Maybe it’s your first time buying a house, and you’ve no idea what steps are involved, or you’re moving on to a new home and need a refresher.
We’ve teamed up with Zoopla to create this guide to buying a house.
Disclaimer: This is a simplified guide to outline the steps in purchasing a property in the UK. Depending on the property type, your employment status and many other variables, the process will involve other steps and considerations. Always speak to professionals along the way.
Find your budget
There are two main financial commitments you need to figure out when starting the process of buying a house:
1. Your deposit - this is normally at least 10% of the property price, but you can put in more if you have it
2. Monthly mortgage payments - likely your largest outgoing, and the amount reflects the amount you’re borrowing plus current interest rates
It’s important not to stretch yourself either. With changing interest rates and unpredictable property prices, you should save money for emergencies.
The quickest way to determine how much you can afford is to look at your current savings and monthly income.
Your savings is for your deposit and other associated costs like Stamp Duty Land Tax and solicitor fees. A first-time buyer is unlikely to pay Stamp Duty, but it depends on your property price. You can use Zoopla’s calculator to check.
Your monthly income is for mortgage payments and bills like council tax, utility and insurance. Zoopla has a mortgage calculator on every property, so you can check if it’s in your budget. Make sure you have enough to cover these and other expenses like food and transport.
We’d also recommend checking your credit score for errors, as lenders will look at this when considering your mortgage application.
Find your dream home
Now you have a budget, you’re ready to start the exciting bit – house hunting.
Most estate agencies upload their properties onto property websites like Zoopla, where you can find available homes for sale. You can filter by budget, location, rooms and even words like “garden” to find your dream home.
We recommend creating a list of:
- must-haves - these are your non-negotiables and might include location, number of rooms and other things you can’t compromise on
- nice-to-haves - these are things that you’d like, such as a dishwasher or balcony, and can help you decide between properties if you’re lucky enough to find multiple
- deal-breakers - these are things you absolutely can’t live without or with, such as room size or a high crime rate
Once you have your list, it can make shortlisting your properties easier.
Consider location and proximity to your workplace, schools and transport links.
Arrange viewings close together so you can compare. If you find a property you love, research the local area to make sure it has all the amenities you’d like.
Related: House viewings: What to look for
Make an offer
There’s a careful balancing act between getting the best price you can and getting your offer accepted quickly enough that you don’t lose out to another keen buyer.
Suppose several people are interested in the same property. In that case, offers may go above the asking price, but you shouldn’t overstretch your budget or make an offer in haste for fear of losing out.
You need to ensure it’s the right home for you and within your budget. There will always be another home right for you.
Get a mortgage
When it comes to finding the right mortgage for your circumstance, you have two main decisions to make:
- Do you want a repayment mortgage or interest-only? The latter is pretty hard to come by, and you’ll need a separate payment plan to pay off the loan, as your monthly payments only cover the interest.
- Are you going for a fixed-rate or variable? The former offers more peace of mind as you know your monthly payments won’t increase if interest rates do, but you also won’t benefit if interest rates drop.
You’re more likely to get a good deal if you shop around, so don’t just go to your bank.
Working with a mortgage broker or adviser
A qualified mortgage broker can help you with the legwork and find deals that might not be available on the high street.
Some charge a fee while others take a commission from your lender to cover their costs.
We recommend using a site like Unbiased to find a mortgage adviser or broker.
Related: First-time buyers’ guide to mortgages
Arrange a solicitor
Specialist property lawyers called conveyancers look after the buying and selling of properties. Finding a good one can make your experience more manageable and less stressful.
They handle the legal paperwork, organise the Land Registry and local council searches, draft the contract and manage the money exchange.
You can do your research while still house hunting, so you won’t have to rush the decision and work with the first solicitor you find.
Organise a survey
Your lender will carry out a valuation survey on the property, but it’s recommended that you arrange a property survey to make sure any potential issues are uncovered before you go through with buying the house.
The three types of property surveys are:
- RICS condition report
The cheapest and most basic survey. It’s a good option for new-builds and conventional homes in good condition. You’ll get no advice or valuation with this survey.
- RICS homebuyer report
A more thorough survey that looks inside and outside the property. It offers advice and a valuation. Suited to conventional properties in decent condition.
- Building or structural survey
The most in-depth survey. It’s beneficial if you’re buying an older home or one that could need repairs.
If you’d like to continue with the purchase, speak with the vendor (the sellers) and ask them to fix the issue before completion or take the repair cost off your offer.
Agree to a completion date
Once you have your mortgage offer and the results of the searches (and everything is okay), work out a completion date that works for you and the seller.
If you’re in a chain (more than two properties relying on the sale and purchase), try cooperating as much as you can with the seller and hoping they do the same.
It’s worth noting that everyone involved can withdraw their property without legal consequences until you exchange contracts. The process slightly differs in Scotland, where you exchange contracts before doing specific searches, so check with your solicitor.
Exchange contracts
This is when your solicitor and the seller’s solicitor swap signed copies of the contract.
It’s a significant milestone, so you can relax safely knowing there’s only a small amount of paperwork left before you get your hands on the keys to your new home.
When you exchange contracts, you and the seller are committed to the deal. If you pull out after this stage, you’ll lose your deposit. So if you have any concerns at all, make sure you iron them out before exchanging contracts.
Completion
A few things happen before you’re free to pick up your new home’s keys. Your solicitor will send you a completion statement detailing the money owed to them.
They’ll also do a few more searches to check that you’re not bankrupt and the seller still owns the house.
Your solicitor will also arrange for you to sign the transfer deed and then request the money for the house from your lender.
This is also when we'd recommend setting up your home insurance if you still need to do so to make sure you cover your new home is protected from the moment you move in..
They’ll then send this to the seller’s solicitor and receive the title deeds. You’ll pay any stamp duty, the sale will be registered with the Land Registry (or equivalent), and your new home is officially yours. Congrats!
