How do you buy a home in the UK? What are the stages of buying a house? These questions are typically easy to answer if you have been through the process already.
First-time buyers tend to not understand the complete process of buying a home in the UK, so we thought we’d help them out…
The Stages of Buying a Home in the UK
Step #1: The Fun Part!
The first step is to find a home on the market that you want to buy and that you can afford. This is the exciting part where you get to go on viewings and imagine putting your own stamp on a property.
To understand what you can afford, you need to get an idea of what type of mortgage you can get. One way of doing this is by using the mortgage calculators on mortgage lender websites.
Or go one step further by agreeing a ‘mortgage in principle’. This is when you speak with lenders to find out what they are willing to offer you and agreeing to it without signing on the dotted line. You may need to pay a fee for this, typically starting at £100.
Our top tip: Before arranging a meeting with a mortgage advisor, check your credit score in case there are errors that could lead to an unfair mortgage rejection!
Step #2: Make an offer
Once you have found a property you wish to buy, make an offer via the estate agent hired by the seller. You might want to find out from the estate agent how long the property has been listed for sale as this could give you some bargaining power to make a lower offer than the listed price.
Step #3: Offer Accepted – Now what?
Once you have an offer accepted, it is time to get into the nitty-gritty and do some initial legal checks. You’ll need to hire a solicitor to carry out necessary checks on the property, and to spot issues that could make the property less valuable. Most solicitor fees for this range from £500 to £1,500 and they usually ask for 10% of this in advance.
The next check is a valuation survey, which is carried out by your mortgage lender. They will check the property to ensure what you are paying for the property is in their eyes correct. This is to make sure they are lending wisely. Sometimes this survey is included in the mortgage you agree, and other times you will have to pay as much as £1,000+ depending on the valuation of the property.
Step #4: More checks…. Your surveyor
As well as the above checks, you then need to carry out your own due diligence to ensure you are not buying a property that has major structural issues. To do this, you hire a professional surveyor to carry out these checks. Often you can request different levels of service from them which go up in price depending on the detail of the survey. Expect to pay above £600 for the most comprehensive package.
If they spot an issue which could cost £3,000 to repair, you could then renegotiate your offer based on this information – and even supply proof to the seller!
This step is critical. The Royal Institute of Chartered Surveyors (RICS) found that people who chose the wrong surveyor package had an average repair bill over £5,500 once moved in.
Step #5: Securing the mortgage (Finally!)
The next stage can be the most stressful because time and money have already been invested into the home purchase. Yet, everything can still go wrong. You could be ‘gazumped’ by someone with a bigger offer, the seller might not accept a new offer based on the surveyor’s findings, or your mortgage lender may not want to offer the previously agreed deal anymore.
If everything has gone to plan, the mortgage can then be finalised, and an arrangement fee will need to be paid. Some people add this smaller fee to their mortgage. But note, if you do add it in, you will be paying interest on that fee in line with your mortgage terms.
Once this has been settled and the mortgage agreed, you have seven days to change your mind. Many buyers use these days to see if there is a better deal out there, others just want to push through the purchase.
Contracts have yet to be exchanged at this point and you can still pull out – but so can the seller!
Step #6: The Contract Exchange
The contracts of sale and purchase are then exchanged, and these should be looked at by your solicitor to make sure everything is correct and as agreed. At this stage, the seller may ask for a holding deposit of a few hundred pounds.
Our tip: As soon as you exchange contracts, start thinking about structural building insurance as you will want this instantly.
Step #6: Dotting the ‘I’s and Crossing the ‘T’s
There are a number of smaller steps to complete the home purchase. These are:
- Money is exchanged between both parties’ solicitors bank accounts
- Mortgage account fees might need to be paid (£100-£300)
- Your solicitor will register the property purchase with the Land Registry
- Pay your solicitor’s fees
- Pay Stamp Duty within 14 days
- Start looking for a removal company
If you want a professional removal service in Bristol, look no further than On the Dot Removals. We provide trusted and friendly house removals in and out of the area. Contact us today for a quote!
Stamp Duty Payments Explained
Stamp Duty is a type of tax that you pay when purchasing land or property in the UK. The amount you pay depends on the value of your home.
In 2020, the UK Government has temporarily stopped the need to pay Stamp Duty to help the property market recover from the COVID-19 pandemic. Learn more about the Stamp Duty holiday if you plan on buying soon!
Is a Mortgage Advisor Worth It?
A mortgage advisory is a business that helps people find the right mortgage deal for them. They usually charge for their service but some do not, and instead, they receive a fee from the lender who agrees a mortgage with their client, i.e. you.
If you do use a mortgage advisor, look for whole of the market advisors. These are advisors who do not just have relationships with a handful of lenders and instead search all of the lender market to find a mortgage for you.
This means they don’t limit your options – and your chances of getting a better mortgage deal!
Now It’s Time to Pack!
And now you know the intricate process of one of the most stressful things you will do in life. Remember to make it easier by choosing the reputable solicitors, trusted surveyors and a professional home removal firm!
But the stress doesn’t completely end there. Next you have to pack for your move. Learn how to make packing for a move easier in our home packing guide!