Property Blog and News / A guide to buying a property

A guide to buying a property

11 October 2019

Author

OnTheMarket
Property Expert

Buying a new home can be an exciting, but nail-biting experience.

“The house buying process in this country is fraught with bumps on the road, unexpected events and start-stop moments,” says Philip Norgan, Sales and Lettings Manager at Martin Kemps estate agents. “With the best will in the world, there will be hiccups along the way. Be prepared for them and understand that it’s not personal.”

So, to help you get ready for those bumps and hiccups, here’s OnTheMarket.com’s guide to buying a property. And if you’re selling something, don’t forget to take a look at our guide on that too..

Understand the jargon

You’ll come across plenty of terms and phrases in your house-buying odyssey that you might not have heard of. And so our jargon buster is your first stop to get in the know.

And if you’re wondering what the differences are in the process depending on where you live, the government’s Money Advice Service (MAS) has a timeline for England, Wales and Northern Ireland, and one for Scotland.

Work out your budget

The MAS says you should look at your finances before you start looking for that perfect property. It advises: “Consider how you’ll cope if your financial situation changes, or interest rates rise, and be careful not to overstretch yourself.”

There are lots of costs associated with buying a property and moving, which the MAS details in a handy guide. Among the biggest is Stamp Duty (formally known as Stamp Duty Land Tax) if you’re buying in England and Northern Ireland. In Scotland, you’d pay Land and Buildings Transaction Tax. In Wales, it’s Land Transaction Tax.

Stamp Duty is due on residential properties over £125,000 and there’s a discount for first-time buyers. To find out what you might need to pay, you can use the government’s calculator.

Other expenses include deposit (which the MAS averages at 5-20% of the purchase price), costs associated with a mortgage, the survey fee, any reports, legal fees, insurance and removals, plus everyday bills, for example council tax and potential leasehold costs, which could be more than you’re currently paying. So get out your spreadsheets, pens and paper and start planning.

And if you’re a first-time buyer, here’s some advice from OnTheMarket.com to read before the fun begins…

Get your documents in order

According to Gov.uk, buying a home usually takes between two and three months. And it can take longer if you’re in a chain. So it’s advisable to get as organised as possible from the get-go.

Whether you’re applying for a mortgage, or getting a solicitor on board, there are documents you’ll need to have to hand as you go through the process, whether that’s proof of identity, proof of address or proof of where your funds are coming from. These include passports and utility bills, bank statements, self-assessment documents and a letter if you’re being gifted money, for example.

Find a mortgage

Unless you’re a cash buyer, you’re likely to need a mortgage. The government’s bumper How to… Buy guide advises getting a ‘decision in principle’ (which can also be called an ‘agreement in principle’) before looking for properties. This is a document from a lender that gives an estimate of what you can borrow. “It gives you some indication of your budget and signals to sellers that you are serious about buying a property,” says the guide.

You can use the mortgage calculator on our site to get a sense of what the repayments might be. The amount you can borrow will be affected by your income, outgoings and credit score, which is a number calculated by lenders based on a number of factors. OnTheMarket.com has more about your credit score and how you can keep it in tip-top shape. And if you’re thinking about buying with friends to beef up your deposit, read our guide. There’s also more about joint property ownership on the government’s website.

If you’re selling a property to buy a new one, and you already have a mortgage, you might want to ‘port’ it across to a new property. It’s best to speak to your mortgage company as soon as you can to see what the options are.

Mortgage brokers and advisers are available. But, advises Philip Norgan, you should use a “reputable, whole-of-market mortgage adviser, not one that is on a panel.” He says an on a panel adviser “will be limited to between six and ten mortgage lenders.” You could also do a search online, including comparison websites. Philip says buyers should be mindful of the time-sensitivity of decision in principles.

The MAS says you might have to stump up for a booking fee of between £99-£250. And it also has a list of what you’ll need for a mortgage application.

Help with buying a home

There are a range of government schemes to support people to buy a property, from Shared Ownership to Help to Buy, which you can read more about in our article.

