Top tips for first-time homebuyers in the UK
So, you’re thinking about buying your first home in the UK? That’s fantastic!
But, oh boy, can it be a whirlwind. There’s so much to think about, from saving up for a deposit to figuring out what on earth a “conveyancer” does.
Don’t sweat it, though. I’m here to walk you through the whole shebang, giving you the lowdown on tips and resources that’ll make this journey a bit less bumpy. This guide will cover the following topics:
- Saving for your deposit
- Understanding your mortgage
- Finding the perfect home
- Making an offer
- The legal stuff
- Moving in
- Settling in
- Resources
Saving for Your Deposit
First things first: money. You’ll need a deposit that’s typically around 5% to 20% of the property’s value. If you’re eyeing up a £200,000 house, that’s between £10,000 and £40,000. Sounds hefty, right? But don’t let it scare you off. There are loads of ways to save up.
1. Set a budget and stick to it
Think of your finances like a leaky boat; plug the holes before you set sail. Track your spending, cut out the non-essentials (yes, even those cheeky takeaways), and set a monthly savings goal. You’ll be surprised how quickly your savings can add up when you keep any unneccessary purchases in check, or switch a takeaway for an at-home ready meal.
2. Help to Buy ISAs and Lifetime ISAs
The government offers these nifty ISAs where they top up your savings by 25%. So, for every £200 you save, you get an extra £50. Free money? Yes, please!
Unfortunately, new applications for a Help to Buy are now closed, so you can no longer apply for this kind of account. But if you already have one open and have never used it, start adding to it today.
You can open a Lifetime ISA instead, which allows you to save up to £4,000 a year towards your first home. The government will then add a 25% bonus on top when you decide to take the money out.
Understanding Your Mortgage
Alright, you’ve got some cash stashed away. Now, it’s time to get your head around mortgages. A mortgage is basically a big loan from a bank or building society to help you buy a home. There are various mortgage ‘products’ to choose from that have different interest rates and longer/shorter time frames you might be fixed in for.
Types of mortgages
- Fixed-rate mortgages
- Variable-rate mortgages
There are fixed-rate mortgages where the interest rate stays the same for a certain period. For instance, you might fix in for two years on a 5% interest rate. This means the interest cannot change within those two years, and will remain at 5%. Once the fixed term runs out, you’ll have to re-fix back in and the interest rate may change from what it was.
Alternatively, there are variable-rate mortgages, where the interest rate can go up or down depending on the Bank of England’s interest rate. Some months you may pay more and others you may pay less, so perhaps the amount you pay over a year or two years will average out. However, you run the risk of paying more than you might have with a fixed-in mortgage.
Each has its pros and cons, and what’s best for you depends on your situation. Shop around and don’t be afraid to haggle.
Get a mortgage in principle
Before you start house-hunting, get a mortgage in principle. This is a statement from a lender saying how much they’re willing to lend you. It shows sellers you’re serious and gives you a budget to work with.
Finding the Perfect Home
Now, the fun part—house hunting! But don’t just dive into the property listings headfirst. Take a moment to think about what you really want.
Location, location, location
Consider the area. Is it close to work or good schools? What’s the neighbourhood like? Visit at different times of the day to get a real feel for the place. Remember, a great house in a dodgy area can be a real downer but buying the worst house on the nicest street can have its benefits!
Must-haves and nice-to-haves
Make a list of your non-negotiables (number of bedrooms, garden, etc.) and your nice-to-haves (fancy kitchen, en-suite bathroom). This helps you stay focused and avoid falling for a house that looks great but doesn’t tick all your boxes.
There is always something you have to compromise on. For us, it was location, as we wanted a different suburb a little nearer to Chester, but the prices wouldn’t allow us to buy there. However, compromising on location worked out for the best – we absolutely love our village and have said we’ll never move away. It has a primary school, friendly pre-school and a pub, and also has a lovely rural countryside feel while still only being 10 to 15 minutes drive from Chester city centre.
Making an Offer
Found your dream home? Brilliant! Now, it’s time to make an offer. But wait, don’t just blurt out the asking price.
Do your homework
Research similar properties in the area to see what they’ve sold for, as this gives you a ballpark figure to work with. Then, put in an offer a bit lower than you’re willing to pay. There’s usually some wiggle room.
In some instances, a property might already have offers on the table, even going over the asking price. In this circumstance, ask yourself whether you’re willing to pay over the odds. If you’re purchasing the property to make some changes and sell it for a profit, it may not be worth the effort. But if you’re planning to live there for 10+ years, paying over the asking price could be a good idea.
Negotiate
Don’t be shy about negotiating. It’s a bit like haggling at a market—if you don’t ask, you don’t get. And remember, the worst they can say is no.
The Legal Stuff
Once your offer’s accepted, it’s time for the legal legwork. This is where a conveyancer or solicitor comes in. They handle all the paperwork, making sure the property’s legally sound and transferring ownership to you.
Surveys and searches
Your lender will require a valuation survey to check the property’s worth. You might also want a more detailed survey to uncover any hidden nasties like damp or structural issues. Your solicitor will carry out searches to check for things like planning permission and flood risks.
Moving In
You’re almost there! But before you crack open the bubbly, there are a few more steps.
Exchange and completion
You’ll exchange contracts with the seller, making the deal legally binding. Then, on the completion day, the money’s transferred, and you get the keys. Hooray!
In the UK, it’s common for exchange and completion to happen on the same day. This can make things a tad stressful, as we found out when the whole chain nearly fell through on moving day. Everything was packed in the vans and we hit a snag. Yikes. Luckily it was resolved, and we exchanged and completed by 5pm so we could get the keys and move everything in!1
Once the exchange part is complete, no one in the chain can back out so it’s a great place to get to.
Moving day
Hire a good removal company or rope in friends and family to help. If this is your first home, you may not have tons of stuff, so a removal company might not be needed. But even if you’re doing the moving yourself, do it properly!
Label your boxes, keep important documents handy, and don’t forget to redirect your mail.
Settling In
Finally, you’re in. Time to make this house your home.
Get to know the neighbours
Don’t underestimate the power of becoming friendly with your neighbours. You never know when you’ll need to ask to borrow some milk or park on their drive.
Our neighbours have checked on and fed our cats in the past, so do your best to get to know them and it may come in handy! The relationship works both ways, and there may be some nice things you can do for them in return.
Personalise your space
This is my favourite part! Paint the walls, hang up some art, and make it yours. Little touches can make a huge difference in turning a house into a home.
Resources to Help You Out
There’s a tonne of resources out there to help first-time buyers so definitely take the time to ready through the information available.
Government schemes
Check out Help to Buy and Shared Ownership schemes. They can make getting on the property ladder a bit easier. Though remember, if you don’t have a Help to Buy open already, applications to open a new account are permanently closed.
Advice services
Places like Citizens Advice and the Money Advice Service offer free advice on buying a home. They’re worth a look if you’re feeling a bit lost.
Property management teams
For those looking to rent before buying, property management teams can be a real boon. They can help you find the right rental property and even give you tips for when you’re ready to buy.
These teams can be extremely beneficial if you don’t live near your rental property. For instance, maybe you live in Birmingham but your rental is in Newport. Having a property management team in Newport means they are closer and able to resolve onsite issues quicker.
Final Thoughts
Buying your first home can feel like a daunting task, but it’s also one of the most exciting journeys you’ll ever undertake. With a bit of planning, some savvy budgeting, and a good sprinkle of patience, you’ll get there. And when you do, there’s nothing quite like the feeling of stepping into your own place for the first time. So, take a deep breath, and get started. You’ve got this.
