The process when buying a house is one of the most stressful experiences you can go through during your life, but it becomes all the more daunting if you have never done it before.
An estimated 86% of people in the UK want to own their own home, but knowing where to start can be a challenge, with so much to consider and do before even finding your dream home, it can be easy to feel overwhelmed.
Our first time buyer guide is here to talk you through the process of buying a new house including our checklist for buying a house and how to get your foot on the property ladder.
Looking for a quick answer? Check out the drop-down menu below!
- Timeline Of Buying A New House
- What Is A Decision In Principle?
- How Much Of A Deposit Do I Need To Buy A Home?
- First Time Buyer Guide
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Timeline Of Buying A New House
When it comes to the process when buying a house, there are many factors you will need to consider such as:
- How long it will take you to find a property you want to buy
- The length of the housing chain that you enter into
- How complex the conveyancing process is
- Any other bumps that may slow the process down, such as sellers pulling out, any surprises uncovered in the survey, etc
Whilst everyone’s journey is different, it can be useful to have an idea of roughly how long the whole process takes.
Below is a rough outline of how long it can take to complete the house-buying process.
| Step | Approximately How Long |
| Preparation | If you already have a deposit saved up, then depending on which lender you go through you can get a mortgage in principle in as little as 24 hours. |
| Finding a property and having an offer accepted | If you are lucky then you may be able to find a property within several weeks though this process can take several months. |
| Working towards exchange of contracts | This can take anywhere between one and three months. |
| Exchange to completion | This period may be longer or shorter, but as a rule of thumb, contracts are usually exchanged around two weeks before completion. |
| Post-completion | About two weeks to fulfil other obligations, for example, stamp duty. |
| Total: | A one month minimum but many home purchases take longer. |
What Is A Decision In Principle?
A decision in principle is a crucial step in the process when buying a house. A decision in principle, also known as a mortgage in principle and as an application in principle, is a way to find out roughly how much you can borrow from your lender, bank, or building society for a mortgage.
When you apply for a decision in principle it does not affect your credit score. As it is different from a mortgage application, a mortgage lender will not run a full credit check. Instead, they will ask credit reference agencies to confirm whether certain details you enter on the decision in principle form are correct.
A decision in principle does not guarantee that you will get a mortgage, but it will give you a rough idea as to how much you would be able to borrow.
How Much Of A Deposit Do I Need To Buy A Home?
When it comes to the process of buying a new house, you will need a deposit of at least 5% of the cost of the property that you would like to buy but the majority of banks want first time buyers to have a deposit of 10%. The size of your deposit affects the house buying process massively, as the larger the deposit you have, the more likely you are to have lower interest rates and lower monthly repayments.
First Time Buyer Guide
Think you are ready to start the process? Our first time buyer guide has your back to help take the stress out of what should be an exciting time!
1.The Foundations For Buying A Home
In order to buy your first home, you need to sort out how you are going to pay for it. For a first-time buyer, this will mean saving up for a deposit. As we have previously mentioned, mortgage lenders are typically looking for a deposit ranging from anywhere from 5% to 10% of the cost of the property you wish to buy.
If you are not a first time buyer, then you will need to decide whether you are going to sell your current property first, or sell it whilst you are buying.
Mortgage In Principle
You will need to work out the maximum amount that you are going to be able to afford. This will depend upon the amount you are able to borrow and the size of your deposit. Whilst you won’t be able to have a concrete answer on how much you will be able to borrow, a mortgage in principle will give you an idea.
What Is Your Budget?
As we have already discussed, a mortgage in principle is not binding, but it will help you on your house-buying journey. It might seem early, but by securing a mortgage in application you will stand the best chance of finding a house within your budget.
Whilst a mortgage in application is not a guarantee, estate agents and sellers take them seriously. Therefore, any offer that you make will be treated as a serious offer. Offers made by those who do not have a mortgage in principle will not be taken as seriously.
Choose A Conveyancer
Whilst you do not need a conveyancer until you have actually put an offer on a house, it is a wise idea to have a few options lined up so when the time comes you are ready to go.
Mortgage lenders have a panel of conveyancers that they are prepared to work with and only a few solicitor firms on that list. If you have already decided which lender you are going to use, then make sure to line up a conveyancer who is a part of that panel.
If you are still undecided about which lender you’re going to use, then it is a good idea to line up a few different solicitors who are on different lender’s panels.
2.House Hunting
Now that you have gotten your foundations sorted, it is time to get into the fun part of buying a house, the house hunting! Whilst this is the part of the process that is the most enjoyable, it can also be very time-consuming and infuriating at times. Patience is a virtue in the house hunting game as you can expect to fall in love with houses, only to lose out to another buyer and to view plenty of homes that do not live up to expectations.
Location
Before you start the house-buying process, you should have an idea in mind of where you want to live. If you don’t, not to worry, now is the time to start thinking about it. When it comes to buying a house, location is a huge part of what you are paying for, so it is worth giving some thought to what kind of benefits and amenities are important to you.
