Buying a home is a huge financial commitment and often one of the largest purchases you’ll ever make in your life. It can be lengthy, complex, and feel daunting or stressful, especially if you’re a first-time buyer.

However, having the right information at the right time can ensure nothing takes you by surprise along the way. You’ll get to make informed decisions, making the process a lot easier and smoother.

Here are the steps to buying a house in the UK to ensure you know what to expect, the right questions to ask, your responsibilities and rights as a home buyer.

Determine Affordability

You first need to know how much you can afford to spend on the property purchase before looking for a house. Getting excited over the property of your dreams without knowledge of your affordability is pointless.

Most buyers will need to take out a mortgage to be able to purchase a home. The amount you can borrow can be 4.5, 5, or 6 times your income, and your credit score may influence the amount the lender is willing to advance.

You’ll need to know the maximum price of the property to know the deposit you need to save towards.

Save For A Mortgage Deposit

You’ll usually need to save up a deposit for your mortgage, depending on the lender’s loan to value (LTV) ratio, your credit, income, or if you’re looking for a residential or buy to let property.

The LTV is expressed as a percentage and refers to the mortgage to property value ratio. You can find mortgages worth up to 95% of the property value in the UK. Therefore, to qualify for a mortgage as a first-time buyer, you need to save at least 5% of the property value.

The standard for attractive mortgages and interest rates is a 20% deposit. Generally, the deal gets better every time you move up 5% in deposit size. The higher the deposit amount, the lower the mortgage loan and interest amount you’ll have to repay.

While saving for a mortgage, it’s recommended you aim for 5%, 10%, 15%, 20% milestones.

Why not visit or contact your local Ashtons branch?

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Get A Mortgage Decision In Principle

Also called a mortgage in principle (MIP), it’s a written statement from a lender estimating what you can afford to borrow. A decision in principle isn’t binding.

Decisions in principle from lenders don’t mean you have to take out a mortgage with them. It will help you get some indication of your budget by showing the interest and amount you’re likely to get.

Sellers and estate agents also take a mortgage in principle seriously. It shows them you’re serious about buying a property. You should remember that most lenders will carry out a credit search as part of the decision in principle.

Depending on the lender, the credit search can be a soft or hard enquiry. Soft enquiries don’t affect your credit score, but hard enquiries do. Too many hard enquiries can negatively affect your credit score, so it’s wise to know the type of enquiry the lender will use.

Choose A House

House hunting has the potential of being a fun or frustrating and time-consuming experience. You can easily start your UK property search through online property sites, mortgage brokers, lenders and local estate agents.

Criteria to consider as you browse properties includes:

House Location

Think about the feel of the area or region you want to live in. Is it a quiet or social or quiet space? Are amenities like shops, schools or hospitals available in the immediate neighbourhood?

Second Hand Or New Build House

New builds are usually more expensive than similar second-hand homes in what is known as the new-build premium. A new build will be clean and energy-efficient. Plus, you’ll get to make some decisions about fittings and fixtures like tiling, kitchen cabinets and lighting.

With second-hand homes, you get increased improvement opportunities, and you can tailor the house according to your preferences as you add value to the property.

The Energy Efficiency Of The House

You need to determine the property’s energy performance and whether anything is needed to improve it. This information is available in the Energy Performance Certificate (EPC) of the property.

Only specific properties like historic or national heritage buildings are exempt from providing EPCs.

Is The Property Freehold Or Leasehold?

It’s crucial to know if the property is freehold or leasehold as you consider a property purchase. With the freehold option, you’ll own the land and property outright.

With a leasehold option, you’ll only own the property for a fixed number of years. You’ll have the right to live on the property, but you must follow any rules in the lease terms.

Gather ID Documents

The law requires mortgage lenders, estate agents and lawyers to check your identity to prevent fraud and money laundering. You’ll have to produce documents that prove your identity, the information on your fund’s source or address at different steps of the process.

Checking such information is a legal requirement, and you’ll only slow down the process if you fail to provide ID documents. The documentation you need to gather early to ensure you’re prepared includes:

• Identity Proof- this can include a driving license, passport or an EEA member state ID card.
• Address Proof – can include utility bills like water or electricity not over three months old.
• Source Of Funds Proof- can include P60 forms from employers or payslips from the previous three months. If you’re self-employed, you can provide tax returns of bank statements.

Make An Offer

Making an offer on the chosen house is a big step, and you should never feel pressured to make an offer when you’re not ready. Consider viewing the property more than once to be sure it’s the right place for you.

Don’t let the asking price scare you from making lower offers to start the negotiation process. The agent is legally mandated to pass on all offers, but the seller isn’t obliged to accept any of them.

Final Thoughts

Always make your offer through the estate agent after you’ve determined your affordability, saved for a mortgage deposit and chosen a suitable house to buy. Remember, buying the property will not be your only expense. You may need to pay for stamp duty, valuation fees, solicitor fees and insurance fees.

If you’d like to find out more about how Ashtons can help you contact one of our branches for further information.