Buying a house is complicated, often stressful, but extremely satisfying if you get it right. Knowing what to expect and how to go about it the right way is crucial. Here is what you need to know in 12 easy(ish) steps.
The more of your own money you can put into the purchase, the better your mortgage options will be:
You should be able to borrow more
You should be able to secure a better interest rate
For most people, this will be a long term project, so shop around for a savings account with good interest rates, and use it to build up your deposit by making regular contributions.
Viewing properties without a clear idea of your budget is a recipe for disappointment and wasted time. Remember that there are a whole range of costs to consider, over and above the cost of the property itself, including:
Land registry fees
The precise figure depends on the cost of the property itself to an extent, but it is certainly prudent to set aside somewhere between £2,000 and £5,000 to cover these one-off expenses.
If you have a property to sell, find out how much you might make from the sale, minus any outstanding mortgage balance. If the property is not yet on the market, get an idea of its value from a range of local estate agents.
In England, Wales and Northern Ireland, you will not have to pay stamp duty for a home that costs less than £125,000. You will need to pay the following rates for each threshold:
|Purchase price||Stamp duty rate|
|£0 - £125,000||0%|
|£125,001 - £250,000||2%|
|£250,001 - £925,000||5%|
|£925,001 - £1,500,000||10%|
If you are buying in Scotland, you pay Land and Buildings Transaction Tax instead. You can download a calculator from the Scotland.gov.uk website.
Before you even look at properties, it can be an idea to find a suitable mortgage deal and put in an application. The lender will then take you through an application process, to work out how much you can borrow.
You won't have to borrow the money immediately, but if your application is accepted, you will have the security of knowing the money is there as and when you need it.
In many cases, estate agents will refuse to take a property off the market, even if you have an offer accepted, until you have a mortgage agreement in place.
It is worth noting, however, that you may have to pay an arrangement fee up-front which you'll forfeit if you don't end up taking the mortgage out.
It is vital to get a feel for the local market, especially if you are moving to a new area. Speak to local residents and estate agents to find out things like:
Which are the desirable neighbourhoods?
What are you likely to get for your money, and what represents a bargain?
This will give you a good idea of where to look based on your needs and your budget. Once you have decided which areas suit your needs, you should:
Check the local papers and property websites regularly
Meet with a selection of estate agents to find out what is on the market now, and ask to be kept informed as new properties come on the market
At this stage, it is also a good idea to view a few properties in the area. Even if they are not right for you, seeing them up close will give you an even better idea of what you can expect to get for your money.
In an ideal world it is best to identify a shortlist of properties you are interested in, rather than going after one property at a time.
This will help you avoid being seduced by one property - setting your heart on a specific house just encourages you to overlook its problems.
By contrast, making a shortlist enables you to:
Compare and contrast each property's strengths and weaknesses, as seeing more than one helps you to understand more fully how each measures up.
Decide which features are most important to you, including the size of the garden or kitchen, number of rooms and type of property.
Save time by seeing more than one property on the same day.
Keep the estate agents guessing and interested. Having an open mind about seeing different types of properties gives estate agents hope and makes them more willing to put in the effort. Always remember however, that estate agents are looking after their clients, not you.
Before you commit to buying, at least two viewings are a must.
Before you arrange viewings, however, request Home Information Packs (HIPs), which will provide some basic information about each property before you see them. A seller must make a HIP available before the property can go on the market.
Viewing a property is your opportunity to get a feel for the place and look out for any potential problems. For instance:
Find out what fixtures and fittings the seller plans to leave behind. What is included in the sale price?
Look closely at the layout. Are the rooms big enough, or would any oddly shaped rooms present a problem?
Ask about insulation, as well as the state and age of things like central heating, plumbing and electrics.
Look for big cracks in the exterior walls, which could suggest a serious structural problem, damp patches and stains on interior walls and ceilings.
Check out any wooden window frames for rot and look for small holes in woodwork - this could indicate woodworm is a problem.
The first viewing should be about ruling out any properties that are not right.
When you find properties that you are interested in after a first viewing, arrange a second viewing. It is amazing how different a property can seem at second glance, when you've had a chance to reflect and are no longer blinded by the initial excitement.
Try to arrange the viewing at a different time of day
Take a friend or relative (a builder ideally) for a second opinion
If needed, arrange a third or even fourth viewing
If you are convinced that you have found the right property, it is time to start the negotiation process. The first step is to make an offer:
In most cases, you should offer less than the asking price. Any house purchase is likely to involve some negotiation, and most sellers will not expect to make the full asking price.
Consider how long the property has been for sale, its condition and any obvious repairs that will be required, and take these factors into account when deciding what to offer.
Ring the estate agent and make your offer. If necessary, detail any specific issues, such as repairs, that have determined the level of your offer.
In most cases (unless your offer is ridiculously low), the estate agent will call you back with a response from the seller.
If the offer is rejected, you need to decide whether you want to increase it, or simply leave it "on the table".
If the offer is accepted, immediately insist that the property is taken off the market.
It is vital that you use a qualified conveyancer to look after the legal side of your house purchase.
Some estate agents will offer to appoint one for you, but resist and appoint your own. Ask friends and family for recommendations as a good solicitor can be the difference between a smooth and a stressful purchase.
Your solicitor will review the HIP and any other information on the property (such as survey reports and local authority search results) and ensure that everything is in order, or deal with any issues that come up.
He or she will also get involved in contract negotiation, exchange of contracts and ensure completion of the sale by transferring the title deeds and funds.
It is important to remember that viewing a house yourself does not remove the need for a proper survey carried out by an expert - a Chartered Surveyor.
Again ask for recommendations before appointing a surveyor, and check that they are registered with the Royal Institution of Chartered Surveyors (RICS).
Decide on whether you need a full structural survey or a valuation report. It is always advisable to have a full structural survey carried out, as this will identify any underlying problems with the property via a detailed survey and report. It is likely that your lender will carry out a valuation survey as a condition of your mortgage anyway.
Once you have your survey report, read it carefully. Its findings can help to highilight unforeseen issues and costs.
If the report identified serious issues or a range of issues that would be expensive to put right, consider revising your offer for the property accordingly.
When you exchange contracts, your agreement to buy a property becomes legally binding.
Your solicitor will manage the drawing up of a "contract of sale" in negotiation with the seller's solicitor once any issues and enquiries have been dealt with.
You will agree a date for completion of the sale with the seller and will usually be required to hand over a pre-agreed deposit.
This is the day that the seller must finally vacate the property, your funds are transferred to the seller (your solicitor will handle this) and you get your hands on the keys and the title deeds for the property.
With this all done, you will officially be the new owner of the property (or the leasehold): congratulations!
If you're a first time buyer or looking to move house or remortgage, we can help you find the best mortgage deal to suit your needs.