Buying a Home

Single house

Buying a home is the biggest purchase of your life, so it’s no wonder that it can feel stressful, particularly if you’re a first-time buyer and have no clue what steps are involved. Or maybe it’s a while since you last moved house and you need a refresher.

This article covers all you need to know about the process, from sorting your finances to finding a place and negotiating offers. We explain the jargon and share helpful tips from recent homebuyers, including things they wish they had known at the outset:


Sort your finances before you start house-hunting
Work out your budget; deposit & mortgage

Finding your ideal home

Making an offer

Offer accepted? Next steps
Conveyancing solicitor, mortgage, survey, home insurance

Exchange contracts



Sort Your Finances (before you start house-hunting)

Orange spotty pig

1.  Work out your budget

Know what funds you have available for a deposit. The minimum deposit is normally 5-10% of the property’s value, but the bigger the deposit you can put down, the cheaper the mortgage rates you’ll be offered (because you pose a lower risk to a lender).
Work out what you can afford to spend on monthly mortgage payments. Mortgages are a long-term financial commitment, so do consider any potential changes in your financial situation, and don’t overstretch yourself.
You will also need to budget for additional fees and costs such as:

  • Stamp Duty (or Transaction Tax in Scotland and Wales). This land tax can be a hefty payment, depending on the value of the property.
  • Legal fees and mortgage arrangement fees
  • Survey
  • Home insurance
  • Removal costs
  • Kitting out your new home



What is Stamp Duty?

Stamp Duty land tax (or Transaction Tax in Scotland and Wales) is a lump-sum tax paid when you purchase a property or land, costing above a set amount. The tax rate depends on the price and type of property, where it is in the UK, and whether you’re a first-time buyer.

See current rates and details


Look into the government schemes to make buying a home more affordable e.g. help to buy loans, shared ownership (part buy, part rent) and the Lifetime ISA to help first time buyers save for a deposit.

2. Check your credit rating

Check your credit score and correct any errors before you apply for a mortgage. Your rating determines how much of a risk you represent to lenders and will influence how much they are willing to lend you and what interest rate they will charge.


3. Research mortgage options

Types of borrowing - money handover - wb
Taking on a mortgage is a major financial decision and it is a highly competitive market with plenty of different providers, rates and products, so it is important to do your research and get good advice. Lenders or brokers will assess what monthly mortgage repayments you can afford, by looking at your earnings, regular spending and debt repayments (including student loan, overdraft, credit cards etc.). They will also help determine what type of mortgage would suit your needs.


Key mortgage decisions to think about

Repayment mortgage or interest-only?
With a repayment mortgage, your monthly payments cover the interest on your mortgage and some of the loan itself – so it means you will pay off the mortgage by the end of the term.
Interest-only means you only pay off the interest on your mortgage, so your monthly payments will be much lower. But you still need to pay back the full loan at the end of the mortgage term, in one lump sum.
Fixed or variable interest rate?
Fixed rate can offer peace of mind, because your monthly payments won’t increase if interest rates rise, but neither will you reap the benefits if they fall.
Variable means your monthly payments will fluctuate in line with changes in interest rates.



Loan-to-value (LTV)

LTV is a financial term used by lenders to show the ratio of mortgage to property value e.g. if you are buying a £400,000 property and putting down a £40,000 (10%) deposit, you will need a 90% LTV mortgage. A high LTV is generally a greater risk for the mortgage provider, so the loan is likely to have a higher interest rate.


Basic Mortgage Calculator – Money Saving Expert
Use this calculator to work out monthly repayments & the total cost over the life of a mortgage, including fees & interest.  There’s also a link to compare mortgage deals.


Find out more about mortgages:

Mortgages: A Beginners Guide – Money Advice Service/MoneyHelper

Mortgage Guide – Money Saving Expert


4. Get yourself in the best position – be a proceedable buyer

‘Proceedable’ means that you’re ready to buy, which is appealing to a seller, particularly if they want a speedy sale.
For a seller, a first-time buyer is attractive because there’s no chain – you don’t need to sell before you can move. But to be an attractive buyer in the best position, have a conveyancing solicitor lined up and be able to demonstrate ‘proof of funds’ to buy the property: this means getting a mortgage agreement in principle (i.e. a statement of what your mortgage provider is prepared to lend you) plus a bank statement showing the source of your deposit.
Having your finances in place shows that you’re a serious buyer who will be able to act quickly once a sale is agreed, giving you a strong negotiating position once you find the property you love.

Finding Your Ideal Home

Where to search - house & magnifying glass (white background)Finances in order, let the fun begin… house hunting!
Start by browsing online e.g. Rightmove , Zoopla , OnTheMarket.

