Complete 2023 Guide.

First Time Buyers
Buying A Home Guide.

Birmingham Investment Property

The home buying process can be both confusing and stressful.

But why does it have to be?

Here are 30 easy-to-follow steps for how to buy a house in the UK in 2023 – from mortgage deposits to paying stamp duty.

So, if you’re a first time buyer wondering how the process of buying a house works in the UK, keep reading to learn more:

Contents

  1. Understand your timeframe
  2. Find out how much you can borrow
  3. Save for a mortgage deposit
  4. Research your area
  5. Apply for a mortgage agreement in principle
  6. Start your property search
  7. Register with local estate agents
  8. View property in person
  9. Make the right offer
  10. Get your offer accepted
  11. Watch out for gazumping and gazanging
  12. Apply for a mortgage
  13. Find a solicitor or conveyancer
  14. Your lender will check the property is worth it
  15. Your solicitor carries out searches
  16. Get a property survey
  17. Get a mortgage offer
  18. Organise buildings insurance
  19. Negotiate a completion date
  20. Hand over your deposit to your solicitor
  21. Exchange contracts
  22. Get a completion statement
  23. Your solicitor carries out more searches
  24. Sign the transfer deed
  25. Get your mortgage money
  26. Pay for the house
  27. Grab your keys
  28. Pay stamp duty
  29. Register ownership with Land Registry
  30. Get the title deeds
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1. Understand Your Timeframe 

Buying a house can be a long-winded process, and you might be wondering:

How long does house hunting take?

Well, you could spend anywhere from six weeks to eight months to find your dream property and put in an offer.

After that, you could spend four to 12 weeks getting your offer accepted, sorting out a survey, and exchanging contracts before being able to move in.

Simply put, this isn’t something you’ll want to rush and you’ll need to accept that you will be putting time aside to complete the following 29 steps:

2. Find Out How Much You Can Borrow 

If you don’t have access to the bank of mum and dad, you may need to secure a loan from a mortgage lender to afford a new home.

But how much can you borrow?

The amount of cash mortgage lenders will be willing to loan can depend on several factors, including:

  • The size of your deposit
  • Your annual income
  • Your credit score
  • The income of your partner buying the property (if applicable).

Be sure to use a mortgage calculator to get a ballpark figure of how much you can borrow, which will help you find the right property that falls under your budget.

Remember:

You should also budget for the additional costs of buying a house, which can include monthly mortgage payments, conveyancing fees, and insurance.

3. Save for a Mortgage Deposit 

Likely the most difficult part of the home buying process is saving up enough money to afford a mortgage deposit.

These are typically at least 5% of the total price of a property.

For example:

A £200,000 home could set you back £10,000 if you get a 95% mortgage.

However, it’s usually a good idea to save more than this, as bigger deposits can usually lead to mortgages with lower interest rates.

But what if you don’t want to wait longer to save up money? How can you buy a home quickly?

There are a few ways you can speed up the process:

  1. A Help to Buy Equity Loan – The government will loan you between 15% to 40% to buy a new build home. You’ll need to save for a 5% deposit.
  2. Shared Ownership – Instead of fronting all the cash yourself, you can buy a share of the property (25% to 75%) and pay rent to cover the rest.
  3. Bank of Mum and Dad – While your family may not be able to provide the cash needed for a mortgage loan, some mortgage lenders will take into consideration their income to help you borrow.
  4. Lifetime ISA – Although a lifetime ISA is still a form of saving that will take time, it can still speed up the house buying process. You can save up to £4k a year in a lifetime ISA and the government will top up your balance by 25%. So, if you save £4k, the government will give you an extra £1,000.

If you’re buying property to rent to a tenant, you’ll need a buy to let mortgage – click the link to read our guide.

4. Research Your Area

You may already have a strong idea on the area you want to buy your home in.

Maybe you have a new job and need to relocate, or maybe you want to move closer to a school for a new addition to the family.

