘parts’ of the total amount. If you buy a house worth £400,000, you will only pay 6% on £175,000 as the first £225,000 is exempt.

Right to buy and other help schemes in Wales

When deciding on buying a house in Wales, it’s worth bearing in mind the assistance schemes that can significantly reduce the final transaction price. It may be disappointing to note that from 2019, the Right to Buy scheme is no longer available in Wales.

In return, as long as you are eligible, you can benefit from other schemes, for example Shared ownership, Help to buy and Homebuy. The best source of the latest information is the Welsh Government website.

Buying a rental property in Wales

If you are planning to invest in a Welsh rental property, you need to be prepared for the range of paperwork involved. Regulations include:

  • Obligation to register the property owner for official entry. The body responsible for this is Rent Smart Wales.
  • The need to obtain a rental property licence.

As is the case in England, rental properties are financed with a buy-to-let mortgage.

Are mortgage rates different in Wales than in England?

When you decide on buying a house in Wales, England or Scotland, you will most likely benefit from a mortgage. As you can easily guess, its interest rate has a high impact on your instalments and therefore the total cost of your overall investment.

There are interest rates throughout the UK, which are set by the Bank of England. As at the date of writing this article, 19.06.2023, the reference interest rate is 4.5%. You can check its current values on its official website.

The mortgage interest rate also depends on the bank’s margin. Although we cannot conclusively state that the margins of Welsh banks are identical to those offered by English banks, from our observations, these values are similar and the total cost of the mortgage depends primarily on your financial situation and creditworthiness.

How much does a house cost in Wales?

Let’s now move on to one of the most important issues of this article, which is money. Buying a house in Wales is much easier than in England, due to lower property prices. According to statistics, the average price of a property in Wales is £234,000 ( compared to £362,000 for England and Wales), while the median was set at £192,000 ( £276,000 for England and Wales).

You can see at a glance that by choosing to buy a property in Wales, in some cases you could save tens of thousands of pounds. On the other hand, this means less value when you sell your home.

What area of Wales has the cheapest properties?

However, the average price for the whole country does not give the full picture. We will find out a lot more when we find out the local figures. The table below shows average prices by county:

CountyAverage price
South Glamorgan£303,000
Powys£280,000
Gwynedd£244,000
Dyfed£243,000
Clwyd£228,000
Gwent£226,000
West Glamorgan£200,000
Mid Glamorgan£184,000
Buying a house in Wales – property prices by county

How long will buying a house in Wales take?

Our clients often ask how quickly they can move into their new home. Due to similar procedures and regulations, the whole process of buying a property in Wales will be no different to that which would be done in England. In practice, it is around three to five months, and in exceptional cases, up to eight weeks.

Summary

We hope you have found today’s article useful and that it has helped you to determine whether it is worth opting for buying a house in Wales. If you are still considering it, we would like to invite you to a free, no-obligation consultation with one of our advisers. During the consultation, you will learn all about your creditworthiness, possible solutions and get all your questions answered.

Interested? Contact us!

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Think carefully about securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.

Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. Conveyancing services and some forms of Buy to Let mortgages are not regulated by the Financial Conduct Authority.

Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts
secured on it.

Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. Conveyancing services are not regulated by the Financial Conduct Authority.

Extend Finance nor The Right Mortgage Limited can’t provide advice regarding Personal Pensions, Pension planning or investment planning advice. You must seek independent financial advice from a suitably qualified professional financial adviser who may charge you for advice.

Wills, Will writing, Trusts and Trust planning are not regulated by the Financial Conduct Authority.

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