But even if you are not a first-timer it’s easy to forget the dos and don’ts from the last time you bought a house. We look at 10 tips everyone should keep in mind.
1. Get your mortgage agreed first
Post credit crunch, borrowing from banks and building societies is not a given. So whether you are a first-time buyer or are moving up the housing ladder, check you can get the mortgage you need before starting the process.
If you are buying your first home get a mortgage agreement in principle secured first. This is a document from a lender which states that it will lend the agreed amount, based on the information you have provided. Bear in mind, though, this is an indication and not a legal agreement.
If you are a current homeowner and need to increase your mortgage to move – or even if you don’t want to move but just want to raise funds – be aware that the lender will reassess you as if you were applying for the borrowing for the first time.
If your circumstances have changed – for example, one of you has stopped working or become self-employed – it’s a good idea to speak to an independent mortgage advisor first. Our mortgage partner, London & Country offers fee-free independent advice on 0844 209 8725.
Do your own homework too by comparing deals requiring various deposits at MoneySupermarket’s mortgage channel.
2. Research the area thoroughly
Make sure you investigate where you are buying thoroughly. With property websites such as Upmystreet.co.uk, you can research into anything from crime levels to school results, simply by punching in the postcode.
But researching from behind a computer screen doesn’t compare to visiting the street and general area in person.
Make sure you do this at different times of the day and week. For example, what’s the traffic like when the schools turn out? Does the town centre turn into a no-go area past 8pm on a Saturday? How reliable is the train service if you are a daily commuter?
3. Think carefully about your offer price
On the face of it, the housing market is pretty static at the moment. The latest data from The Office for National Statistics (ONS) for example, shows that average prices increased by 0.2% in February and by 0.3% in the last 12 months. However this is only on a national basis.There is a raft of individual micro-markets throughout the country and even adjacent streets differ in value, so research accordingly.
At Zoopla.co.uk you can find what price an individual home last sold for and on what date, as well as get an estimated current value based on a cross section of house price indices. Add this to any advice you receive from estate agents when it comes to settling on an initial offer price.
4. Hold your nerve
Give yourself a little room for manoeuvre if your initial offer is rejected – but don’t go over and above the maximum price you had originally set in your mind. Holding your nerve could save you thousands, especially if there are not many other potential buyers in the offing. And, if you lose the house and had reached your cap, you couldn’t afford it anyway.
5. Don’t be satisfied with the mortgage lender’s valuation
A lender’s valuation is just that – an assessment carried out by the lender to check that the property presents adequate security for its loan (although you will pay for it). To look for actual faults in the property, you will need to commission your own independent survey.
On most homes, a Home Buyer’s Report, which will expose problems such as damp, dry rot and subsidence, is adequate. But if you are buying an older or unusual home a full structural survey is probably a better idea.
6. Get to grips with leasehold
The complex and archaic rules surrounding leasehold property can really put your head in a spin. If you are buying a home within a shared block and feel out of your depth on leasehold issues such as covenants (rules of the lease), call the Leasehold Advisory Service on 020 7383 9800.
As a government-funded public body, this service provides consumers with free and impartial advice on the law relating to residential leasehold property in England and Wales.
7. Fix the cost of your legal work upfront
Buying a home is usually the most expensive purchase of anybody’s life – but even with that in mind, it’s still probably going to cost you more than you thought. This is especially the case when it comes to legal work which can be unfamiliar and without a finite end date.
However, some solicitors and property lawyers offer fixed fees for home-buying costs, so it could pay to shop around for one that does. Visit the Law Society for more details.
8. Know your Stamp Duty thresholds
Stamp Duty is a cost that’s less opaque than legal fees – but it’s also probably the biggest. Brace yourself by getting familiar with the thresholds.
The main point to note is that the land tax now kicks in at 1% on all homes over £125,000 for all buyers. The government’s concession for first-timers on property between this threshold and up £250,000 expired in March.
See our article for how to claw back the potential £2,500 lost in Stamp Duty. Note also that, unfortunately, this is a flat-rate tax so the percentage you see is the percentage you pay on the entire cost.
9. Get covered with buildings insurance from the date of exchange
Remember that you are legally responsible for the structure of the property from the point you exchange contracts, not the point of completion. In this case it’s crucial you get buildings cover in place from this date. In terms of contents insurance, it makes sense to get cover before you move in.
Call your insurer and find out how its cover applies for goods outside the home so that you know you’ve got protection while you’re moving. Your moving company should have insurance to protect your belongings, but it’s likely you will move at least some items yourself.
10. Don’t despair if you can’t afford it this time
As far as the experts are concerned, house prices are not going to do much this year, a subject you can read more about in our article, ‘What’s in store for house prices’.
We asked a panel of experts for their forecasts on house price movement this year and beyond – and the general consensus is that, if you can’t quite afford to buy a house this year, you might be in with a shout next year as prices will not be that different to where they are today.
In the meantime, saving as much cash as possible will put you firmly on the starting blocks for next time.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.