Whatever your motives, researching your area in-depth can be vital to minimise expenses and future hassle.

Here’s how:

  1. School Catchment Areas – If you’re buying close to a good school, you may face a premium on house prices.
  2. Transport Links – Living near transport links can be highly beneficial, but it can also boost a property’s value. Nearby motorways can also lead to noise and air pollution.
  3. Regeneration Plans – Regeneration can improve the quality of life in an area, but it could also result in an increase in traffic.
  4. Crime Rates – To make sure you’re as safe possible, you can check local crime statistics on the police.uk website.
  5. Flood Zones – Be sure you aren’t accidentally buying a home in a high risk flood area, as this can not only cause hassle for yourself, but it could lead to home insurance problems.

Be sure to consider all this criteria before deciding on getting a house.

5. Apply for a Mortgage Agreement in Principle

If you want to extend your buying power and become more attractive to sellers, getting a mortgage agreement in principle (AIP) is the best way to go.

Simply put:

A mortgage agreement in principle is a statement that shows a mortgage lender is willing to lend you a certain amount.

This can be otherwise referred to as a decision in principle, mortgage promise, or mortgage in principle.

A survey from Which? found that 53% of homeowners had got an agreement in principle before applying for their mortgage.

This number was even higher for first-time buyers, with 62% taking out an AIP.

Which? also found that eight out of 10 mortgage holders said they thought having an AIP helped them during the home buying process.

6. Start Your Property Search

Now, the exciting part begins:

It’s time to find your dream home and begin your property search!

By using property portals like Realoo, you can narrow down your search by deciding on a purchase price, location, number of bedrooms, and amenities like number of bathrooms.

Through Realoo, you’ll also be put in contact with local estate agents and property investment companies to make the home buying process easier.

Don’t worry if you don’t find your “wow” property immediately, these things can take time and there are new properties constantly going on sale.

7. Register With Local Estate Agents

While not an essential step, registering with an estate agent can be a good idea while conducting your property search.

By registering with local estate agents, you can increase your chances of finding a home as agents are known to contact potential buyers before officially listing the property.

The best part?

It’s free to register with no obligations!

8. View Property in Person

While exploring properties using Realoo is the best way to scout properties, nothing beats seeing your potential new home in person.

Most buyers get a gut feeling when seeing their new home for the first time, and this is hard to get when looking at images on a screen.

As such, once you think you’ve found your ideal property on Realoo, be sure to contact the estate agent directly and book a viewing to see the property in person.

Also, keep an eye out for a few details when viewing properties in person.

They include:

  • Looking for damp.
  • Assessing storage space.
  • Thinking about room sizes.
  • The age of the roof and if it needs replacing.

Remember there are no dumb questions when on a viewing and you need to make sure there is no stone left unturned.

9.  Make the Right Offer

Found your dream property?

Now it’s time to make an offer.

But how much should you pay?

Firstly:

You can pay the asking price, however this could cost you thousands over the odds.

Another way is to offer below the asking price, which can net you big savings, but can be risky if other people are interested.

But perhaps the best way to make the right offer is to research.

By looking at recent sold house price data in the area, on Realoo or the Land Registry, you can identify how much similar properties are worth and use this as your benchmark.

After deciding on a price, you can contact your estate agent who will let the seller know.

The best advice we can give, though, is this:

Don’t spend more than you can afford. While you can get excited trying to get your dream house, you shouldn’t spread yourself too thin – there are other costs you need to be wary of.

10.  Get Your Offer Accepted

Congratulations, you’ve reached the first major milestone in the home buying process.

With your offer accepted, the real journey now begins.

11. Watch Out for Gazumping and Gazanging

While getting an offer is a time to celebrate, there is no legal obligations yet in place until you exchange contracts.

As such, the door is left open to being beat to the finish line – otherwise known as being gazumped or gazanged.

  • Gazumped means another buyer offers more money than you and your seller changes the deal.
  • Gazanged is when a seller cancels the sale and decides to stay in their home.