If you have children, one such benefit to consider is school catchment areas. Will your child be more or less likely to get into the school you want based on where you live? Another benefit to consider is how well connected is the area. Are there good transport links nearby? This is especially important if you do not drive. Areas with these amenities are usually well sought after so you may have to pay more in order to get what you want.
Viewings
Whilst getting a viewing for the property of your dreams may sound simple on paper, the truth is that it can often be quite a difficult task, especially if the property is in an area with a lot of demand for housing.
If you can, you should always try and arrange a viewing in person. Viewing a property in person means that you will have the advantage of seeing the property for yourself whilst being able to ask any questions you may have to the current owner.
Things to be wary of whilst viewing houses are damp and subsidence as they are often an indication of structural issues that will be an expensive fix and will devalue your home considerably. If the property you are viewing is older, then any kind of structural work or renovations will more than likely end up incurring more work and costs.
3.Making an offer
Once you have found your dream home, you are ready to make an offer. As a rule of thumb, you should make your offer through the estate agent. The only time you should make an offer to the seller is in the rare circumstance where the seller is selling the home by themselves. You should aim to offer the lowest amount that will secure the property for you.
Haggling will usually play a part in this step, so it is always a wise idea to go in with an offer that is lower than what you can afford. This way if the seller declines you can come back with a higher figure without breaking the bank and eventually you should be able to meet in the middle with a house offer.
It is important to keep in mind that other buyers will also be bidding for the property so you will have to find a way to compete with them. You can do this by being prepared to move quickly or by offering more money if you are in a position to do so.
If You Are Successful
It is important to not get carried away if your offer is accepted as there is still room for the sale to fall through. Gazumping is a real issue in the property market, especially at the moment whilst the property market is weakening. There is sadly no defence against gazumping, there are only steps that you can take to try and lower the chances of it happening. You can ask that once the offer is accepted the house is taken off the market and to try and keep the sale moving along as quickly as possible.
Stamp Duty
Now you have had your offer accepted it is time to start thinking about how much stamp duty tax you will need to pay and to make sure you have the funds available. Stamp duty will be reduced or even zero, if you are a first time buyer and the property sells for under £500,000. If the property is more expensive or you aren’t a first time buyer then you will have to pay the standard rate.
4. Securing Your Mortgage
The next step in the house buying process is to apply for a mortgage. There are a couple of ways you can do this, either through a lender or through a mortgage broker. Using a mortgage broker will increase your chances of being accepted the first time as well as giving you access to a greater choice of deals. They are a great choice for first time buyers as they will walk you through the process and answer any questions that you may have.
How Long Is A Mortgage Application?
Usually taking around three weeks but sometimes longer, a mortgage application process should be quicker if you use a mortgage broker and already have a mortgage in principle in place. There are plenty of first time buyer mortgages available so going through a mortgage lender will help you to make sure you are getting the best deal possible.
Valuation
A key part of the mortgage application is the valuation. A valuation is when your lender will inspect the property you intend to buy in order to make sure that is it a real property and that it is worth the amount that you are going to be paying for it.
Unlike a property survey, a valuation survey will not pick up any potential problems with the property.
Approval
Once you have received formal confirmation of your mortgage application it is critical that you check the documents you are sent carefully in order to make sure all of the details are correct. If you are unsure, your mortgage broker will be able to go over it with you.
5. Instructing Your Conveyancer
The next step in our first time buyer guide is to instruct your conveyancer. You should typically start instructing your conveyancer at the same time as you apply for your mortgage application. As mentioned previously it is important to make sure your conveyancer is approved by your lender.
What Does A Conveyancing Solicitor Do?
A conveyancing solicitor’s role is to ensure that the purchase of the property is completely legal so that when the property is transferred into your name no one will be able to challenge the ownership of it. As part of this role, they will have you sign all of the necessary paperwork as well as taking care of the money transfers required for the purchase itself.
Another task your conveyancing solicitor will undertake for you is to conduct a property search. These are a survey of the property that allows you to fully understand the property you are buying such as whether it is leasehold or freehold, the conditions of ownership, and where the boundaries are amongst other details.
How Much Does It Cost?
Below is a graph that indicates the typical conveyancing costs (including VAT) in the UK, based on a property that is worth £350,000.
| Buying | Selling | |
| Conveyancing Fee | £1,100 | £660 |
| Local Searches | £300 | n/a |
| Total: | £1,400 | £660 |
| Total If Buying And Selling: | £2,060 | £2,060 |
It is always a good idea to ask your solicitor how they calculate their fee as conveyancing fees may be fixed or they may depend on the value of the property.
6. Survey
Getting your surveyor to check your property is a key part of the process when buying a house. The only time you may not need a property survey is if you are purchasing a new build, but even then, it is better to be safe than to be sorry. The cost of a survey pales in comparison to the problems it can save you from further down the road.
