According to recent statistics, over half of Britain’s working population cannot afford to buy a home. This statistic highlights the difficulties faced by first-time buyers trying to get on the property ladder and even the difficulties that can be faced by people moving up the housing ladder.

Even if you have an idea of the type of property you’d like, what sort of things should you look out for? Where do you start?

We’ve put this brief guide together to help you through the home buying process. For an explanation of any of the terms used, hover the mouse over the underlined term.

STARTING YOUR SEARCH

If you understanding why you want to buy it will help you find the most appropriate property for your need eg. are you getting married, changing your job, starting a family or moving out of your parents’ home.

Similarly, ensure you should have a clear idea of where you want to live eg. close to your work, near friends/family, close to local amenities, near a good local school, away from the town/city or in the centre of the town/city. In a new house or even a thatched cottage.

Decide what’s important to you personally and then base your search on these needs.

The Perfect Property?

Be aware that you’re not necessarily going to find your perfect property within your price range, so you might have to be prepared to compromise.

It’s a good idea to decide what’s really important to you before you begin your search. Making a list of the essential factors and the non-essential ‘but nice to have’ factors, will help you to focus your search.

HOW MUCH WILL IT COST?

Moving home can be a costly task, and in fact the costs can be more than many people first think.

In addition to the actual cost of your new home, you will need to think about legal fees, stamp duty, insurances and removal
costs – some of these can really eat into your savings.

The costs can be broken down into two types, one-off costs and regular costs. Examples of both types are shown below :-

One-off costs

Mortgage Application fee
Valuation/survey fees
High lending fee
Legal expenses
Stamp Duty – Click here for our Stamp Duty Tax Calculator
Registration Fees (Scotland Only)
Removal expenses

Regular costs

Mortgage repayments
Investment payments (if linked to mortgage)
Buildings insurance
Contents
insurance
Mortgage payment protection
Life cover
Council tax (see our article on reducing your council tax bill)
Household bills
Maintenance costs

HOW MUCH CAN I BORROW?

Before starting your property hunt, you will need to know how large a mortgage you can get – there’s no point looking at properties out of your price range.

Approaching a lender

Start by approaching several lenders and ask how much they will let you borrow. Many lenders now offer you an instant quote on their website – a quick, easy and relatively anonymous way to get a basic idea of what you can afford.

If you don’t have the time to speak with each individual lender, an Independent Financial Adviser (IFA) or Mortgage Broker will shop around for you. You should be ready to answer several questions about your finances so that the IFA knows that they are providing information about the mortgage deals that match your needs before you make the mortgage loan application.

Once you have found yourself a competitive rate, it is a good idea to request an ‘agreement in principle’ that confirms the amount you are able to borrow. It may be that you can use this to add leverage to any offer you make on a property by showg that you have the funds available for the purchase.

The amount you can borrow from a lender will be based on two factors; the size of your deposit and your salary. Lenders are usually prepared to lend you around three times your salary, or if you are buying as a couple, this rises to three times the first income plus the second income (or two and a half times your joint income).

When lenders decide how much they are prepared to lend, they will try to make sure you do not overstretch your finances and can make the mortgage payments. They will need to see the following :-

  • Proof of salary from your employer (or copies of your audited accounts
    if your are self-employed)
  • Evidence of the length of your contract (if you are
    working on a short term contract)
  • Evidence of any regular rent payments

The lender will also consult a credit reference agency and may want to see copies of current bank account statements.

HOUSE HUNTING

Once you have identified your ideal property and worked out your budget, you should begin searching to find out what is available.

Average House Prices

To see the average prices of houses sold over the past six months for a selected postcode visit a house price checking website like Zoopla.

For a wide selection of property for sale take a look at our home builders page.

THE HOME BUYING PROCESS

The home buying process is not the same throughout the UK.

In Scotland, the conveyancing process differs greatly to that in the rest of the UK. As soon as the seller has accepted a written offer on a property, it is legally binding. At present this is not the case in England and Wales, where a buyer can be gazumped at the last minute.

Your solicitor will be able to give you up to date details about the house buying process for the property you are buying in your chosen area.