Your complete first-time buyer’s guide
Buying your first property can be both daunting and exciting. Before you start looking for a home you need to research the property market, gather information about your personal finances, and seek meaningful, professional advice. It’s a large financial commitment and as a first-time buyer you’re probably brimming with questions.
We are excited to present our advanced conveyancing tool, ensuring you receive pricing that is both transparent and competitive.
We think buying your very first property should be a straightforward, enjoyable life experience and, with the right preparation, it will be. QualitySolicitors is here to answer your questions and point you in the right direction.
How long does it take to buy a property?
On average, it takes about six months from when you first start searching for the right property to when you’re handed the keys and can move in. However, this timeline can vary. It might take you longer to find a property because you want to be sure you’re making the right decision for you. There are also a number of factors that need to align throughout the conveyancing process to ensure a smooth sale and completion, such as both parties agreeing contractual details or the length of the property chain.
Conveyancing is the legal process that transfers a property from one person to another. Given property law is a specialised area, having an experienced solicitor helps protect you against any risks. If you are looking to get a mortgage to help pay for the property, it will usually always be necessary to use a conveyancing solicitor.
You can help to speed up the conveyancing process by finding a conveyancing solicitor before you start searching for a property. Most law firms won’t charge you for their service until you find a property and some also offer a ‘No Move, No Fee’ deal. Finding a trusted solicitor in advance means you won’t be in a panic trying to find the right solicitor when you’ve found your home and your offer is accepted. See below for pointers in choosing the right property solicitor.
If you buy a property at auction the process is quicker. Once you’ve made an offer on a property you are legally bound to complete the purchase within just 28 days. As you would expect, this fast-track route isn’t without risks and requires you to have all the right financial and legal paperwork in place in advance. Another reason to start your solicitor search in advance too.
Will I be eligible for a home mortgage?
Mortgage lenders check whether you can afford mortgage repayments not just at their current interest level, but also if interest rates suddenly shoot up. They look carefully at your bank statements for the past three months and also make an assessment based on your continuing income.
Before applying for a mortgage, you need a deposit. Try to save between 5% and 20% of the likely price of your home. You need to research the market in your chosen area to work out roughly how much that will be.
If your parents are contributing towards your property, be sure to tell your mortgage advisor as it could have an impact on your mortgage offer. We provide guidance on accessing the Bank of Mum and Dad in another blog post here.
Explore different home mortgage options by talking to an independent financial advisor (IFA) or a mortgage broker. When choosing a professional, ask them if they are a ‘whole-of-market’ broker so that they have access to all the options available to you. If you prefer, you can also look into mortgage options directly with a bank or other lender.
Are there any tax breaks for first-time buyers?
First-time buyers purchasing a property for £300,000 or less pay no Stamp Duty Land Tax (SDLT). SDLT is a government tax paid on land and property purchases costing more than £125,000 in England and Northern Ireland.[1]
What ‘Help-to-Buy’ schemes are available?
Visit QualitySolicitors’ ‘Help to Buy Schemes – what you need to know’ page for a detailed break-down.
1. Help-to-Buy Equity Loan
This government scheme offers an equity loan for newly built properties. If you have a 5% deposit, you can apply for a government loan of up to 20% of your property. If you live in London, you can apply for a loan of up to 40% of the purchase price. This loan is interest-free for the first five years of owning your home. You can then access a mortgage to pay for the remainder of the purchase price (55-75%) if needed.
Be wary: Recent findings show that those who’ve purchased a new build home with the government’s Help to Buy Equity Loan in the 12 months to September 2019 have paid an average 10.3% premium. These findings are according to data collected from 41,500 first-time buyers using reallymoving for home move services over the last year.[2] So, it pays to do your research and know the average values of like properties in your area before making an offer.
Good to know: A new version of the Help to Buy Equity Loan will be launched in April 2021, replacing the current version. This update will mean only first-time buyers can access the scheme for properties with a market value up to a defined regional price cap. The equity loan scheme will run for a further two years before closing in March 2023.
For more information, visit the Help to Buy website.
2. Help-to-Buy ISAs
These government ISAs (Individual Savings Account) help you to save for a deposit faster. The government adds 25% to the amount you save each month. If you are considering opening a Help-to-Buy ISA, act quick as the scheme is closing! The deadline for new ISAs is 30 November 2019.[3]
3. Rent-to-Own (Wales only)
This scheme enables tenants to purchase the properties they rent. You build up a lump sum for a house deposit by having 25% of your rent paid over the duration of the tenancy.
For more information, visit the Welsh Government’s Rent to Own website.
4. Starter Homes
First-time-buyers under the age of 40 can purchase a newly built property for a 20% discount on the market value.
For more information, visit the Starter Homes website.
5. Shared Ownership
Under this scheme you buy a percentage share of a property and a housing association owns the other percentage. You still need a 5% deposit to cover your share. There are a number of different schemes, depending upon where in the country you live.
For more information, visit the Share to Buy website.
How do I find the right property?
A lot goes into making a house a home. Consider:
- What are the local amenities like?
- Is it easy to park?
- How long will it take to commute to work?
- What are the neighbours like? (Walk around the area and talk to people.)
- Do I have friends/relatives nearby?
- When you view the property check:
- Are there any strange odours? (Damp, drains, pets?)
- Is it quiet or noisy?
- Are the rooms big enough for me?
- Is there enough storage space?
Also think about how energy-efficient the property is. Your estate agent will give you a copy of the Energy Performance Certificate (EPC). From this, you will see roughly how energy-efficient the property is on a scale of A-G and can factor in ongoing running costs or initial work costs to improve the energy efficiency rating.