There are four different types of surveys that you can pay for, which all go into various degrees of depth.
What Do I Do If The Survey Indicates A Problem?
If the survey reveals any problems which could be a costly fix, then don’t panic. As long as it has not revealed anything that is too damning, you will be able to renegotiate the price with the seller. If everything goes well, you may be able to have a couple of thousand pounds knocked off the price. This would be able to recover the cost of the survey.
7. Insurance
One of the most important parts of the process when buying a house is sorting out building’s insurance. This insurance will cover you in the event that your property is destroyed. It is something that your lender will insist that you purchase but you do not have to buy it through them.
You can shop around for building insurance,but it is vital that you make sure that the cover starts from the day you exchange contracts.
Another insurance that your lender will insist on is life insurance. Whilst it is a good insurance to take out it is not a necessity. It will mean that should one of the mortgage payers die, the mortgage will be paid in full so that your family may stay in their home.
8. Agree A Completion Day
Completion day is the day when ownership of the property you are purchasing transfers over to you. It has what everything has been leading up to and is the day you have been waiting for.
Both you and the seller will need to agree on what day completion day will be in advance. It can be difficult to sort out, especially if one or both parties are in a chain. Every buyer/seller involved in the property chain will have to complete their sales on the same day, so there will be a lot of different people’s schedules to consider.
9. Exchange Deposit Money
When the time comes to exchange the contracts, the buyer must take a deposit of the total property price and use a CHAPS payment to send the money to the solicitor. This is called an exchange deposit. The size of this deposit can vary from property to property, but it is usually 10%. This money is not the same as the mortgage deposit although your deposit is usually formed as part of your mortgage deposit.
Do I Need An Exchange Deposit If I Am Selling My Current Home?
This does not apply for first time buyers but it is worth noting that if you are selling a property at the same time you are buying one, then you won’t normally need to find the cash for an exchange deposit. The money you will use for this will come from your buyer. One issue you may find is that your buyer’s exchange deposit is not enough to cover that 10% of the property that you are buying.
What If My Mortgage Deposit Is Less Than 10%?
Another issue that you may find is that if you are buying a property with a high LTV ratio and your mortgage deposit is less than 10%, then you may have to find the cash to cover this exchange deposit unless you can negotiate a lower deposit with the seller. If both of these options are unfruitful, you may be able to take out a short-term loan.
10. Sign And Exchange Contracts
Signing and exchanging of contracts usually take place shortly before the agreed completion date. It is common for people to exchange around a week or two before the completion date, though it can be done in the same day. Signing and completing on the same day can be risky though, so it is best to only use this as an option in an emergency.
Once your solicitor has given you your contract to sign you can then exchange. Once you have signed the contracts your solicitor will transfer the deposit money to the seller’s solicitor.
Once the contracts have been exchanged there is no backing out of the sale without incurring serious consequences. If you as the buyer back out, you will lose your deposit and if the seller backs out then they will be liable for the costs you have paid.
Completion Statement
After exchanging the contracts, your solicitor will give you a final document with the details of what you owe that will need to be paid either before or on completion day. Included in these costs will be your solicitors’ fees.
Sign The Transfer Deed
The transfer deed, which confirms that the property belongs to you, may also need to be signed.
11. Completion Day
Before completion day rolls around, your solicitor will contact your mortgage lender to get the money released. Your solicitor will then send this money to the seller’s solicitor, along with the remainder of your exchange deposit. In exchange, the solicitor will be given the title deeds to the property along with proof that the seller’s mortgage has been paid off. Completion day is often also moving day, but they sometimes occur on separate days.
Stamp Duty
If you are required to pay stamp duty, then you must settle this bill within 14 days of completion through your solicitor. Usually, your solicitor will request this money before the completion day.
Register Ownership
One of the last parts of the house buying process is to register your ownership of the property with the Land Registry. This is another task that will be undertaken by your solicitor and the fee is usually around £200 to £300. Once this has happened the title deeds are transferred to your mortgage lender.
Congratulations! The property is now legally yours!
12. Moving Day
The big day is here! All of the stress, house viewings, and surveys have all boiled down to this day! There is one final step left, at that is to move!
It is a good idea to familiarise yourself with what will happen on moving day before it rolls around. The first is that you are more than likely involved in a chain, and each purchase in the chain is reliant on the other in order for the sale to progress. The first time buyers purchase will happen first as they are chain free, and then the money from the last purchase moves up the chain to fund the next purchase, and so on. If you are the last one in the chain then you may result in a longer wait time to receive your keys.
It is worth keeping that in mind for when you are instructing your removal company.
Whilst moving day can be stressful, it is important to enjoy it as everything has led up to this day!
This covers our first time buyer guide and everything you need to know about the process when buying a house. If you have any questions, queries or insight into the topic, please feel free to get in touch!
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Alexandra is a junior content producer who enjoys writing articles and finding out more about the property market. Read more about Alexandra here.
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