The ultimate first-time buyer guide
Are you ready to buy a house or flat for the first time? Read PrimeLocation’s ultimate first-time buyer guide before you take the plunge.
Making the jump to buy a house or flat for the first time? This ultimate guide is all you'll need.
- Save a deposit
- Get a mortgage
- Search for and select your home
- Property specifications
- View a property
- Make an offer and negotiate
- Other expenses to keep in mind
- Legal process
- Exchange and completion
First off, consider this question very carefully: is buying your best option? Could you be better off renting for a longer period of time before committing to owning property? Consider all the advantages and disadvantages of buying property:
- Avoiding paying 'dead' rent money
- Increasing the value of your property over time and eventually making a profit in the re-sale
- No longer having to deal with landlords
- Having the option of keeping your mortgage repayments at a fixed rate year after year (while rent will often increase annually)
- Paying for unexpected repairs and maintenance, as opposed to your landlord dealing with them
- Affordability: if you can't keep up your mortgage repayments your home will be repossessed
- If the answer to the big home buying question is still a resounding yes, then read on
There are some fairly obvious benefits to having a sizeable deposit when you are a first-time home buyer. It will make it that much easier for you to get a mortgage. Another advantage is that you will immediately have equity in your property. The bigger your deposit, the more protected you are in the event of your property dropping in value. The property would have to experience a drop in value the size of your entire deposit before you were in negative equity.
The first step to saving a deposit for your home is to write yourself a budget. The second step, and the one that will no doubt prove the more difficult, is sticking to that budget.
To help you do this, you might want to ask yourself:
- Could I reduce my leisure expenses by eating and drinking more at home?
- Can I pay off any credit cards?
- Can I close off any monthly expenses such as gym membership that I never use?
As well as allowing you to save more money for your deposit, reducing your monthly outgoings will also boost your affordability when it comes to getting a mortgage. This is because lenders calculate what you can borrow on your monthly salary minus your expenses.
There are a range of different mortgages available, which could come with a fixed or variable rate that applies over a given period of time. Being new to the game, it could be a good idea to seek out an independent mortgage broker for some advice, although bear in mind some may charge.
You can also see what's available by shopping around at a comparison website such as uSwitch.
You will need to provide personal details, including proof of income, payslips and household bills, to support your mortgage application.
You will be able to get a mortgage with a deposit of between 5% and 10% of the property value but the cheapest deals will be reserved for those with the biggest deposits.
You can search hundreds of thousands of properties on PrimeLocation. Set up a property alert to make sure that you are the first to know when new houses and flats that fit your requirements hit the market.
Also, register your interest with estate agents, and spend time searching the property pages of local newspapers and magazines to see the types of homes available and house prices in the area you're looking to buy.
When it comes to where to buy your home, consider the following: how critical is the location relative to local schools, the hospital, commuting distance to your work, accessibility to public transport and closeness to family and friends? Think about what's going to be most important to you in an area: a low crime rate? Proximity to pubs, restaurants and entertainment?
Draw up a list of your priorities. You can find more information on neighbourhoods by clicking on the ‘Map & nearby’, ‘Street view’, and ‘Local info’ tabs on properties listed on PrimeLocation.
- Detached or semi-detached?
- Freehold (you own the house and land) or leasehold (you have exclusive possession for a specific period, but not ownership)?
- New build house or flat or an existing property?
- How many bedrooms do you need?
- How many bathrooms?
- How big do the rooms need to be?
- Do you need off-street parking?
- Are the windows double glazed?
Before you start on your property search, get your criteria in order. If it's absolutely essential that you have a private garden, don't waste your time looking at third floor flats, for example. And if low maintenance is top of the agenda, give listed or historical homes a wide berth.
On the other hand however, it pays to keep an open mind and be flexible. Remember, your first home does not have to be your dream home. Try to strike a balance between knowing what you want and being open to compromise. Expect your priorities and criteria to clarify as you view more properties.