EPCs are not totally accurate because they don’t take into account how many people live in the property and how much they have actually spent on their bills. What is useful is that the EPC recommends how the property can be altered to make it more efficient to run.[4]
How do I make an offer on a property?
Before you make an offer, research the sold prices of similar properties in the area so you have a guide price.
Now work out your bidding strategy. Is your first offer going to be your best offer? If you choose this method then you avoid a drawn-out negotiation process and show you’re serious. On the other hand, you may end up paying more money than you need to. The alternative is to offer a little lower so that you have some room to negotiate if the first offer is rejected. Don’t make your offer too low, however, or you may end up losing the property.
When you call the estate agent, stress that you are a first-time buyer with no chain as this puts you in an advantageous position.
If the seller accepts your offer then ask them to take the property off the market straightaway. This minimises the risk of another potential buyer offering the seller more money and ‘gazumping’ you before you’ve exchanged contracts (the buyer or seller are not obligated to go through with the deal until contracts have been exchanged).
If the seller declines your offer, ask what other bids are on the table so you can renegotiate. Never offer more than you can afford to pay or more than your research has told you the house is worth.
Once your offer is accepted, notify your solicitor.
What happens after an offer is accepted?
Now you start your mortgage application process and instruct your conveyancing solicitor to carry out searches to make sure the property is safe, legal, and worth the money you plan to pay for it.
Some property searches are optional, but typical searches carried out by your solicitor on your behalf include local authority searches (these will reveal any building control issues, enforcement actions or nearby road schemes), drainage searches (checks sewer connections) and an environmental search (to check that the land isn’t contaminated). If any red flags crop up during these searches, your solicitor may recommend additional specialist searches.
At the same time, your mortgage lender will carry out a valuation survey, where they’ll confirm whether they’re willing to offer you the amount you requested. During this stage, it’s also a good idea to organise your own property survey so you can be sure the condition is as expected and there are no underlying building issues. It’s possible to organise this after having your mortgage offer confirmed, but it’s important this is done before contracts are exchanged. The type of property survey needed will depend on the cost involved. Your surveyor is the best person to recommend what survey or surveys are needed.
Your conveyancing solicitor will manage the entire legal process of the transfer of property ownership from the seller to you from now until completion. This includes property searches, contract negotiations, contract exchange, financial transfers and ongoing legal advice.
Why do I need a conveyancing solicitor?
If you decide to do the conveyancing yourself then you open yourself up to a lot of risks, and, if anything should go wrong, you will have to foot the bill. A conveyancing solicitor is covered by indemnity insurance to protect themselves and you. Lenders will only approve you for a mortgage if you instruct a professional to carry out your conveyancing. This is a specialist area of law for a reason!
Your solicitor will advise you of any problems that come to light as a result of property searches and what to do in case of legal issues. They are experienced in handling property contracts and know what to look for in the small print. They will help you to negotiate the best possible deal on what’s likely to be the most expensive purchase you have ever made.
The right solicitor will reduce the stress of buying a property by proactively and efficiently driving your sale to completion. They will be available on the telephone when you need them, and ready to answer your questions.
Choosing a solicitor that’s local to you is an advantage since they have specific knowledge of the property market and estate agents in your area. If there are no solicitors local to you, or you’d prefer to go with a solicitor that’s been recommended to you, it’s possible to instruct an out-of-area solicitor who can work with you over the phone and via email.
Remember, you don’t need to choose the solicitor that’s been recommended by your estate agent. It is wise, though, to choose a solicitor that is on larger mortgage lender panels.
How do I choose the best solicitor?
- Read trusted reviews from sites like solicitor.info, Google Reviews and TrustPilot
- Seek recommendations from friends and family
- Choose a solicitor who:
- Is an accredited member of the Law Society of England and Wales[5]
- Has been accredited by the Law Society’s Conveyancing Quality Scheme[6]
- Has been approachable, friendly and helpful during your initial enquiries
How can I safeguard my new asset?
Once you’ve completed on the sale and transferred the remaining monies, your solicitor will register the sale with the Land Registry. The document, which is called the Deed of Transfer or the Title Deed, indicates the transfer of the property from one owner to another.
If your parents have contributed financially towards your property, consider asking your solicitor to draw up a Declaration of Trust. This means that when your house is sold, you have all agreed from the outset how the money will be distributed.
Are you purchasing the property with a friend, family member or partner? If you’re putting up unequal monies, you must put a Trust Deed in place. This will protect your assets in the event of any change in personal circumstances.
Don’t forget to make a Will, or update your existing Will, too. Your first home is likely the biggest purchase you’ve ever made and, with such a large asset to your name, it’s worthwhile paying the comparatively small Will-writing fee to protect it. Read more about Making a Will on our website.
Get a free conveyancing quote
QualitySolicitors is always happy to provide friendly, expert advice to first-time buyers. Pick up the phone and talk to us today on 08082747557.
[1] Gov.uk, Stamp Duty Land Tax: relief for first time buyers – guidance note, https://www.gov.uk/government/publications/stamp-duty-land-tax-relief-for-first-time-buyers/stamp-duty-land-tax-relief-for-first-time-buyers
[2] PropertyWire, First time buyers using Help to Buy pay 10% more for new homes (9 October)
https://www.propertywire.com/news/uk/demand-for-new-homes-down-over-8-year-on-year-in-england/
[3] HM Government, Help to Buy, https://www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work/
[4] HomeOwners Alliance, Are Energy Performance Certificates (EPCs) important when buying a home? https://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/are-energy-performance-certificates-epc-important-when-buying-a-home/
[5] The Law Society, Find a solicitor, https://www.lawsociety.org.uk/
[6] The Law Society, Conveyancing Quality Scheme Accreditation, https://www.lawsociety.org.uk/support-services/accreditation/conveyancing-quality-scheme/