It may seem a cliché but there is much truth in the claim that housebuying is one of the most stressful life changes possible. But if you are ready to make the move, the following steps will get you on the way:
Work out how much can you afford
Before you begin, work out your budget. The final sum you can borrow will be decided on how much money you or you and your co-borrower (wife, husband, partner, relation, friend) have as a deposit, which will be payable before completion, and how much you earn. But bear in mind the additional costs of moving. These include -
- fees to mortgage lenders or broker
- land registry fee
- local authority search
- moving costs such as removals company
- stamp duty. This is taken on properties costing more than £125,000 and is at least 1% of the purchase price.
- survey fees
- utilities bills on your current home
- valuation fees
- VAT
If the sale falls through, you may have already paid for a mortgage company valuation of the property and possibly a survey. If a solicitor has started any legal work you may also have to pay for the work done.
Work out the running expenses of the property you wish to buy. These can include:-
- annual council tax bill
- ground rent, if the property is leasehold
- heating bills
- insurance costs, including life insurance, buildings and contents insurance.
- ground rent, if the property is leasehold
- service charges, if the property is a leasehold flat
- water rates (in England and Wales)
Find a property
You do not need to do all the legwork of going round to estate agents and registering your details. Simply visit our home search page.
Decide on a property
Most people visit a number of properties before they get a feel for what they want. Take your time and visit as much as you can, making sure to ask questions and looking closely for potential problems such as damp, condensation, subsidence and noise pollution.
Homes come in three main types:
- Freehold property - meaning the land on which the property is built is part of the sale and no ground rent or service charge is payable.
- Leasehold property -The land on which the property is built is not part of the sale. You have to pay ground rent to the owner of the land - who is called the freeholder. The lease length can vary and you should check that the length of the lease on the property you are interested in buying is acceptable to the mortgage lender. You also may have to pay an annual service charge, mostly for flats and covering items like maintenance and cleaning of common parts.
- Commonhold property - You can buy the freehold of a flat and own common parts of the building jointly with the owners of other flats in the building (known as a commonhold association). A ground rent or service charge is not payable but you may have to pay a share of the association’s expenditure.
Making an offer
If you think the property needs work, you can offer below the asking price. However, if you face competition you may end up paying over the asking price. If the property is being sold through an agent, you need to negotiate through them. A written offer should always be subject to contract so you are not committed to the purchase before finding out more about the state of the property.
When your offer for the property has been accepted you will have to get a mortgage. See our mortgages section.
Whoever agrees to lend the money will want to have the property valued to be sure they can get the loan back. You will have to pay for this valuation up front. You should consider having an independent survey carried out in addition to the valuation to examine the structure of the property and identify any problems.
There are two levels of survey that you can choose between:-
- a full structural survey. This is best suited to a property which is large, more than 80/90 years old or in doubtful condition;
- an intermediate or ‘house/flat buyers report’ that gives a report on the visible condition of the house and may recommend further investigations.
You can use the same surveyor who does the valuation to carry out the survey and this may be cheaper. However, you can use a different surveyor if you wish.
If the surveyor reports that there are some problems with the property, you will have to consider whether you still want to go ahead with the purchase or want to negotiate further with the seller about the price.
Choosing a conveyancer
Before making a choice as to who will do the legal work or conveyancing, find out the probable costs. Contact more than one solicitor or conveyancer and find out:
- if the figure quoted is a fixed fee or depends on the work involved
- if it includes stamp duty, search fees, land registration fees, expenses and VAT and get a breakdown of these costs
- what charges will be made if the sale falls through.
Some people opt to do the conveyancing themselves but most people opt to choose a solicitor who has experience of this work.
Walsall firm Enoch Evans says solicitors can ease the stress of moving, as it is the solicitor’s job to guide you through “the pitfalls of the process safely, quickly and efficiently”.
They say there is much to consider including road widening, access, your rights and obligations, local authority plans, listed buildings, tree preservation, and environmental issues, flooding, land contamination, even radon gas give cause for concern, as will subsidence and much else besides.
Enoch Evans also say a solicitor can establish who owns the boundary, who has rights of way over your property and what restrictions are in place on the use of your land.
You can use a licensed conveyancer to do your conveyancing. Licensed conveyancers are not solicitors but are licensed by the Council of Licensed Conveyancers.
Legal steps in the purchase
Few purchases are exactly the same process or length but some basic steps should apply to each one:
- The seller’s conveyancer draws up a contract which will eventually be signed by you and the seller.
- Meanwhile your conveyancer will check everything is in order on the legal side by doing the following:
- local searches. Enquiries to the local authority on matters affecting the property, such as a compulsory purchase order on the property or nearby developments planned.
- enquiries made to the seller about the property, boundaries, neighbour disputes and fixtures and fittings that will remain in the property. There may be additional questions on issues like the transfer of guarantees for work done on the house from the Land Registry.
- Arranging the deposit.Whilst the solicitor or, in England and Wales a licensed conveyancer is making the enquiries, you should sort out how you will pay the deposit that has to be made when the contracts are exchanged, usually at least 10% of the price of the home.
- Insuring the property. You should make sure buildings insurance is arranged from the date of exchange, when you will be responsible for the property.
- Exchange of contracts. Once all the above has been settled and your formal mortgage offer has been received, a completion date will be set and the final sale contract will be exchanged between conveyancers for your signature. If you drop out now, you will lose your deposit.You should make arrangements for the utility services to be sorted for your arrival.
- Completion. Usually about four weeks after exchange of contracts, it all gets finished at once:
- the mortgage lender releases the money
- the deeds to the property are handed over to your solicitor or licensed conveyancer
- the seller must hand over the keys and leave the property by an agreed time.
The solicitor or licensed conveyancer (in England and Wales only) will usually send their account to you on, or soon after, the completion date.
Once all that is done, the property will be yours and you have the small matter of moving your belongings and working out where everything will go in your new home.
See our removals section here. Or find your dream home here.
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