Also register with local estate agents so they know what you are looking for you and can alert you as soon as they have suitable properties. It’s a good idea to downplay what you’re willing to spend, as agents will often try to tempt you with properties a bit above your limit (plus it can help with negotiations later).

Research the area

Do your homework and have a good look around the area. Check out the transport links, your commute to work, shops, amenities and social life. Also look into potential issues such as flood zones, crime rate, flight paths and any local plans for infrastructure and development, which may improve services or impact traffic and pollution etc.
Locality - Things to check

Viewing properties

Under consumer protection regulations, sellers (and their agents) must disclose information about a property which could influence a buyer’s decision. They should complete a Property Information Form relating to categories such as environmental matters, alterations to the property, utilities and services.  But it is recommended that you still make your own independent enquiries. Also, Estate Agents are legally bound to tell the truth, so make sure you ask them pertinent questions.

Questions to ask

Find out about the seller’s situation, as it could affect your negotiating position:

  • How long has the property been on the market?
    If it’s a long time, ask why: it could indicate a problem, or it may just be overpriced.

  • Has there been much interest? What offers have they had so far? What is the minimum they would accept? (The agent might not be willing to divulge this information  but it’s worth asking).

  • Why are the owners selling? Is there a chain? Do they already have somewhere to move into?
    If you know they are in a hurry to sell, they might accept a lower offer.

  • How long have the owners lived there?
    If the property has changed hands frequently, you need to find out why.

Are there any negative issues with the house or area to be aware of?
E.g. structural problems, pests, violent death, high crime level, flood risk, plans for nearby development, potential hazards or nuisance factors such as smells, pollution, pylons etc.
What are the neighbours like?  (And will that suit your lifestyle?) Have there been any problems?
Think about the running costs:  What is the energy efficiency rating? Is there double glazing? How old is the property? How much is the council tax and utility bills?

Things to check

General condition: Is the property well-maintained?
Check the exterior for missing roof tiles, leaking pipes etc.
Inside, look out for cracks and signs of damp. Try the taps to test the water pressure. What fixtures and fittings are they leaving?Extra-double-house-teal & yellow png
Parking: Is there adequate parking – on the property, a car park or permits?
Communal areas e.g. garden, entrance hall or stairs in flats: who is responsible for maintaining any shared areas?
Security: How safe does the area feel?  What is next to the building?  If it’s public land or a footpath, how well protected is the property? Has it ever been burgled or damaged?
Traffic/noise/lighting: Think about the proximity to likely sources of traffic, noise or bright lights e.g. busy road, railway, school or stadium.  Visit at different times of the day, when you can experience the full impact.

Making an Offer

Negotiating can be a nerve-racking process, as both parties are trying to balance securing the best price with the risk of losing the deal altogether.  As a buyer, you want to get the property for the lowest amount possible, but don’t want to lose out to rival bids. Equally, the seller will be torn between holding out for their asking price, at the risk of forgoing a decent offer from an attractive buyer, which might put them in a better position.

Things to think about

The asking price is not the same as the value of the property. It is what the seller would ideally like to achieve, but they may well be prepared to accept less. Before making an offer, try to get a true sense of the property’s value in the current market conditions. Research how much similar homes in the area have sold for, and how fast they are selling. That will give you a benchmark, and then give consideration to factors like a loft conversion, home renovations, schools catchment area etc.
Remember the estate agent works for the seller, not the buyer. Their job is to get the best deal for their client (and maximise their own profit), so they will want you to stretch your budget; however, they won’t want to lose the sale.
With that in mind, however much you love a property, play it cool during viewings.  If you’re super keen, the agent and seller will assume you’ll be prepared to pay more, and your bargaining position will be weakened. If there’s an obvious flaw (e.g. the kitchen needs modernising or there’s a very small bedroom), you can tactfully point out that your offer would have to reflect that.

Reasons why you might be able to negotiate a lower price

An attractive offer is not just about price. Certain factors make it more likely that the seller will accept less than the asking price:

  • No chain: if you don’t have a property to sell, there is less risk of the sale falling through. That’s one advantage of being a first-time buyer!

  • Timing to suit the seller:
    If the seller needs a quick sale, they will favour a ‘proceedable buyer’ (not waiting to sell a property and with finances in place  – especially if you have a large deposit or you’re a cash buyer).  You will be in a strong negotiating position if you are ready to act fast, and are willing to go for a quick exchange and completion.
    Offering flexibility on a completion date can also be an advantage, especially where the seller has yet to find a property themselves.

  • The property has been on the market a while. (Check if the asking price has already been reduced).

  • Low interest in the property from other buyers (particularly if you imply you are considering other options).