You can find more information about the specifications of the house or flat you are interested in by clicking on the ‘Floorplan’ tab on each property listing on PrimeLocation.
It's a good idea to arrive early to your viewing. It will give you an opportunity to explore the local area, chat to neighbours and identify any potential problems. You will also be able to have a good look at the house or flat in peace and quiet.
When viewing a property, especially one that you fall in love with on first sight, it can be easy to forget to ask the important questions. Take an experienced buyer with you - one or both of your parents or a friend who has already bought a house.
When you make an offer on a property, keep in mind that you should treat the asking price as a guide. The seller is probably not expecting you to match their asking price, but be prepared for them to counter your offer.
Deciding on an opening offer can be tricky business. Too low and you risk alienating the seller or being outbid. Too high and you could end up paying too much for the property. Firstly you should determine the maximum amount you are willing to offer, and then consider how low you'd like to start your offer on the property.
To determine this amount, it would be helpful to glean as much information as you can about the sellers, the house itself and the prices other homes in the area have sold for.
Some important questions to ask your estate agent include:
- How long has the property been on the market?
- Have any offers been made? If so, why were they withdrawn or not accepted? If not, why not?
- Why are the owners selling?
- Have they bought another property yet?
- When are they looking to move?
- What is and isn't included in the property?
The answers to these questions could potentially give you some leverage in the negotiation process.
Also consider your own selling points as a buyer. As a first-time home buyer you have no property to sell, and so presumably you're able to move quickly. This will be looked upon favourably by any seller who has already purchased another property or is in the process of doing so.
Do you already have a mortgage offer on the table? If so, the fact that you can progress as soon as your offer on the property is accepted is definitely a plus.
The price of your home isn't the only cost involved in buying it. There are a variety of related immediate and ongoing costs. They can add an extra 15% onto the cost of your new property – and more if you plan to undertake significant development or redecoration, according to the HomeOwners Alliance.
You need to think about:
- Mortgage arrangement and valuation fees
- Building and home insurance
- Stamp Duty
- Moving costs
- Solicitor's fees
- Survey cost
A lot of buyers, especially first-time home buyers, go over budget on the purchase of their house simply because they haven't factored in Stamp Duty - a tax levied by the Government on the transfer of properties.
Once you've found the home you wish to buy, you'll most likely need to hire a chartered surveyor to check that the building is structurally sound and that it's worth the money you're investing in it.
Your mortgage provider will conduct their own valuation, and it can be tempting not to bother engaging your own surveyor - they are, after all, expensive. However, it's strongly advisable to really consider having your own independent and more detailed survey carried out. In the long run, you will have greater peace of mind knowing that any major faults in the property have been uncovered.
Again, it can be tempting to cut out the cost of a property solicitor and manage this part of the buying process yourself. This is very risky, especially for first-time home buyers. It's highly advisable to engage the services of a conveyancer, who will handle numerous tasks including drawing up and explaining contracts, dealing with the Land Registry and searches, paying the Stamp Duty and all other parts of the conveyancing process.
Once your offer has been accepted, request that the seller takes the home off the market. If they are serious about selling the property to you, they should oblige - and it will stop other potential buyers from putting in an offer to rival yours.
At this stage, you should have everything lined up, including:
- Mortgage valuation and surveys
- Building insurance
- Date for completion
On completion day, you can pick up the keys to your new home. It's time to pop the cork.
- How to buy a house
- Guide to buying property with friends
- Guide to choosing the best mortgages
- Viewing property - helpful hints
- Guide to choosing home insurance
- How does the Government's scrapping of HIPs impact you?
- Guide to choosing a surveyor
- What your property surveyor will do
- Guide to choosing a property solicitor (conveyancer)
- What your property solicitor will do
Some information contained herein may have changed since it was first published. PrimeLocation strongly advises you to seek current legal and/or financial advice from a qualified professional.