Finding a property

You might have an area in mind that you’d like to move to. But if not, there is a range of questions to consider. Philip Norgan advises having a checklist of “must-haves, would like, can do without and definitely don’t want.” He says: “Look at each property with those four columns in mind when choosing which ones to view. Don’t be afraid to ask questions of the agents about a property, particularly if you can’t find the answer on the brochure or the web.”

Questions could include: do you want shops nearby? What exactly is a ‘stone’s throw’? How many schools are in the local area?

Meanwhile, the top two considerations, says Steven Morton of Acorn estate agents, are:

  • The size of the property. “As a buyer, it’s important the flat or house you are buying will still be suitable for you should your family grow or situation change,” Steven says. That could be a second bedroom for a new member of the family or if you later need to rent it out to help with your mortgage. Steven advises buyers to look for ways you can add space and value – for example, loft conversions and side returns – if you intend to stay long-term. “This may not be work you want to undergo now, however, it’s great to have the option there should the need arise.”
  • Immediate location. “Make sure the property you buy is in an area you want to spend time in, near open green space, local shops for essentials and being within easy reach of a station are all key elements for me.”

But, it’s also important to be realistic, adds Philip: “Buying a property is a compromise, so be prepared that you won’t tick all your boxes.”

Once you’ve drawn up a shortlist, you can get a good idea of what properties are selling for in the area you’re looking at by using OnTheMarket.com’s quick online tool. And don’t forget to set up a property alert as we’ve got hundreds of thousands of properties for sale across the UK.

If you’re also considering buying a new build property, take a look at our guide on that very topic.

Top tips for viewings

Philip has some words of advice about viewings. He says: “When you’re a buyer, viewing a range of properties, it is often difficult to remember which one had what.” His top tips include:

  • View the properties you like in the order you like them from best to not-so-best and only view five in one day. Any more and you’re not focused on what’s important to you.
  • Before viewing, write down some key points on the brochures you will have downloaded and printed. The key points you’re noting should be relevant to what you want the property to have, or not have. That could be what the neighbours are like or the décor.
  • When you’re going round, put answers against your questions, and take your time. Don’t be rushed or intimidated by the agent. They want you to buy off them and spend gazillions of pounds, so make it count. A good agent will know the house inside out.

It’s also a good idea to visit a property a few times, and at different times of the day. You could take a friend or relative with you to get a second opinion. The government’s How to Buy guide has some good prompts to help you decide, and questions to ask. Which? also has a checklist for viewings.

Another consideration is a property’s Energy Performance Certificate (EPC), which provides a rating on energy efficiency and affects your energy bills. Read OnTheMarket.com’s article about this here.

Freehold, leasehold and listed

While on the house hunt, you might come across the two most common forms of property ownership in the UK – freehold and leasehold. It’s important to know the difference as there can be financial implications at stake later on, such as ground rent and service charges.

It’s also worth understanding what it means to buy a listed property – one that is officially registered and architecturally or historically important. Here’s some advice if you’re buying a listed building.

Putting in an offer

You want to make an offer on a property. Where do you start?

“When you are ready to make an offer, be sensible and not insulting,” says Philip Norgan. “The seller of the property is likely to consider you as a serious buyer if you go in slightly low, then make one, or two, jumps up to an acceptable level.” Philip says starting with a “derisory offer” is likely to aggravate the seller and the agent. He adds: “Whenever you’re making an offer, you set your stall out at making a maximum of three offers. Your initial, ‘test the market’ offer, then your ‘cards on the table’ offer and, finally, your ‘best and final’ offer.”

And how to best boost your chances of getting an offer accepted? Steven Morton at Acorn advises having your finance in place can be one good move. He says: “A copy of a valid agreement in principle from a lender can often make your offer more appealing to a seller – this is often overlooked.”

Steven’s other tips include:

  • Sell yourself. “If there is anything that you think may make your offer stand out, your agent needs to be aware.” That could include being chain-free, friends or family living on the road, having a large deposit, being in the catchment area for your child’s school and your plans for the property once you have moved in.
  • The more information you can provide the better. “This enables your agent to discuss your offer in-depth with the seller and could be the difference between your offer being accepted or rejected especially when competing with other offers. Every vendor likes a motivated buyer.”

Read more on making an offer in Scotland, and our tips on making a competitive offer if you’re a first-time buyer.