So, how can you avoid this?

Well, sadly, there’s very little you can do to prevent these things from happening.

While you can avoid being gazumped by asking the seller to take your property off the market once a deal has been agreed, there is no guarantee that this will work.

That’s why you’ll need to be decisive and act fast to get the deal over the line.

12.  Apply for a Mortgage

It’s mortgage time. But where should you start?

Well, if you’ve already had a mortgage agreement in principle, this step can go far quicker.

However:

Agreements only last between 30 or 90 days, which could mean the agreement is now expired.

This can be a blessing in disguise, though, as mortgage deals change daily, and you shouldn’t go back to your first mortgage lender without looking at the market first.

Using comparison sites, you could find a better mortgage deal with lower interest rates.

Another thing to consider is the type of mortgage you want to get.

These can include:

  • Fixed-rate mortgages
  • Tracker mortgages

You should also keep in mind how long you want your mortgage term to be, although 25 years is the most common.

If this sounds like a hassle, you can go down a different route and use the services of a mortgage broker to get advice and find suitable mortgages for your needs.

13.  Find a Solicitor or Conveyancer

Conveyancing is the legal process that transfers property ownership from one person to another.

You’ll need one in England and Wales to carry out searches, check contracts, and handle the exchange of money.

Unfortunately, this comes at an extra cost, with conveyancers and property solicitors costing up to £1,500.

So: How should you find a solicitor to buy a house?

There are a few steps you can follow:

  1. You can ask for recommendations from friends and family.
  2. You can ask your mortgage lender.
  3. If you buy through an investment company, they can recommend you a property solicitor. Estate agents can also make a recommendation.
  4. You can search online.

Just make sure you use a solicitor who has experience in property law.

14. Your Lender Will Check the Property is Worth It

Following on from your mortgage application and your agreement in principle, your lender will do some checks to make sure they’re willing to lend.

To do this, they will not only check the information you’ve provided, such as payslips, but they’ll also check the property itself.

This is for one simple reason:

The property is the lender’s security if things go wrong.

As such, they need to see how much the property is worth in case of repossession (don’t panic, breathe).

One thing to keep in mind is that mortgage valuation is based on the properties value – not what you’re paying for it.

Once the mortgage valuation is clear, your loan-to-value ratio for the mortgage will be assessed.

15. Your Solicitor Carries Out Searches

Alongside your mortgage application, your solicitor will start making searches for you.

These can include:

  • Local Authority Searches – This includes checking for any building control issues or nearby road projects. It can cost anywhere from £50 to £250.
  • Drainage Searches – Hint in the name, these checks will see if your property is connected to sewers and can cost around £50.
  • Environment Search – These checks will identify if the land is contaminated. This will set you back another £40.

While some searches are optional, your mortgage lender may require them to be conducted.

16.  Get a Property Survey

Before you exchange contracts, it’s vital you get a house survey.

While the property will already have been assessed during your mortgage valuation, this is only a basic valuation and gives you no protection.

By seeking a professional opinion and getting an expert to survey your potential new home, you can identify any expensive issues and renegotiate prices.

Which? found in 2019 that 76% of homeowners got a survey beforehand.

Moreover, a report form New Homes Review found that 91% of buyers found defects in their new build properties.

Types of surveys you can get include:

  • Homebuyer’s report – Will cost around £500 to £1,000 and is ideal for homes younger than 50 years old.
  • Snagging Survey – The most common survey for buyers of new build homes, snagging surveys find defects in new builds. By doing a snagging survey – which can cost between £400 to £900 – developers will usually fix any issues free of charge before you sign on the dotted line.
  • Full Structural Survey – Ideal for those buying older properties, these detailed surveys can set you back up to £1,500.

17.  Get a Mortgage Offer

Your next major milestone has been completed when you get your formal mortgage offer.

This is definitely a time worthy of celebration, but just be sure to check all your personal details are correct to save you potential headaches later down the line.

