The truth is that buying a property comes with many challenges. Whether you’re a UK resident looking to buy for the first time or a Non-resident looking to buy property internationally, you’re going to face similar challenges no matter your circumstances. There are lots of aspects to consider – not just the cost of the property and the hassle of moving. With a cost of living crisis on our hands and mortgage rates being high, the costs of buying are continuing to put people off, driving the rental market as demand is at an all-time high.

More and more buyers are seeking support from family members as the cost of deposits are unattainable for many people. Deposits can set buyers back a whopping 6 times as much as the average salary. Buying a home as a single person is even more difficult – not just to cover the deposit but to successfully get a mortgage.

Help, however, is on hand. The process of buying a property isn’t one that you take on yourself. You’ll need the services of a solicitor to manage legal matters and, most of the time, an estate agent to handle negotiations between the buyer and seller. This article sets out the different challenges including the extra costs of buying a property, getting a mortgage and the different schemes in place for first-time buyers.

Who is eligible to buy a house in the UK?

All UK residents and citizens can buy property within the UK. The legal matters of owning property is straight-forward to navigate as long as you have a conveyancer managing all the legalities. For foreign nationals looking to buy property, they will need two years’ worth of being a legal resident of the UK as well as having employment. While you can buy property without these stipulations, you will find it more challenging to get a mortgage and you may be asked to contribute a larger deposit.

What are the first steps before you start looking at properties?

If you feel that you’re ready to buy, there’s going to be a long checklist to work through before you can get out there and view the different properties out on the market. Your very first step is really to go over your finances and make sure that you will be able to support all the additional costs that tally up when buying a house. There are many costs that creep up as you go through the process. We’ll list them in this blog, but as long as you build up a good team to help you through the process, none of these will come as a big surprise.

Every buyer comes from different levels of financial security. If you have the finances to buy outright and not borrow, a lot of these steps won’t apply to you. Whatever your situation, you will still need to have all the legal aspects of purchasing property sorted.

Check your credit score

Before you seek out a bank and look into mortgages, check your credit score as how much you can borrow and what plan you’ll be eligible for will depend on your credit history. Checking is straight-forward enough and the main agencies that will check for you can do so free. If your credit score is low, you may need some advice on how to improve it so you can apply for a mortgage.

Start saving

Hopefully you’ve already considered this part of buying a house if you’re a first-time buyer. You’re going to need to put down a minimum of 5% of the property value as a deposit and that depends on the mortgage that you go with. Depending on what means you have, you can go higher but it’s a discussion that’s best had with a mortgage advisor.

Speak to a mortgage adviser

Shopping around for mortgages is very daunting so it’s a very good idea to speak to an expert. It’s always good for peace of mind, even if you may be paying for their fee. Making sure that you go for the best deal that works for you takes that stress off your shoulders.

Get your team together

You’re going to need a conveyancer to handle the legal side of buying your property. There are a lot of hoops to jump through when buying a property and only a solicitor can manage these aspects for you. Reach out to a number of solicitors and get quotes before going ahead.

What are the upfront costs to buying a property?

This will be old news for buyers who are already on the property ladder, but there are many additional costs involved in buying a property. Before you start the process, you’ll need to be aware of them so you aren’t caught out. We’ve listed the ones you need to consider, but rest assured that between your solicitor and estate agent, you’ll be well informed of what you have to cover.

The deposit

While this is an obvious one, it’s going to be the amount that you need to cover the most urgently. It’s the largest amount that you’ll have to put down. This mortgage calculator can help you to get a better idea of how much you will realistically need to save.

Conveyancing fees

How much you’ll be charged depends on the firm you go with. We advise that you compare their fees so you aren’t paying more than you have to. You expect a wide range of fees but on average, a conveyancer will charge between £500-£1500.

Stamp duty

Unless you’re a first-time buyer and have relief from paying stamp duty tax, you will have to pay an additional amount depending on the cost of your property.

All the information you need to know about Stamp Duty Land Tax is available on the gov.uk website here.

Land registry fee

Sometimes this is covered in your conveyancing fees but you will need to pay for having your property registered.

Mortgage fee

Yes – there is another fee on top of your deposit and your monthly repayments. The lender will charge you for setting up the mortgage. How much this fee costs will depend on who you go with.

Survey cost

While it’s not necessary, a homebuyer’s survey will set out the condition of the property so you don’t encounter any unpleasant surprises once you’ve agreed to an offer. You can contact a chartered surveyor independently or have your estate agent arrange this on your behalf.

