Now that you’ve decided on action, it’s time to look at the legal, financial and planning aspects of your decision. It’s essential to get these right and avoid getting carried away with the excitement of your new future. This chapter will present much of the necessary detail, as precisely as possible.

Affording the move

This is where you could quite easily get carried away. It’s inspiring to look in the papers and see what you could get for your money in another part of the country. You know the area you’re intending to move to now, though, so you should check what you can get for the money you want to spend.

First of all, you need to get a valuation for your present house from two or three local estate agents. This won’t cost you anything. Check too whether there is a rising market in your area. If so, is it worth waiting a few months? Will it be necessary to have a mortgage on your next property? Remember, banks and building societies may not grant you a mortgage on business premises. You’ll have to get a business loan unless you can separate out your business and domestic premises and get a mortgage on your home only. At first you may not be earning much, if anything, so you don’t want to be paying out a large sum each month while you get the business started. Then there are the costs of the move, including:

• removal costs
• stamp duty
• estate agent’s commission
• solicitor’s fee
• Land Registry fee (for the search)
• survey costs
• service installation/reconnection costs
• mail redirection costs.

Get estimates for these if you’re not sure of them. Any estate agent can tell you his percentage commission. This will depend on whether he is the sole agent or not. It’s possible to find out the cost of straightforward conveyancing from a solicitor. Phone up a couple of removal firms and give them an idea of distance and amount of furniture – you’re only asking for an approximate figure. Survey costs are pretty standard: the estate agent will recommend a surveyor you can contact.

Property survey types

There are three types of survey, depending on specific cases.

• Valuation for mortgage purposes – the cheapest. By law all building societies are required to carry out a valuation on a property before making a mortgage offer. Although this doesn’t apply to banks, most will insist on a valuation being carried out anyway. It’s done with the sole purpose of determining the value of the property so that the lender can assess how much it may lend. It’s not really a true survey.
• Homebuyer’s survey and valuation. This is a ‘proper’ survey which should highlight defects or problems with the property. These can be a bargaining tool for negotiation over the price.
• Building survey – the most expensive. This provides a detailed report on the construction and condition of the property. It is a good idea for older or unusual properties.

Remember that in Scotland the system of house purchase is different (see later in this chapter) and you may need to have several surveys carried out on different houses, all adding to the expense.

Now you’ll have a good idea of how much you can spend on your new property. Start looking seriously.

Looking for the ideal property

You should have an idea now of exactly how much you have available to spend on the property, including the amount you intend to borrow. It will be even better if you can find something below that limit. Suggested sources for your search are as follows:

• estate agents – some also have lists of available property updated and issued on a regular basis. Put yourself on their mailing list. Phone them weekly;
• solicitors (Scotland) – many of these have their own estate agency business. In some areas several solicitors have joined together to form groups for house purchase in a ‘Solicitors’ Register’, usually with a ‘Property Shop’ and a weekly newspaper of available property;
• local papers – ask a newsagent when the property sections are published in local papers. You can get the appropriate editions sent to you;
• national papers – many of these have special property supplements on certain days;
• magazines – this tends to be the top end of the market and by the very nature of the magazine (weekly or even monthly) may be out of date by the time you see the advertisement;
• the web – an increasingly popular method. Here you can see photographs of the houses, take 360-degree virtual tours of the interior of some properties and print off details. Check the sites of the major estate agents.

Planning building work

You may need to carry out building work on the property you choose. Plan carefully – you will need to get an idea of the costs involved before you put in an offer. Here a thorough survey is essential. Builders may be reluctant to give estimates for the conversion of old buildings as once work starts all sorts of hidden problems can emerge. If you insist on pinning them down, they will tend to inflate the estimate to include a contingency for the ‘unknowns’.

If you intend to carry out building work, you will have to obtain planning permission first. This will usually mean that you’ll have to get plans drawn up to submit to the local planning department. In Scotland this will also mean you’ll need building warrants for the work. All this can take considerable time and work can’t start without planning consent and the warrants. You need to cost in the fees of the surveyor or architect who draws up the plans, the charge made for planning consent and for the building warrants. Check with the local planning officer first to find out whether your plans are likely to be favourably received, i.e. whether they fit in with long-term plans for the district.

If you mean to renovate the property, the surveyor or architect is the best source of information. He can advise you about planning permission, listed building regulations, safety and structural issues and possible conservation restrictions.

