Buying property for the first time is exciting, but it can feel overwhelming. Don’t worry! We’ve put together a straightforward guide with seven easy steps. Follow these tips, and you’ll soon be holding the keys to your dream home.
Quick Tip: If you’re considering releasing equity—whether to help a family member buy their first home or to invest in another property yourself—it’s important to understand the options available. Learn more about how to release equity to buy another property and how it could help fund your first time buying property.
1. Get Clear on Your Budget
Before buying property, figure out how much you can comfortably afford. Look at your income, regular expenses, and any existing debts. Using an online mortgage calculator can give you a quick idea of your purchase price range, helping you avoid financial stress later. Consider additional costs like stamp duty, buildings insurance, and conveyancing fees to ensure you’re financially prepared.
Avoid This Mistake: Many buyers forget to factor in hidden costs like surveyor fees, solicitor charges, and moving costs. Make sure to budget for these!
2. Save a Healthy Deposit
A solid deposit is key when buying property. Aim to save at least 5% to 10% of the property’s value as a holding deposit—the more, the better. Having a larger deposit not only makes mortgage lenders more likely to approve your mortgage application but can also get you better interest rates and lower monthly repayments. A bigger deposit is especially helpful if you’re considering a new build property.
Quick Tip: First-time buyers in the UK may be eligible for a Lifetime ISA (LISA), which gives a government bonus on savings for a first home. This can give your deposit a helpful boost.
3. Understand Your Mortgage Options
Choosing the right mortgage is a crucial part of buying property. Fixed rate or variable rate? Repayment or interest-only? A fixed-rate mortgage gives you predictable repayments, while a variable rate might change over time. Repayment mortgages gradually pay off the loan, whereas interest-only means you only pay interest initially. First-time buyers should carefully compare their options and seek advice from a mortgage broker to find the best deal. Understanding the mortgage market can also help you decide which type of mortgage suits your financial situation, as interest rates fluctuate based on market conditions.
Common Pitfall: Don’t just go with the first mortgage offer you receive. Shop around or use a broker to compare deals and secure the best rate.
4. Get Your Mortgage Agreed in Principle
Before starting your property search, obtain a mortgage agreement in principle (AIP). This document shows estate agents and sellers that you’re a serious buyer. It also clearly outlines how much lenders are willing to loan you, which can help guide your property search and prevent disappointment later in the process. Once your mortgage application is approved, you’ll receive a formal mortgage offer confirming your loan details, which you’ll need before exchanging contracts.
What Happens Next? Once you have your AIP, you can confidently begin house hunting and making offers.
5. Research the Local Market
A well-informed buyer makes better decisions when buying property. Look into recent property sales in the area you like. Are house prices rising, stable, or falling? Checking this information helps ensure you’re paying the right price for your future home. If you’re considering leasehold property, look into lease terms and additional costs before committing. Looking at a home’s energy efficiency can also help you save on long-term running costs, especially with rising energy prices.
Checklist for Finding the Right Property:
- Compare recent sale prices in the area.
- Check transport links, schools, and local amenities.
- Ask about energy efficiency ratings and insulation.
- If buying leasehold, review the service charges and lease length.
6. Choose the Right Professionals
You’re not alone in this journey. Hiring an experienced conveyancer or solicitor to handle the legal process can save you time and stress. They’ll carry out essential property searches, manage paperwork, and handle contracts, ensuring everything is legally binding before you exchange contracts. Working with a removals company can also make your completion date run smoothly, ensuring your moving day is as stress-free as possible.
Did You Know? Some conveyancers offer a “no completion, no fee” service, which protects you financially if the sale falls through.
7. Make Your Offer and Secure Your Dream Home
Buying property is an exciting milestone, and once you’ve found the perfect place, it’s time to make an offer. Be realistic but prepared to negotiate. If your offer gets accepted, your solicitor will handle the next steps. Soon enough, you’ll be signing the final paperwork and preparing to move into your new property. Buying a home isn’t just about finding a place to live—it’s also a long-term investment that can grow in value over time.
Negotiation Tip: If the property needs work, you may be able to negotiate a lower price based on survey results.
Ready, Set, Homeowner!
Buying property doesn’t have to be complicated. Follow these steps, ask plenty of questions, and rely on professionals to help you navigate the process. Before you know it, you’ll be settling comfortably into your dream home. Happy home hunting!