How to make an offer

Put your offer in writing and be sure to mention any points in your favour (as detailed above e.g. you’re not in a chain and you can be totally flexible on completion dates). You could also say why you love the property and are keen to move there.
Make it clear that your offer is subject to the property being taken off the market (no more viewings), as this will reduce the chances of you being gazumped (when someone puts in a higher bid after an offer has been accepted).
When working out how much to offer, weigh up the strength of your own negotiating position, the seller’s situation, the market conditions and your informed view of the property value.
As with all negotiations, start low (unless other people are making offers, in which case you might want to offer the asking price). A typical opening bid is about 5-10% below the asking price. If your offer is rejected or someone offers more, you may want to submit a counter-offer, but do stick to your budget.  If the seller won’t budge, or it means you are outbid, don’t be afraid to walk away. Whilst it’s disappointing to lose out on a property you like, it is far worse to pay more than you can afford, or more than the property is really worth.
Even if your final offer is turned down, it may be worth following up later. The seller might reconsider if a deal falls through or there were no other higher offers.
Sealed bids/‘Best & final offer’
In a really competitive market, interested buyers might be asked to submit a final bid by a set date. In this instance, offer the highest price you are comfortable paying and point out your advantages as a buyer (e.g. no chain, finances in place, flexibility on timing).

Find out more:

Making an offer – Which?


Offer Accepted? Next Steps

Once your offer has been accepted, there are still several key steps before the property is yours.
In England and Wales, your offer is not legally binding until contracts are exchanged. Either the buyer or seller can pull out before this date.
The system in Scotland is slightly different – once the contracts are agreed (known as ‘concluding the missives’), both the buyer and seller are legally committed to the sale.

1. Instruct a conveyancing solicitor

Your solicitor will complete the legal work on your behalf:

  • Dealing with contracts
  • Completing various searches to find information that might affect the property you are buying e.g. Local Authority, environmental, water and drainage searches
  • Transferring funds at the appropriate time e.g. your deposit and payment of stamp duty


2. Finalise your mortgage

You will need to complete your mortgage application.
Your lender will arrange a mortgage valuation survey to make sure the property value is worth what you have agreed to pay for it. (This determines how much they will be willing to lend you).
Also make sure your deposit funds are accessible to transfer to your solicitor, ready for exchange of contracts.

3. Arrange a survey

If you’re buying an older property or just for peace of mind, it’s advisable to get a more comprehensive survey than the basic mortgage valuation. A thorough inspection of the property will flag any structural issues (e.g. subsidence or damp) or other major defects (e.g. needs rewiring).
You can use the survey report to calculate any essential repair costs and try to negotiate a reduction on the house price, or ask the seller to fix the problems, or decide whether you want to pull out of the transaction.

4. Take out home insurance

Home insurance comes in two parts: buildings and contents and it is wise to shop around for the best deals.
You will probably have had contents insurance if you have been renting, but as a homeowner you’ll also need buildings insurance, which covers you for repairs if the structure of your home is damaged by an incident such as a fire, flood or storm. Buildings insurance will be a requirement for your mortgage agreement, as the lender will want to protect their investment too. Your policy needs to be in place when you exchange contracts, because you then legally commit to purchasing the property and would be responsible if there were any problems e.g. structural issues, a water leak, fire etc.
If you buy a leasehold flat, the freeholder(s) should be responsible for arranging insurance for the whole building. But do check if it is provided, or if your lease requires you to take out a buildings insurance policy.

Buildings insurance explained – Which?

Contents insurance covers you against theft, loss or damage to your possessions. It is a good idea to have your policy in place before you move, as most will cover your goods in transit, as long as you use a professional removals company. (Alternatively, some removal companies offer ‘goods in transit’ insurance).
Removal van with stuff falling out

Exchange Contracts, Pay Deposit & Confirm a Completion Date


Once your mortgage is approved and the survey and searches are complete, you can exchange contracts and pay your deposit. At this point, the transaction is legally binding and neither party can back out of the deal. (If you did, you would lose your deposit!)

You should also agree a completion date. This is when the sellers have to vacate the property, so once confirmed, you can organise a removal company.


On the agreed date, the deal will be legally finalised: the funds are transferred from buyer to seller and ownership is transferred from seller to buyer. So, you can then pick up the keys and move into your new home. Congratulations!
House man holding key (white background)

Find out more about buying a home:

Buying a home timeline – Money Saving Expert

How to buy a house _ Which?

Homebuying Jargon Buster  – Rightmove

Prepare to Move
Whether you’re renting or buying, moving home involves a whole raft of arrangements & people to contact, including utilities & service providers 


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