18. Organise Buildings Insurance

Most mortgage lenders will only lend to you once you have buildings insurance in place, so it’s a good idea to get this out of the way before you exchange contracts.

A good starting point is to check your mortgage valuation and make sure the insurance covers the value of your property so you have enough coverage.

19. Negotiate a Completion Date

Following on from your solicitor searches, you’ll need to agree a completion date with the seller and decide when you’re getting the keys.

20. Hand Over Your Deposit to Your Solicitor

You’re just one step away from the exchange of contracts and making your home ownership official.

But first things first, you need to pay your deposit.

This can be a bit more complicated than it may first appear, with most banks not allowing you to move more than £25,000 out of a bank account per day.

To get around this, you should call your bank and arrange a Clearing House Automated Payment System (CHAPS) payment.

21. Exchange Contracts

And… breathe.

You’ve done it.

Once you exchange contracts, you will be legally bound to buy your home.

Now all that follows is some simple paperwork, but all the hard work is done – you’ve got a new home.

However, you might be wondering:

How do I pull out of a house purchase?

Well, you’ll need to contact your solicitor to tell them, but if you’ve exchanged contracts, you’ll be forfeiting your deposit.

22. Get a Completion Statement

Your solicitor will provide a completion statement following on from your contract exchange.

This is simply a breakdown of all the money you need to pay your solicitor, and can include solicitor fees or outstanding deposits.

23. More Searches Are Needed

More searches?!

Unfortunately, yes.

But not to worry, your solicitor will be checking to see if the seller is still in ownership of the property and that you (hopefully) haven’t been made bankrupt since your mortgage offer.

24. Sign the Transfer Deed

To show that you’re willing to take ownership of the property, you may need to sign a transfer deed.

This will be prepared by your solicitor, and you’ll need to sign it with a witness.

25. Get Your Mortgage Money

It’s time to get your cash to the seller.

Your solicitor will handle this and will request the money from your mortgage provider.

26. Pay for the House

After getting the mortgage funds, your solicitor will send the full amount to the seller’s solicitor.

At the same time, they’ll also get the seller’s title deeds and proof that their mortgage has been cleared.

27. Grab Your Keys

It’s done, the keys are yours.

It’s time to move in!

There are now only three minor steps before the entire process has been completed.

28. Pay Stamp Duty

In England and Wales, all property purchases are subject to stamp duty.

This is a tax paid on the purchase price of a property, and you have 14 days for your solicitor to send the transfer deed and your fee to the Stamp Office.

The current stamp duty rates are:

There’s a similar system in Scotland and Wales, but the tax goes by a different name and has different rates.

You may not have to spend stamp duty as a first time buyer, with relief meaning you won’t pay stamp duty on property worth below £300,000.

29. Register Ownership With Land Registry

Now that you own the property, you’ll need to register with the Land Registry.

This will cost between £250 to £500 (sigh, more money).

30. Get the Title Deeds

We’ve reached the finish line.

It’s been a long journey, but you’ve finally done it.

Your solicitor will get your title deeds from the Land Registry and give them to your lender.

All that’s left is to enjoy your new home and (sadly) start paying off your mortgage in monthly payments.

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FAQs

How Much Money Do You Need Saved to Buy a House?

The average price paid by a first time buyer in England and Wales is £234,134 as of January 2021. If you were to get a 95% mortgage, you would need to save a deposit of £11,706 at a minimum.

However 75% loan-to-value mortgages are becoming more common, meaning you could need a deposit of £58,533.

Other costs can include valuation fees, surveys, conveyancing fees, removal costs, insurance, and mortgage feels.

All in all, you may need around £63,533 to cover all costs.

How Do You Buy a House if You Have No Money?

It is possible to get a 100% mortgage loan covering the entire cost of the property. But this is incredibly risky as they come with far higher interest rates, lending charges, and application fees.

There are only a few types of 100% mortgages, including guarantor mortgages and family mortgages.

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