MyLocalMortage Editor, 34 months ago9 min read
Figures from the Office for National Statistics have shown that average house prices have increased by 10% over the year to November 2021. The average UK house price jumped to £271,000 in November 2021, which is £25,000 higher than the same time last year. As a result, those who are looking to buy a house will have to deal with high prices, a crowded market, and fewer available properties. This may sound concerning for those who are planning to step onto the property ladder, but anything is possible with the right help, knowledge, and preparation.
To help you fulfil your dreams of becoming a homeowner, we’ve put together some tips and advice on how to survive the house-buying process for the very first time.
Defining a first-time buyer isn’t as easy as it may seem. What constitutes a first-time buyer can vary between lenders, while the Government will have its own rules that you’ll need to meet to qualify for the benefits of first-time buyers.
But put simply, if you’ve never owned a home before, then you are well and truly a first-time buyer! This applies to both individuals and couples. If you own or have previously owned a commercial property, as long as it wasn’t a home and had no living quarters attached to it, then you’ll qualify as a first-time buyer.
So, who doesn’t qualify as a first-time buyer? Any kind of homeownership, whether it was part of a commercial property, inherited, or bought for you by your parents, means you won’t be classed as a first-time buyer. If you plan to buy as a couple but one of you has bought before, you won’t qualify. Prospective buy-to-let landlords won’t fall in the first-time buyer category either.
In today’s internet-fuelled world, you’ll be able to find plenty of information from housing industry experts, mortgage advisers, and other first-time buyers who’ve already trodden the path you’re planning to take. Doing your research will allow you to learn as much as you can about the housing market, which can help you make better decisions.
Research isn’t always fun, but it’s essential. Just like you wouldn’t go into an exam without revising, you shouldn’t attempt to buy a house without being kitted with the knowledge to get you through the process. To help you refine your search, here are some of the key points you should learn to prepare yourself:
- The timeline of buying a property
- Know your credit score
- Research the areas you’re interested in buying
- How much deposit you should save
- How much you can borrow
- Mortgage rates
- The additional costs of buying
- What’s happening with the house rates in the area
All first-time buyers will already know that saving as much money as possible is the main step towards securing your new home. However, the 5% to 25% deposit isn’t the only thing that you need to save up for. There are many hidden fees you need to consider, including:
Solicitors’ fees – For the legal help and paperwork. These might include:
- Contract draft/terms of engagement - Sets liability boundaries.
- Final contract - Summarises terms discussed along the way.
- Local authority searches - Restrictions related to land or property which can be used to negotiate the sale.
- Land Registry searches - Describes the property and who owns it.
- Water authority searches - Reveals sewer connections and water supply to the property.
- Chancel repair search - This shows if the buyer will be liable to pay for maintenance of the local church.
- Environmental search - Surveys if any past use has led to contamination.
- Location-specific searches - Research based on the location of the property.
Mortgage fees – These can be as high as £5000 and will vary between lenders.
A survey – This is essential to ensure your new home isn’t falling apart.
The moving process.
Any repairs or renovations.
Furniture for your new home.
Home insurance – This is required by most lenders.
Stamp duty - Most first-time buyers are exempt from this if their home is below £300,000, or they will be required to pay 5% on purchases from £300,001 to £500,000.
It’s difficult to come up with a fixed sum to cover your moving costs, so you’ll rarely be able to save the exact amount you need to cover these fees. Saving as much money as possible is key to covering the costs you didn’t anticipate. Learn more on how to save for a mortgage here.
The average cost of a house in the UK is at an all-time high of £275,000. These prices mean that many buyers are finding themselves paying way above the asking price for properties. To protect your finances, you should consider looking for properties that are under your budget.
This means you should stick to your guns. If you think you’ve found the perfect home, you shouldn’t be afraid to do some good old-fashioned haggling when it comes to the price. It may feel a bit awkward, but everyone does it! If houses in the same area haven’t sold for as much or if your survey has revealed any defects, then negotiating is a must.
You need to remember that this is likely to be the biggest investment you’ll make in your entire life. If you don’t ask, you’ll never know. And if you’ve really fallen head over heels in love with a home, then you shouldn’t give up.
Even if you have fallen in love with a particular house, remember to keep it cool. Avoid thinking of it as your dream home and definitely don’t start measuring rooms for curtains and furniture. This will give signals to the seller that you can easily be won over and it will make it harder if you run into any problems further down the line, as they may think that you’ll be easily persuaded to ignore the issues if they know that you’re keen.
If you’re looking at homes with your partner, a friend, or a family member, make sure you spend some time with them away from the seller or estate agent to discuss your thoughts. Most of the time, someone objective will see things that you may have missed due to your excitement. This can be anything from the poor lighting in the living room to the busy bus stop right outside your front door.
Whether it’s the pride talking or your desire to save money on third-party help, many of us think that we can do it all ourselves. However, if you’re starting to feel overwhelmed and out of your depth, then you shouldn’t be afraid to ask for help, especially when you’re putting so much time and money into such a huge commitment. Cutting back may save you money, but it might not be worth it.
After you’ve done your research and have found your dream home, speaking to a mortgage adviser is one of the best steps you can take to ensure that your journey towards homeownership goes as smoothly as possible. They’ll help you find the right mortgage to suit your earnings and outgoings, and will guide you through the process from start to finish.
A conveyancing solicitor is another person you should speak to. They will handle all the legal aspects of buying a property for you and what red flags to look out for. They’re extremely important, as are the searches they’ll conduct and the contracts they will draw up.
From small hiccups, like paperwork delays, to larger issues, like offer disagreements, it’s not uncommon for problems to crop up. Just remember that these issues don’t mean that things won’t go ahead and the sale will fall through. The process of buying a house can be long and unpredictable. Some people are lucky and complete their purchase in just a couple of months, whereas it can take up to a year, or longer, for others.
Whatever your story may be, don’t give up! Remember that you’ve planned and saved for months, endured countless meetings and phone calls, and viewed dozens of houses just to find this perfect one. Trust us when we say that it will all be worth it in the end!
So, whether you’re currently renting or living with family, there are plenty of ways that you can start preparing to become a first-time buyer. To help you get started, find a mortgage advisor near you with MyLocalMortgage.