Buying a House in the UK 2022

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Buying a house will most likely be the biggest purchase you will ever make, and if you’re a first-time buyer, having all the information before you start is crucial to avoid making a costly error. In this guide we lay out all the steps on how to buy a house in the UK.


Questions To Ask When Buying a House

house

Before you even begin thinking about getting a mortgage and looking for properties, the first thing you will need to consider is what your plan is for the future. Buying a property is a long-term investment that will likely give you return over time, but it takes a lot of commitment and you need to know how much you can afford and what time of property will fit your wants and needs.

How Much Can I Afford?

Buying a property - whether as a first-time buyer or as an experienced buyer - is always expensive. You will need to assess your financial situation and map out exactly what your monthly expenses are like so you can plan for your mortgage repayments. This means completing your own financial audit to see whether you are in the economic position to buy a house.

Here are a few of key things to consider when doing a financial audit:

  1. Utilities
    How much can you afford to spend on gas and electricity, water, and broadband. Remember if you move into a bigger property, your utilities will likely increase.
  2. Food
    Remember to factor in how much food will cost you month to month. If you’re planning to move to a different area, the price of food might be higher or lower.
  3. Children’s Expenses
    If you already have or are planning on having children, you will need to make allowances for your children’s expenses.
  4. Savings
    You should plan for making continuous savings while you pay off your mortgage. This can be regular saving for holidays or an emergency fund, or it can be towards a retirement plan. Your savings are also crucial for making sure you can afford the deposit and the up-front costs.
  5. Car Costs
    If you have a car, remember to include the costs for petrol or diesel as well as MOT and car insurance.
  6. Boiler Cover
    You will also want to consider getting boiler and heating cover to protect yourself from any unexpected costs of having to replace a boiler if something goes wrong.

You should also consider having a credit check. In order to apply for a mortgage, you should have a good track record of paying your bills and rent on time, and regularly paying any credit card debt. A good credit score will influence how much you can borrow from a lender. Most mortgage lenders will do a credit check on you when you apply, but it’s a good idea to do your own so you make sure exactly where you stand.

Check out our Moving Home Utilities Guides!

What Type of House Do You Need?

When looking for a home to buy, knowing what best fits your wants and needs will help narrow down your options. There are so many different types of property out there, it can be confusing if you don’t have an idea of where you want to be living.

Since buying a house is such a big purchase and will be your home for a considerable amount of time, you should make absolutely sure it’s the right place for you.

Freehold or Leasehold? When buying a property, it’s important to know the difference between a freehold property and a leasehold property. A freehold property means you buy both the land and the property with complete ownership over the two. A leasehold property means that you will own the property, but the land remains in ownership of the seller (this is typically the case with flats).

Here’s a quick buying a house checklist of thing to consider when looking:

  1. Location and Neighbourhood
    Do you have access to shops, schools, doctors, and social spaces that you want?
  2. Noise Pollution
    Is the property next to a busy road or near an airport?
  3. Flat or a House
    Do you want to live in a flat or a house? Usually a flat will be a leasehold property but houses can be more remote.
  4. New build or Second-hand Property
    Buying a new build can involve a lot more hassle than a second-hand property. You might have to put down a reservation fee or even wait for it to be built. You might even come across snagging issues where there is incomplete work.
  5. Condition
    Some properties can be offered at a discount if they need a bit of work on them however covering the cost of repairs might be over the discount.
  6. Size and Bedrooms
    If you have a large family or it's just the two of you, the amount of space you need is important. You might be able to make a saving if you are a smaller household.
  7. Bathroom and Kitchen
    How would you like your bathroom layout to be and what fitted appliances would you prefer in the kitchen?
  8. Garden
    Do you need a garden and could you afford the extra costs?

Can I buy my council house? In the UK, the right to buy scheme helps people who live in council housing buy their properties at a significant discount after being a tenant for 5 years. Check out our Right to Buy guide to learn more!

How To Buy a House in the UK

piggy bank and money

Once you’ve decided on what type of property you would like to buy and what your budget is, you’ll then be ready to take the next steps. You’ll need to know how to find your dream property and then make an offer.

How Do I Find a Property?

The next step to buying a property is looking for the right one for you. This can be a long process as you contact different sellers and narrow down your searches in order to find a property that fits both your budget and what you want. There are lots of ways you can try to find your ideal property:

  • Real estate agents
  • Real estate websites
  • Property listings in newspapers

Going through a real estate agent can have a lot of advantages if you are unsure how the UK housing market works. Often a real estate agent will be able to find a property that fits your needs and budget. They can also help guide you through the legal process and advise on what to do.

What Is the Process of Buying a House?

