So, you want to buy a house? To have a place to call your own, after years of renting. 

Whilst it may be a potentially long and complicated process, we’ve broken down each stage of the buying journey to help you understand how it works and what to expect. There are also some helpful resources to check out along the way. 

 

Saving for a deposit

When beginning your home buying journey, the first step is saving for a deposit.  A deposit is a lump sum payment that goes towards the cost of a property and is needed to get a mortgage (a loan used to buy a house.) 

It’s important to understand that deposits and mortgages are directly linked, as the more you can pay upfront, the less you’ll have to borrow and eventually repay. That’s why building up a large deposit can be very helpful later down the road. 

There are lots of online tools available to help you with this part of the process. Here are some of our favourites:

  • The Mortgage Deposit Calculator, from MoneySavingExpert, allows you to see how your money will grow depending on how much you put away and how long it will take you to reach your saving goals. 
  • The Budget Planner, from the Money Advice Service, allows you to understand your spending and analyses your results to help find ways to save money. 

 

Getting an Agreement in Principle

Whilst understanding how much you need (and are able) to save is vital, it’s also important to understand how much you can borrow.  Whether you’ll be approved for a mortgage is dependent on many factors, including the size of your deposit, and your financial situation and history. 

Luckily, an ‘Agreement in Principle’ can help you find out if you’re likely to be approved for a loan before making an official mortgage application. You can apply for an AIP directly through a lender (i.e. a bank, building society or independent provider) online or in branch, or through an independent mortgage advisor. 

This is also a great time to consider your mortgage options and what type of loan could be right for you. Speaking to an independent mortgage advisor can be especially helpful for this, as they will take into account your personal circumstances. This allows them to give a more tailored view of what mortgages are available to you.  Some mortgage advisors may charge you for the services they provide, with fees often dependent on the mortgage you choose and its value. Other advisors may give advice for free, however will earn a commission from the mortgage provider you decide to move forward with. They should tell you the cost of their services upfront, as well as if they are being paid a commission.

 

Putting in an offer

Now that you know that buying a house is financially viable, and not just a crazy aspiration (because you’ve got your AIP), it’s time to make an offer on your dream property. 

An offer is how much you are willing to pay for a property and is usually determined by the price a seller sets, however it is not set in stone. You can make an offer on a property through your estate agent, whether by phone, writing or email, who will then pass it onto the seller for them to accept or reject. Estate agents are legally obliged to pass on every offer made on a property, so you can be sure yours will be made known to the seller. 

It is a good idea to also include any favourable information when putting in an offer, such as an approved AIP, flexible move in date and if you are a cash or first-time buyer. This will help you appear more attractive to a seller and help them understand that you’re ready to buy.

 

Apply for a mortgage

Once your offer has been accepted, it’s time to officially put in your mortgage application.

If you have an accepted AIP, your lender will then carry out a more thorough check of your financial situation and history.  This is to ensure that they are happy to lend to you and will often require you to provide additional documentation, including bank statements and pay slips. If you pass all of the necessary checks and are seen as ‘credible’ for the loan, your lender will upgrade your AIP to a firm mortgage offer. 

In addition to making sure they are happy to lend to you, your mortgage provider will also check that the value of the property you want to buy is in line with what they’ve agreed to lend you. This is achieved through a ‘Valuation Survey’, and helps guarantee that your mortgage will cover the cost of your dream home. If the property is found to be more expensive than previously agreed you could face additional costs to cover the difference.

 

Get the legalities sorted

In addition to a mortgage, there are other legal aspects to buying a house that you need to tackle.  This is the stage where you need to find yourself a ‘Conveyancer’ or ‘Property Solicitor’, lawyers who specialise in property law.

A conveyancer or solicitor will manage the legal and administrative work that comes with buying a house. This includes drawing up and checking contracts, as well as transferring your money to the seller during purchase. 

To ensure you are going with a fully regulated and insured professional, you can check the Solicitors Regulatory Authority and the Council for Licensed Conveyancers registers for more information.  Your estate agent will also have a recommended supplier list, if you wanted to use one of their legal partners. 

 

Organise a Homebuyer Survey

Whilst you’ve come a long way in your home buying journey, there is only so much you can learn about a property from viewing and estate agents. 

