Tips on Buying a House in the UK
Buying your first home is probably one of the biggest financial decisions you will make in your life.
Getting the money together for a deposit has become increasingly difficult for first-time buyers in the UK.
When you are finally ready to buy, the whole process of house-buying tends to often be a long, complicated and stressful process.
In Britain, buying a house can take a long time. Before getting started, it is important to understand the process.
How to Prepare Financially For Buying a House
Save for a Deposit. The more money you can get together for a deposit, the better.These days high deposits are required. Be prepared to scrimp and save for several years so that you can get the money together to buy. Even if you can get a mortgage, the interest will be lower if you have a big deposit.
Work Out How Much You Can Afford. Before you go house hunting, you should work out exactly what you can afford. You should make a budget an then stick to that budget. You may fall in love with a house which is just too expensive for you. Don't stretch yourself if you won't be able to keep up payments in the future.
Get a Mortgage. Unless you are very rich, you will need to borrow some money to buy a house. You need to find a mortgage at the best interest rate that you can.
How Can I Get a Good Credit Rating?
- Make sure you are on the electoral roll, even if you don't plan to vote.
- Don't go overdrawn unless you have an agreed overdraft facility.
- Make sure cheques or direct debits don't bounce.
- Don't miss any payments on your rent, if you are currently renting.
- If you don't have any credits, get one. Use it every month, but make sure you repay the balance in full every month.
How to Get a Mortgage
- Get advice from a whole of market mortgage adviser. Use a website like unbiased.co.uk to find a mortgage adviser.
- You should get an 'agreement in principle' from a mortgage lender before you start looking for your house.
- People who are selling houses will take you more seriously if you have the money in place to buy. You should get an 'agreement in principle' from your mortgage lender.
- You will need to have a credit check done to get an 'agreement in principle'. Affordability is a real issue. Mortgage lenders will want to be sure that you will be able to keep up the mortgage payments every month. If you can't keep up mortgage payments, you could end up losing the house.
How to Buy a House in England and Wales
Make Sure it's the House For You. Take pictures. Visit at different times of the day. Check out the local area. Talk to neighbours. Find out what is being built nearby.
Make an offer. It's okay to make an offer a bit lower than the asking price, but don't go too low. If you are too aggressive in your attempts to lower the price, you might put off the seller.
Have Your Offer Accepted. Get a survey to check that everything is okay with the house. Your solicitor will deal with all the legal side of things. The time from offer to exchange usually takes between two to six weeks. It can be pretty stressful. People can back out of the deal and house purchases can fall through.
Exchange Contracts. Once you have paid your deposit, you can't back out of the deal without possibly losing a lot of money.
Completion of the Sale. This can happen quite soon after the exchange of contracts or can take up to about four weeks more. This is where you pay the rest of the money. In return, you get the keys and the deeds. The house is now legally yours. Relax. You can breathe easily again. You have a new home.
What Else Do I Need to Pay For When Buying a House?
It's not just the house that you need to pay for when buying a property. There are other costs you need to consider:
- Conveyancing. Somebody needs to deal with the legal aspects of your move.
- Stamp Duty. If you buy a property of more than £125,000 you will have to pay a percentage of its price as a tax.
- Surveys. You need the condition of the house to be checked. Sometimes you can pay for a survey for a purchase which falls through. You might need to budget for more than one survey.
- Removal Costs. You need to have your things moved into your new home.
- Buildings Insurance. This is a requirement of mortgage lenders. You are probably also going to need contents insurance and you might consider mortgage protection insurance.
- House Repairs. Things may not be perfect from the moment you move in. You should put some cash aside for property maintenance.
Things to Consider When Buying a House in the UK
- Do I Need To Write a Will If I Am Buying a House? If you are not married and you are buying a house with a partner, you should get a will made when you buy a house. In England, if you die without a will and are single (not married or in a civil partnership) without children then whatever you leave goes to your parents. If your parents are not alive, it goes to your brothers and sisters. If you are part of an unmarried couple and you want your partner to get the house, make sure you write a will.
- Do I Need to Get a Full Survey Done When Buying a House? When you have an offer accepted on a house, you should think about getting a Homebuyer's Report instead of just a basic survey. Your mortgage lender will require a basic survey, but it is a good idea to go that little bit further. A Homebuyer's Report will give you more information about the condition of the property and any faults. Spending a little bit of extra money on a more complete survey is worthwhile. It could potentially save you thousands of pounds in the long run.
- How Do I Choose a Solicitor for Conveyancing? Most people hire a solicitor to deal with the legal side of buying a home. Conveyancing refers to all the legal and administrative work to with all the transfer of land from one owner to another. It's a good idea to select a solicitor based on recommendation. Maybe you have friends or family who have moved locally. Perhaps the estate agent can help. The whole home buying process can be slowed down by conveyancing. It is well worth selecting someone who has a good reputation for moving quickly.
What is Gazumping?
Gazumping is a British term regarding the sale of property. Gazumping happens when a seller of a house orally accepts an offer of the asking price from one buyer, but then accepts a higher offer from someone else.
Get to Know the People Whose House You Are Buying
House sales can fall through. The best way to reduce the likelihood of this happening is to develop a good relationship with the people whose house you are buying.
Don't just deal with them through an estate agent, get their phone number or email address. They have been living in your future home. They are the people to ask, if you have any questions. They are certainly more likely to know the answers than the estate agents.
The process of buying and selling a house can be a very stressful experience. There is always a chance that somebody may pull out of the deal. The better a relationship you have with the people you are buying from, the less chance there is that they will cause problems for you. There is especially less chance of gazumping.
The Importance of Good Communication When Buying a House
The process of buying a house in the UK can be lengthy. As the whole thing drags on, people can get very anxious. It is vitally important that you maintain good communication throughout the process, so that the process does not break down.
- Find out how quickly the seller wants to move at the start. Make sure their timeline fits with your timeline.
- Don't disappear on holiday without telling anybody.
- Don't ignore letters relating to the move. Deal with them promptly.
- If you have any questions, ask them. Before putting in an offer, ask as many questions as possible. This is your future home you are considering. You need to be sure you are making the right decision.
A House is a Home
Make sure the house you buy is a place where you want to live for a long time. It should be a home, a place where you think you will be happy for quite a few years. There is no certainty that house prices will rise, so don't think of it as a guaranteed investment opportunity.
You can make improvements which may increase the value of your house, but house prices do not always go up. Treat your house as a home and plan to stay there for a long time. However, as property expert Phil Spencer, author of How to Buy Your First Home (And How to Sell it Too), says you don't need to think of a first home as a 'forever house.' You may have to compromise when taking your first step on the housing ladder. If you are a first time buyer you probably won't get everything you won't in the first home you buy.