Buy House UK – A Guide To Purchasing Property In The United Kingdom

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Introduction

Buying a house is one of the most important financial decisions you’ll make in your lifetime. It can be an exciting process, but also complex and stressful if you’re unfamiliar with the UK property market. This guide will talk you through everything you need to know when looking to buy a house in the UK, from saving for a deposit and getting a mortgage to deciding on location, finding the right property and making an offer. We’ll also provide tips to make the conveyancing process smooth and cover additional costs to factor into your budget. Read on for a comprehensive overview of what’s involved in purchasing a residential property in the United Kingdom as a first-time buyer or home mover.

Saving for a Deposit

The first step in buying a house in the UK is saving enough money for a deposit. This is a lump sum you’ll need to put down to secure a mortgage – generally between 5-20% of the property price. The minimum deposit required depends on the type of mortgage you apply for.

  • For a standard mortgage, you’ll need at least a 5% deposit.
  • For a ‘Help to Buy’ equity loan, you only need a 5% deposit.
  • Most lenders will offer better rates if you can put down a 10-15% deposit.
  • You may need as much as a 20% deposit for the very best mortgage deals.

The bigger the deposit you have, the better the mortgage rate you can secure. Aim to save as much as you can – the more you put down upfront, the lower your loan-to-value ratio will be. Setting up a dedicated savings account and using tools like automatic transfers can help you discipline yourself to regular savings. Cutting back on non-essential spending is also key. It can take years to build up sufficient funds, but the longer you can save for, the smoother the home-buying process will be.

When you’re ready to buy a house in the UK, having a substantial deposit can open up more options and make the process smoother. So, it’s crucial to prioritise your savings and diligently work towards your goal of owning a home.

Getting a Mortgage in Principle

Before starting your property search, it’s advisable to obtain a mortgage in principle (also known as a ‘Decision in Principle’ or ‘Agreement in Principle’). This is a letter from a lender confirming they would likely lend you a certain amount, subject to further checks. It proves to sellers you can afford the property and gives you a budget to work within. 

Mortgage brokers can help assess your situation and find the best deals available for your circumstances. You’ll need to provide details of your income, outgoings, credit history and existing debts so the broker can determine loan eligibility and affordability. The lender will run a credit check when issuing the mortgage in principle, though it leaves only a soft footprint on your credit file. With this letter, you can property hunt and make offers with confidence.

Deciding Where to Buy

Choosing the right location is crucial when buying a house. Think carefully about which neighbourhoods, towns and cities suit your needs and budget. Key factors to consider are – 

Commuting –  How long is the journey to your workplace? What public transport links are available? Be wary of traffic congestion which could make commute times longer.

Amenities –  What shops, restaurants, parks, and leisure facilities are nearby? How will this suit your lifestyle? proximity to good schools is also important if you have children.

Affordability –  House prices vary hugely across the UK – check local averages to know how they align with your budget. Also, factor in potential rental yields for investment.

Prospects –  Is the area well maintained or depriving? What are forecasts for future housing demand and prices? Ascertaining this will ensure your purchase retains value.

Safety and crime –  Does crime data suggest the locality is secure? Visit at different times of day to get a feel for community feel and street safety.

Once you’ve explored locations in person, cross reference with your needs list to determine the best places for your property purchase.

Viewing Properties 

Viewing houses for sale is an essential part of the buying process. It allows you to get a sense of properties in person and compare your options before making an offer. 

Finding Properties

There are several ways to find houses for sale, including – 

  • Online property portals like Rightmove and Zoopla – set up email alerts for new listings.
  • Estate agent windows and websites – drive around neighbourhoods to find ‘for sale’ signs.
  • Property auctions – a fast way to purchase, but has risks so seek guidance.
  • New build developments – builders like Persimmon and Taylor Wimpey advertise upcoming projects.

Narrow your search by filtering for location, number of bedrooms, price range and other key criteria. Shortlist at least 10-15 properties for viewings.

Scheduling Viewings

Once you’ve found properties of interest, contact the estate agent or owner to arrange viewings. Most allow open house viewings where you turn up during allotted hours, while others require set appointments. Give plenty of notice and be flexible with timing to maximise your options. Weekend and evening viewings cater for working buyers.

Ask the agent for as much detail as possible in advance to assess suitability – don’t waste time viewing unsuitable houses.

What to Check During Viewings

When you view a property, evaluate it thoroughly inside and out. Key things to look for are – 

  • Layout and condition – test doors/windows, check for mould and faults and consider potential renovations.
  • Sizing – measure rooms and ask what fittings are included (eg white goods).
  • Noise levels – visit at varied times to check for disruptions. 
  • Lighting – open curtains/blinds to see how much natural light enters rooms.
  • Parking – note allocated spaces and visitor availability.
  • Neighbourhood – get a feel for kerb appeal and surroundings.

View the loft and cellars if possible – issues like dampness can hide away. Take photos during visits to compare later. Don’t rush the process – viewings help decide if a property has potential.