A ‘Homebuyer Survey’ is a thorough examination of property that identifies any hidden issue and resulting costs prior to buying, including structural problems. This is designed to give you the peace of mind you need to proceed down the purchase path and avoid committing to something you’ll later regret.  It also allows your mortgage lender to agree to your property purchase, as any major problems found during a survey discourage them from lending to you. 

To conduct a homebuyer survey, you will need a chartered surveyor, so the Royal Institute of Chartered Surveyors (RICS) is a good place to start. Depending on your needs, such as the size and age of your property, there are three levels of survey to choose from:

Level 1: RICS Condition Report – This report identifies any defects, but does not include any advice or repair recommendations.  It also does not cover less serious or minor defects that may become an issue in the future. 

Level 2: Homebuyers Report – A more detailed report that can uncover any obvious rot or subsidence issues. 

Level 3: RICS Full Structural Survey (Building Survey) – The most comprehensive survey that allows you to identify issues and how serious they are.  Mainly targeted at older properties and for those who are planning major works. Also includes opinion on repair options. 

Depending on whether your survey uncovered any serious issues, or any aspects not previously mentioned to you by the seller, you may want to renegotiate your offer at this point so it better reflects the condition and work needed to the property. 

 

Additional paperwork 

Now you have a better understanding of your dream property, it’s time to tackle some more paperwork.  This can include collecting environmental reports, leasehold agreements and any related documents. 

In addition, now that you have a mortgage offer in place, you’ll need to organise the buildings insurance that will be required by your lender.  Buildings insurance covers the cost of rebuilding or repairing your home, if it is damaged by events such as fire or flooding. You can find many different options out there, with different features available such as protection against weather events, water leaks and subsidence. Some policies, such as those arranged by buzzvault, may also cover rebuild costs up to £750,000 and alternative accommodation up to £50,000. It is vital to organize your buildings insurance before the sale is made, to ensure your mortgage provider approves your loan.

 

Exchange contracts with the seller

With all the checks out of the way and everyone happy to continue with the property sale, it’s time for exchange of contracts. 

This is the point in the buying process where you and the property seller sign contracts legally binding you both to the sale of the property. Once this is complete, neither of you can back out without financial and legal consequences. 

In addition to exchanging contracts, this is when you pay your deposit, which is done via your conveyancer or solicitor. You will also agree on a completion date in the future, when the remaining cost of the property will be paid to the seller, via your mortgage lender. 

Your solicitor will also add you, the new owner, to the land registry and lodge an interest in the property that enables you to pay the seller.

 

Completion Day

As mentioned above, this is the day when the seller will be paid the cost of the property. This is done by your conveyancer / solicitor once they have received the required money from your mortgage provider. There are, though, additional fees and taxes that you as a buyer will have to pay. 

These include ‘stamp duty’, a tax you have to pay on a purchased property.  How much tax you’re charged is dependent on the cost of your property and there are lots of online calculators that allow you to see how much you should pay.  You’ll have 14 days after your completion date to submit and pay the stamp duty, with the process usually overseen by your conveyancer or solicitor. It’s also worth noting that if you are a first-time buyer purchasing a property less than £300,000 you will not need to pay Stamp Duty (however you will if your new home exceeds this value.)

In addition to stamp duty, you will have to settle any outstanding legal fees charged by your conveyancer or solicitor. 

 

Organise utilities and insurance

As well as moving your furniture over to your new home, it’s also important to move any utilities, such as electricity, gas and internet, and organise contents insurance for your new property.  

Your seller will have the information of what company provides what utilities, so it is best to call each provider and request the services are transferred to your name.  You should also tell them the date when they need to be switched over to you, which will usually be your completion date. 

Although you have already organised building insurance as a requirement of your mortgage approval, contents insurance can help protect the possessions within your home.  Once again, you can look online for different providers and offerings. When researching it’s important to keep your specific needs in mind, such as expensive tech or clothing collections you own.  Some contents insurance policies, such as those arranged by buzzvault, will also provide cover for your belongings during transit to your new property as well as out of home protection for bicycles and gadgets. These specific features are worth looking into, as well as payment options (monthly or annually) that can better suit your lifestyle and budget.