Getting the balance right

In choosing your future property which is to be both your home and your place of work you’ll have to balance the two aspects. There are attractive old farm houses on the market with outbuildings or barns ‘ripe for development’. There are also properties with annexes or separate buildings already set up as a work space or office. These may well be more expensive than the house with undeveloped barn alongside. Think carefully before you make your choice. The property with the office already in place will probably be more expensive to buy, but consider the cost of conversion of that beautiful old barn. It looks very attractive and will give you lots of space to expand your working environment, but it will cost a great deal to bring up to standard. The roof may need to be replaced, the walls damp proofed and the inside gutted and completely restructured.

You need an idea of costs involved before you make your choice, but remember that building costs have a way of growing as the work progresses. The financial reality of this sort of work can be worrying.

Managing the project

If you engage an architect, he will offer to project manage the whole building programme. If you are carrying out major building works, this is no light task. You may feel that you want to do this yourself to save money. Fine, as long as you realize what it entails.

You need to be able to visit the site regularly to keep an eye on progress. You need to be able to cope with the different tradesmen and keep them up to the mark (if necessary) and on schedule. Builders, plumbers, electricians and decorators all have to be scheduled in smoothly and efficiently. You don’t want to hear that the builders have finished their work unexpectedly early and the electrician, who should be next on the scene, has started a job somewhere else while waiting to hear from you.

Keeping control of your own project can be exciting – as long as you are confident you can do it successfully without getting over stressed. And as long as you haven’t got a full-time job as well.

Contingency fund

A contingency fund should be an absolute priority for you. Whatever you decide to do, whether it is buying that house with office space set up or choosing to buy to convert or extend, at some point you will need additional funds for those unexpected works. There will always be problems you haven’t thought of, situations you haven’t considered and crises you could not have forecast. Set aside something for this at the beginning and ring-fence it.

Having planned for ordinary stud walls, we discovered when subdividing the building into cottages that we needed specially constructed, and more expensive, block firewalls extending into the roof space. Creating the vertical firewall between two of the new cottage units meant that we had to transfer access to one downstairs room by blocking off the existing door. The builders then had to hack through a 27-inch-thick stone wall to create a door for this bedroom, accessing into the adjacent cottage. An expensive option, but rules are rules!

Change of use

You’ll have to apply for ‘change of use’ if you’re going to be starting up a business in a building where there wasn’t a business there before, e.g. converting a house to a guest house or hotel or setting up a shop or gallery in an old farm building or outhouse. It works the other way as well – changing a hotel into a private house. Again the local planning office is the place to enquire.

There are also the complications that arise in meeting disability regulations. It may be impossible to fulfil all the conditions applicable if you are converting from an older building. Some leeway is allowed for this, but check what you need to do – your architect or surveyor will know. New builds require a range of additional features.

Using your house for a bed and breakfast where you have rooms for only six guests or fewer needs no planning application.

Buying the property

This is not supposed to be an informative guide to buying a property, but there are a few points to note. Buying and selling property in England, Wales and Scotland is very different.

England and Wales

In England and Wales, once you have found your property, the steps in the progress of a purchase are the following:

• 1.Get a mortgage agreed in principle.
• 2.Make your offer through the estate agent. There are no legal obligations at this stage.
• 3.Once the offer is accepted, instruct your solicitor to proceed, making sure that exchange and completion dates are agreed. Also instruct the mortgage lender and make arrangements for a survey.
• 4.The draft contract is drawn up by the seller’s solicitor and sent to yours, who will make enquiries and a Land Registry search. He should also submit a search to the local authority to check any planning consents and local issues.
• 5.The mortgage company will then carry out a survey.
• 6.Once all searches are OK, the draft contract is approved by your solicitor.
• 7.You sign the formal mortgage offer.
• 8.You are ready to exchange contracts. A deposit of around 10% has to be paid by you and the completion date set.

Up until the very last moment when contracts are exchanged, the purchase is not legally binding. The seller, or indeed you, can withdraw without penalty.

Scotland

The process is very different in Scotland. The transaction will be legally binding very much sooner. Traditionally, houses were marketed by solicitors, though now there are numerous estate agencies in the country, many run by solicitors as a separate business. The steps to house purchasing are the following:

• 1.Get the mortgage agreed in principle.
• 2.Once you have found a house, engage a Scottish (local) solicitor and instruct him to put in a Note of Interest to the selling agent. This means you will be kept informed of any developments and given the opportunity to submit a formal legal offer.
• 3.Because once an offer has been made and accepted it becomes legally binding, complete the mortgage application and get a valuation and survey carried out.
• 4.Ask your solicitor to submit a formal offer on your behalf. If there is a lot of interest in the house, a closing date and time will have been set and you will be expected to submit the offer by then. If no date has been set, your solicitor will submit the offer as soon as possible. Your mortgage must be in place. The offer will cover such matters as alterations and extensions carried out so that all consents and completion certificates can be asked for and checked. Any queries that your solicitor might have must be cleared up in the missives (letters to and fro) that may follow. If your purchase is a simple one, this can be cut to a minimum.
• 5.If the seller has several offers, he can choose whichever he wishes. The seller is not bound to accept the highest bid; he can do as he likes. This is the ‘sealed bid’ system which is used north of the border. It can be a very expensive way to buy a house for two main reasons.
  • You have to get a survey done before making your bid. If you’re unsuccessful, you will have to go through the whole process again with the next house, and the next. In order to get over this problem, a pilot scheme is being trialled where the seller has to provide the survey, making it available to all potential buyers.
  • You may be making a bid well above that of the next interested party. There is no way of telling. The estate agent might give you an approximate idea, but it is only approximate. He, after all, is acting for the vendor.
• 6.Entry is on the date specified in the offer.

The offer system in Scotland

A word of warning here. In some places, notably Edinburgh, it is accepted that in order to have any chance of buying the property, you must offer several thousand pounds over the asking price. If you don’t know the system, you don’t know what to bid. Of course, the very fact of a closing date means that the seller is confident of getting a lot of interest.

The plus side of all this is that once your offer is accepted, you can be confident that the property will be yours. A chain has no significance in Scotland as you are legally bound anyway and have to come up with the price on the set day. Nor is a deposit necessary for the same reason.

The really stressful situation arises where you are selling a house in England and buying in Scotland. You have an offer in for your English property and you’ve made a successful bid on your Scottish property, which means you have a legally binding date by which you have to come up with money. Your English sale could still fall through, leaving you with a real problem.

There are certain properties in Scotland that are sold at a fixed price and here you have the best of both worlds. You know the price, there is no ‘sealed bid’ system and you have a legally fixed entry date as soon as your offer is accepted. This is the case with new houses or sometimes with major conversions. It is possible, though, to find a property where the vendor wants to sell quickly. He or she may not want to go through the extended ‘sealed bid’ system and is happy to have the whole matter settled as soon as possible.

Grants

If you are intending to renovate your property or to build an extension or even a new building, the costs could be high. There may also be the cost of new equipment or furnishings. However, you may qualify for a grant. You’ll have to decide whether your business start-up is likely to be eligible for one and whether such a grant is worth the effort of applying for.

In order to qualify for a grant there are four main problems to overcome:

• You must be ready to put up some of your own money. Grants usually cover only 15-50% of the total money necessary to set up the business.
• Grants are available only for certain businesses.
• You will have to draw up a business plan. You may have one already if you have applied for a business loan from your bank.
• There are always restrictions set by the grant scheme. Are you willing to abide by these? They usually mean that the business must be a start-up and not one which is already in progress, the business must be of the kind supported by the grant provider (i.e. seen as achieving the objectives of the agency or department) and you may well have to pay for membership of certain organizations or schemes supported by or of interest to the provider.

Grants are sometimes dependent on the location in which you will be living and working. In rural areas, certain types of business, such as the tourism industry, crafts, agriculture or anything to do with environmental issues, are often targeted for special funding. Businesses which boost employment are of particular interest to grant providers in areas of high unemployment. On the other hand, starting a business in a relatively wealthy part of the country is unlikely to qualify for a grant.

Possible contacts for grant schemes are:

• your local Business Link or other business support agency;
• sources of free information such as your bank, your trade organization or regional development agency;
• local enterprise councils.

Completing the forms

Once you have decided on the grant you’re interested in you will have to submit a proposal. This usually means drawing up a detailed project description with an explanation of the potential benefits the business will offer. These must fit in with the aims of the grant scheme. You will also need a detailed work plan with full costings and will have to show how your background and expertise will make the business a success.

Once your application is accepted you will have to keep records of where the money is being used. Grants are usually handed over according to an agreed schedule, perhaps in instalments at fixed periods or in arrears with proof of actual expenditure. There may be a final audit before you’re given the last payment.

Moving on

You’ve sold your old house now and made any financial decisions with regard to grants, loans or mortgages. You have moved to your new home and are about to start on the real adventure of living and working in the new environment. This is to be both your home and your office, at least part of the time. How do you go about setting it up? What do you need in the way of layout, space, communications, equipment and furnishings for that office? What is going to be your first priority when you’ve moved in? How will you get on with your new neighbours in this very different life where you are ‘around the neighbourhood’ for most of the day perhaps?

It’s time to think specifics.