The process of buying a house can be very long and expensive. There are many parts to it that can be confusing, so it’s best to get an overview of how it works before taking the plunge yourself.

steps to buying a house infographic

All of these steps can seem quite intimidating at first, but we’ll go through them to make sure you have a good idea of what to expect!

How Do I Make an Offer?

world in hands

Once you’ve decided on the property that you would like to buy, you can begin the process by making an offer. If you’re going through a real estate agent, they will advise on what amount you should offer for a property and they will tell the seller. Don’t be afraid to offer a lower price on a house if you believe the property will need repairs.

Your real estate agent will tell the seller of how much you’re willing to offer and the seller will either reject the offer or make a counter offer. At this point, you are also able to make a higher offer. There might be some back and forth between you and the seller over price but this is usual.

Once you do make an offer, you might be asked to make a holding deposit of £500 to £1000 to ensure that you are serious in making the offer.

Having Your Mortgage Ready

By the time you are ready to make an offer on a property, you should have already made the necessary arrangements for your mortgage. After you have made an offer on a house, you should fill in a mortgage application with your chosen lender, who will also want to value the property. You’ll also need to put down a mortgage deposit.

What Is a Mortgage Valuation?

When you apply for a mortgage, your lender will want to value the property to make sure their interests in the property are protected. A lender will want to make sure that if there are any problems with the mortgage payments, the value of the house will compensate them for any losses.

Although the mortgage valuation is conducted by your lender and is for their benefit, you will need to pay for it as an extra fee.

Find out more about Mortgages!

What Is Stamp Duty?

Stamp Duty is the most infamous of taxes it when to comes to buying a property. Stamp Duty - or the Stamp Duty Land Tax (SDLT) - is a tax that is paid by the buyer when they purchase a property. It is usually worked out as percentage of the property that is based on the amount the property will cost. Stamp Duty is applied when the property is worth more than £125,000.

Here are the Stamp Duty bands:

Property Value Percentage Stamp Duty
£125,000 or less 0%
£125,000-£250,000 2%
£250,000-£925,000 5%
£925,000-£1,500,000 10%
More than £1,500,000 12%

Source: UK government

If you a first-time buyer, you are liable for a discount off some or even all of the Stamp Duty.

Do I Need a Solicitor for Buying a House?

As well as an expensive process, buying a house involves a lot of legal paperwork that can be a headache to get around. For this reason, it is very common to use a solicitor - or a conveyancer - to help you out with all the legal stuff.

What is a conveyancer? A conveyancer is a legal executive who can process the legal work involved in transferring ownership of land. Conveyancers are not solicitors but they can help with processing your purchase. Conveyancers must be licensed and can only operate within England and Wales.

If you want to enter into joint ownership of the property with someone else, you might want to consider a tenancy in common. This means you will share an equal right in the property. A solicitor can help you arrange this as well.

What Are Searches When Buying a House?

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Your solicitor or conveyancer will also conduct the legal searches for you. Searches are checks to find out about anything about your property that might restrict your ownership in some way in the future. Common searches include:

  • Where the property is listed (such as a B-listed building)
  • Tree preservation orders
  • New roads or future rail schemes
  • Flood risks

Searches are paid up front as fees to solicitors so it’s important to make sure you have enough to afford them.

Who Organises a Survey When Buying a House?

Although it is optional, it is strongly recommended that you have a survey of your property after the offer has been accepted. A survey is an overall assessment of the property for any potential problems that might present either benign issues or dangerous issues in the future.

A surveyor will come and assess the property and will give you a report on the property’s condition. Read the report and talk to your surveyor about the problems so you can decide on your response to the seller. If there are any serious issues, you will be able to request them to be fixed or you can negotiate a lower price.

Checking the Energy Performance Certificate (EPC)

An important part of taking over a property is making sure it has an up to date Energy Performance Certificate (EPC). This is a document that evaluate the energy efficiency of a property, giving a rank between A to G. You can easily search for your property's EPC on the government's postcode checker.

Mortgage valuation is not a survey! Despite sounding similar, a mortgage valuation and survey are not the same. A mortgage valuation is carried out by your lender and is a requirement, whereas the survey is optional. Sometimes, the surveyor may carry out the survey in order to confirm the mortgage valuation.

What Is the Exchange of Contracts?

contract and pen

When you and the seller are happy with the offer, the property, and the survey report, your solicitor will send you a finalised contract that will need to be signed by you and the seller. This will also include the details of the deposit for the property. This contract is legally binding and if you do withdraw, you might be liable to lose your deposit.

Following the exchange of contracts, the purchase will be completed about a month after. Your lender will process the mortgage payment, you will receive the deeds to the property and the keys will be handed over to you. You will also be billed by your solicitor.

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