Indemnity insurance

For additional security, indemnity insurance will cover any potential legal issues in the future. While it’s not necessary, it’s a one-off payment that will protect you.

Removal costs

You’re going to need a hand moving into your property once everything is agreed. If you’re planning to relocate a fair distance, this cost could end up stinging you if you’re not careful. Plan ahead and shop around between removal companies for the best quote.

Building insurance

This may be a requirement for your mortgage agreement. It’s an annual payment that will cover you for any damages.

Reservation agreement

Both parties, buyer and seller, can choose to put down a fee to lock in the offer. This gives both security. If either pull out of the agreement, they risk forfeiting the payment. Usually this is around £1000 and is returned after the process is settled.

Getting a mortgage

When you apply for a mortgage, you’ll have to prepare documents ahead of meeting with the lender. The success of your eligibility depends on your age, finances and credit score. There are lots of factors to consider when borrowing for the first time so don’t hesitate to speak to an advisor before going ahead.

When you visit the lender for your appointment, they will ask you to provide and give proof of the following:

  • Expenses (utility bills, direct debits etc)
  • Proof of benefits
  • P60 to prove your employment status
  • Your payslips
  • Identification (driver’s licence or passport)
  • Proof of address (if using a passport and address isn’t listed)
  • Bank statements showing your finances over the last three months
  • Tax returns if you are self-employed

Bear in mind that rejections do happen even if you have all the correct documentation. Don’t lose hope if it happens. You can ask the lender why you were rejected or speak to an advisor if they don’t give a clear reason.

Making an offer

When you’re ready to make an offer, all negotiations will go through the estate agent who will contact you on their behalf. If the property has a lot of interest, you may end up in a bidding process and sometimes, this can take some time to get your offer agreed. Seek advice during this process and don’t be pressured to put down more than you’re willing.

Once you’ve had your offer accepted, there’s still much to do. You’ll need to contact your solicitor and mortgage lender. You can then arrange for a survey.

If you have your mortgage in place and legal matters finalised, you’ll then be given a completion date. You can then sign the transfer deeds which have to be witnessed legally. Once your solicitor confirms that they have received the payment from your mortgage lender, the title deeds are then yours.

How long does the process of buying a property take?

This is a challenging question to answer. The quickest turnarounds aren’t a good benchmark to follow as you can’t factor in unforeseen complications that could slow down the process. It can take years to save up ready for having a mortgage plan in place. From putting down an offer to completion, however, it can take between 12 weeks to six months. It all depends on how smoothly the process goes.

What help is there for first-time buyers?

With house prices soaring over the past 10 years, the UK Government and the Bank of England have introduced schemes to help first-time buyers.

Government schemes for first time buyers

The UK Government has set out schemes to help first time buyers to get onto the property ladder. Here are a few:

Lifetime ISA

Anyone aged between 18 and 39 can open a Lifetime ISA and get a government bonus of 25%. If you open this ISA at 18 and make the maximum contribution every year until the age of 50 (when the bonus stops being paid) you could get a total top up of £32,000.

You can only use the money to buy your first home or for retirement from the age of 60.

Shared ownership

Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25% up to 75% and can increase your stake at a later date.

New shared ownership

Announced in September 2020, the minimum initial share to buy in a property is reduced from 25% to 10%. Additional shares in the home can be bought in 1% instalments with heavily-reduced fees. It will also include a ten-year period for owners where the landlord agrees to cover the cost of any repairs and maintenance to the property.

Mortgage guarantee scheme

In 2021 a new government scheme was introduced for properties worth up to £600,000 was announced. The scheme was designed to encourage lenders to offer 95% loan to value (LTV) mortgages to help people to buy a home.

Starter homes initiative

The government is working on a scheme that will see 200,000 new-build homes in England sold to first time buyers aged between 23 and 40 with a 20% discount.

Stamp duty relief

First-time buyers in England and Northern Ireland don’t have to pay stamp duty for properties that value under £425,000.

Looking to move to Eastbourne? We can help

We are the longest established independent estate agent in Eastbourne. At Town Property, our team of experts can help put you in touch with the right people to get your dream move on the roll. While buying a property is a long process and can be a challenge to navigate, you don’t have to go through the process without support. We are here to help make the process as smooth as possible. From the initial phone call where you book a viewing to when we hand over the keys, we’ll be in a partnership to ensure you encounter no issues.

If you’re interested in moving to Eastbourne and want to arrange a viewing of one of our properties, you can request a slot online or by calling on 01323 416600.