Making an Offer on a House

Once you’ve found a suitable house to buy, it’s time to make an offer and begin negotiations with the seller. This is an exciting milestone but requires care to achieve an agreed sale price. Follow these steps – 

Compare market value – What price does the property warrant based on location, features and condition? What have similar nearby homes sold for lately? Consult an estate agent for advice.

Consider your budget – Factor in renovation costs and determine your maximum purchase price based on mortgage affordability. Remember to keep some savings back.

Submit your offer – Most buyers offer below the asking price initially. Submit your written offer via the estate agent with reasons why it reflects market value. Outline proposed payment timescales too.

Negotiate terms – The seller may accept or counteroffer a higher price. Negotiate calmly and rationally until you reach an agreement both are happy with. Keep communication clear and positive throughout. 

Pay deposit – Once the offer is accepted, you’ll need to provide a deposit of around 10% of the agreed sale price. This secures the property during conveyancing.

Don’t get carried away with the emotion of buying and exceeding your budget – negotiate assertively and walk away if need be.

Conveyancing When Buying a House 

Conveyancing is the legal process of transferring home ownership from seller to buyer. It’s a complex stage, so hiring a conveyancing solicitor or licenced conveyancer to manage the transaction is highly advisable. Typical steps include

  • Carrying out ID checks on the buyer and mortgage provider
  • Requesting legal title deeds and drafting the contract
  • Submitting property enquiries and checking fixtures included in the sale  
  • Negotiating any conditions of sale 
  • Transferring funds from buyer to seller upon completion
  • Registering the buyer as the new owner with HM Land Registry

The buyer and seller will both need to provide identification, proof of address, mortgage offer letter and other financial evidence as part of the conveyancing process. It’s essential to respond promptly to any queries or requests to avoid delays. Allow around 8-12 weeks for conveyancing – your solicitor will keep you updated on progress.

Home Buyer Survey and Valuation

Before the exchange of contracts in conveyancing, you’ll need to commission a Homebuyer Survey and Valuation report. This is carried out by a Chartered Surveyor who visits the property to assess its condition and value. The report highlights any structural issues, repairs required and the general state of the building. It also confirms the property’s market value to ensure you pay a fair price. 

The standard Homebuyer Survey and Valuation costs around £500. For peace of mind, you could upgrade to a Building Survey (£1,000-£1,500) which gives more technical detail. Factor these costs into your buying budget. Also, keep back savings for any immediate repairs the survey recommends.

Exchanging Contracts 

Exchanging contracts is a pivotal stage in the buying process – both buyer and seller are legally committed to the sale. It occurs around 2-4 weeks before completion. The buyer must transfer their deposit amount to the conveyancer, who will hold it until completion. 

You should now

  • Arrange building insurance – this must be in place from the exchange. 
  • Confirm a completion date with the seller.  
  • Give notice to your landlord if renting.
  • Book removal vans ready for the moving day.

There’s no going back from the exchange – you are legally obliged to buy the property. Ensure everything is in order before signing and exchanging. Your conveyancer will witness the contract exchange.

Completion Day

Completion day is when you legally become the owner and receive the keys to your new home! This happens around 2-4 weeks after exchange. The outstanding balance of the purchase price is sent to the seller. You’ll need to transfer your deposit and have the mortgage funds ready.

On completion day 

  • The seller must vacate the property by the agreed time. 
  • Your conveyancer will authorise the release of the monies.
  • You’ll receive confirmation that contracts have been ‘completed’.
  • The estate agent will hand over the keys – you can move in!

Arrange to pick up the keys in person if possible. Check utility meters and test appliances before the agent leaves. Make sure to bring identification – you’ll need this to set up new utility accounts.

Additional Costs to Factor In

Beyond the property price, you’ll incur various extra fees and costs when buying a house in the UK

  • Mortgage arrangement fees – around £1,000
  • Solicitors fees – approx £1,000-£2,000 
  • Stamp duty tax – 2% above £125,000, scaling up to 12% on expensive houses
  • Land registry fee – £20-£910
  • Homebuyer report – £300-£600
  • Buildings insurance – £100-£300 annually
  • Removal costs – up to £1,000 
  • Improvement and redecorating budget

Saving extra to cover these costs ensures you have finances in place to complete the purchase. You may be able to add some to your mortgage but avoid over-borrowing. Shop around for conveyancers and removals to find more affordable options.

Final Tips for Buying a House

Buying a property in the UK is complex, but these final tips can help make your purchase go smoothly

  • Research thoroughly before committing – never rush into a transaction.
  • Be realistic about affordability and don’t over-borrow on your mortgage. 
  • Hire professionals to handle legal processes like conveyancing.
  • Study the Homebuyer Survey in detail and budget for repairs.
  • Keep paperwork and records well organised throughout.
  • Expect delays and setbacks – manage stress by planning.
  • Enjoy viewings and celebrate when you finally get the keys!

With the right approach, buying a home in the UK can be hugely rewarding. Following this guidance will help navigate the many steps involved. Wishing you the very best on your exciting journey to homeownership!

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