The agent will confirm in writing that your offer has been given the green light. Now it’s time to start the legal process of buying and, if you’re getting a mortgage, make your full application.

How you can work with an agent

The buying process can be a tricky one and so it’s good to help things go smoothly with the agent. Acorn’s Steven Morton advises:

  • Speak to your agent about how you would like to be contacted – this is often never discussed and is extremely important.
  • If you prefer to speak in person, give your agent more than one contact number for you i.e. landline and mobile.
  • If you have a busy work schedule and prefer to be contacted by email, make sure your agent is aware of this to avoid awkward update calls during your working day.

You can find a list of agents advertising properties at OnTheMarket.com here.

Engaging a solicitor

Once your offer is accepted, the conveyancing can begin. This is the process of transferring ownership of a property to the buyer, and is usually carried out by a conveyancer or solicitor. They draw up a contract that features details such as the agreed sale price, fixtures and fittings like furniture and carpets, and timings. If you’re selling a property too, the same solicitor can usually deal with the purchase. There will obviously be extra conveyancing costs.

Philip Norgan recommends looking for a solicitor as soon as you start looking for a property. “Find a reputable solicitor, check out their reviews and go and meet the person you will be dealing with,” he says.

Philip warns against using online conveyancers: “It will add four to six weeks onto the process.” He advises: “Cheap doesn’t equal saving because when you look at how much time you might spend, it could actually work out more expensive.”

Meanwhile, Steven Morton highlights the fact that some buyers may get nervous around making payments for mortgages and solicitors at this stage in case a sale falls through. He says: “There are some great products out there to combat this worry at the moment, one of which is Mover Protection.” This is a policy that means in the event of a sale falling through, providing it was no fault of their own, a buyer and seller can recoup costs.

You can read more about finding the right solicitor in OnTheMarket.com’s guide.

According to the MAS, legal fees for buying your home will cost around £850-£1,500, including VAT. A solicitor will also do ‘searches’, which can highlight any issues affecting the property. These will cost between £250 and £300.

Organising a survey

Your mortgage lender will organise their own valuation of the property to guide how much they will let you borrow. They may charge you a valuation fee for this, which could cost up to £1,500, according to the MAS. But it’s vital to organise your own survey, it says, “to help you avoid hidden costly problems in the long run.” A survey is essentially a check on the property for faults.

There are different types of survey, including a homebuyer’s report and a full structural survey. Here’s our guide to choosing the right one for you. The MAS estimates surveys at between £250 and £600 plus.

It’s a good idea to read the report carefully and get professional advice if there’s something you’re not sure of or don’t understand. If it throws up something that worries you, it might not be as bad as you think. Here’s our article about whether or not to go ahead with your purchase. And you can obviously think about negotiating on price.

Making the process go smoothly

Steven Morton has some advice on keeping your sale on track:

  • Always agree a timeframe at the start of your purchase. Make sure the agent and the seller are aware when you would like to collect your keys. This enables everyone involved to have a common goal. Transactions without firm agreed timeframes can often become open ended.
  • Ask your solicitor if they can report to you as the information comes in from the sellers. This means that you will be able to review and ask questions about the information received in real time rather than raising lots of questions at the end of the transaction which can often cause substantial delays while waiting for responses.

You’ll find more tips like these in our article on easing the house-buying process.

Exchange and completion

Exchanging contracts is the point at which the buyer and seller agree to the terms of the sale. Both parties sign copies of the contract and receive a copy. It is only now that the sale is legally binding.

Exchange is also when the deposit will need to be paid. If you’re selling a property, says the Citizen’s Advice Bureau, “it is usually possible to put the deposit on the property being sold towards the deposit on the property you are buying.”

This point is also when you’ll need the building’s insurance to start as you’ll be legally responsible for the property.

Completion is when the remainder of the money is transferred to the seller’s solicitor and the buyer gets the legal documents transferring ownership. On completion, the seller moves out and the buyer gets the keys. You’ll then need to pay your legal fees and tie up any loose ends such as organising utilities. The MAS estimates that removal fees could cost up to £600.

This article contains public sector information licensed under the Open Government Licence v3.0.