The process of buying a house is complex (and costly) with many layers. You need to find somewhere you like, get an offer accepted, arrange a mortgage, hire a solicitor and fill out plenty of paperwork.
There’s a lot to unpack – and that’s before the actual unpacking begins once you’ve moved. Here’s a step by step guide to make things easier.
The home buying process
- Set a budget
- Get your head around the costs
- Save for a deposit
- Check your credit score
- Speak to mortgage lenders
- Find your dream home
- Get a solicitor
- Make the right offer
- Get a survey
- Negotiate the house price
- Exchange contracts
- Get buildings insurance
- Move in
How long is the process of buying a house?
Buying a home in England, Wales and Northern Ireland usually takes around 6 months. However, it can be quicker or longer than this; sometimes it’s as quick as 6 weeks, often it stretches to 8 months or more.
Once you’ve found a property and carried out multiple viewings, a typical timeline looks something like:
- Obtaining a mortgage = 3-6 weeks
- Property survey = 2-3 weeks
- Exchanging contracts = 2 weeks
- Completion = up to 28 days (bear in mind completion can be delayed)
- Moving day = 24 hours
Step 1: Finding a home
The house-hunting process starts before any negotiations have taken place or paperwork has been filled in. At this stage, it’s important to work out what you can afford, how much deposit you have and the amount you can borrow if you’re taking out a mortgage. The costs of buying a house can quickly mount up!
How much deposit do you need to buy a house?
The minimum deposit for a mortgage is usually 5% of the property purchase price. However, a deposit of 15% or even 20% will make the process of borrowing funds much easier when you come to apply for a mortgage.
Recently, 95% LTV mortgages have been extremely hard to come by recently, as mortgage brokers have stopped offering ‘riskier’ loans. This has made things tougher for some first-time buyers.
It is best to arrange a mortgage as soon as possible and get a DIP (decision in principle), which tells you how much money a lender is likely to offer. This will give you a clearer idea of what you can afford and the type of property you can buy.
Improve your chances of getting a mortgage by getting prepared; a lender will want to see evidence of incomings (e.g. salary) and outgoings. You should also be realistic about what you can afford.
Check your credit score
Your credit is another factor that should be taken into consideration early on in the process.
Check your credit score and whether there are any errors that need fixing. Lenders will always perform a credit check before offering a mortgage, and you want to make sure everything is in order before applying for finance.
Searching for a home
As for finding your new home, the majority of buyers start their search on property portals like Rightmove and Zoopla. Portals display all of the latest properties on the market in one convenient place so that you can search in your desired area and see all the homes available.
It’s also possible to go to the estate agents’ websites directly. However, doing this will only show the stock they have, rather than everything available in your chosen postcode.
After identifying properties that interest you, it’s time to go on viewings. Arranging a viewing will be through the estate agent advertising the property or with the seller (also known as a vendor) directly.
Some things to look for when viewing a house include damp, structural issues and if there’s enough space.
There’s no limit to how many viewings you go on, as it’s entirely down to how long it takes to find somewhere that you think could be your next home. That’s why it’s important to ask plenty of questions during the house viewing, such as who are the neighbours, what is included in the sale and how long have the current owners lived there.
Home purchases tend to be long-term investments, so you want to make sure you’re making the right choice.
Step 2: Getting a solicitor
The most lengthy part of the home-buying process; conveyancing is the legal action undertaken by a solicitor or conveyancer. A conveyancer might not be a qualified legal professional, but they will specialise in property transactions. If you opt for a solicitor, be sure to check that they have experience in property law.
Finding a conveyancing solicitor is an essential step in buying a property, as they will:
- Conduct searches on the property, such as checking with the local council to see if any planning issues might impact the home’s value.
- Liaise with the vendor’s conveyancer, your mortgage lender and estate agent
- Check all documents provided by the seller, such as leases if you’re buying a leasehold or freehold details
- Draft and check contracts for exchange
- Pay any stamp duty owed
- Transfer money to the seller for completion
Get conveyancing quotes below – it’s free to enquire!
A solicitor or conveyancer costs between £500 and £1,500, depending on the cost of the property and the difficulty of the transaction. You will also have to pay for the searches they conduct, such as local council checks. These cost in the region of £250-300.
Step 3: Conduct a property survey
While the solicitor or conveyancer are doing their searches, it’s worth conducting a property survey. Surveys are optional, but they can highlight any potential building or structural problems that might not be detectable during a viewing.
Doing a survey will make you aware of any potential issues, at which point you can decide whether or not to renegotiate the offer or budget for any minor work that needs undertaking.
You can also ask the seller to fix any problems before the transaction completes. A surveyor will conduct a property survey, and they charge between £200 and £1,000 depending on the type of surveyor you want.
Step 4: Making an offer
Once you’ve found somewhere that you’d like to buy, the next stage involves making an offer. The offer process typically happens through the estate agent.
As the buyer, you won’t pay any fees – whether you’re using an online or high-street estate agent. The seller covers the agent fees.
When it comes to making an offer on a house, it’s common practice to offer less than the asking price. You’ll likely then negotiate the house price. However, you shouldn’t go too low as the seller might not think you’re serious about buying their home.
It’s a good idea to research sale prices for similar properties in the same neighbourhood. Doing so will give you a clearer indication of the amount you should offer. There may also be a scenario where you need to offer more than the asking price, especially if there is plenty of interest in the property.
There is no one-size-fits-all approach for offering on a property, with the results coming down to your desire to buy and the vendors’ need to sell.
While having an offer accepted is a positive step in the right direction, things can still go awry. For example, gazumping can still occur.
Step 5: Exchange contracts
The exchanging of contracts means the finishing line is in sight – the point where you’re ready to set a date for moving and officially buy your new home. It’s also when both parties are legally bound to the sale.
Exchange happens when the buyer and seller’s legal representatives have conducted their checks and are happy with the results.
For the exchange to take place, the following must be completed:
- A written mortgage offer from your lender
- Thorough information about the property, such as fixtures and fittings forms from the seller
- Results of local council searches
- A designated completion date
A lot needs to happen between exchange and completion. Avoid delays by keeping communication open and micromanaging your purchase.
Step 6: Sort out buildings insurance
Your new home is on the horizon, and you can start to imagine the first time you turn the key. But there are still a few particulars to sort out that coincide with completion.
As soon as you exchange contracts – get buildings insurance in place. You’ll be responsible for the property once this happens, and it’s better to be safe than sorry.
Buildings insurance covers the structure of the building and is often required to be in place by mortgage lenders before they hand over the funds. The cost depends on the size and style of your property. It’s unlikely, however, that you will pay more than a couple of hundred pounds for 12 months’ worth of insurance.
Hire a removal van
Once you have gone through the lengthy home-buying process, it’s time to think about moving your stuff into your new home.
Research van removal companies to see which deals are available for when you move in. Of course, you can hire a van and do it yourself. However, your insurance may not cover any damage that might occur.
Step 7: Completion
Completion is the final step on your journey to buying a new home. It typically takes place around two weeks after contracts have been exchanged and involves the transfer of funds to the relevant parties.
- Vendor – your solicitor will transfer the funds for sale over to the solicitor of the property seller
- Stamp duty – your solicitor will oversee the Stamp Duty Land Tax payable on the property. There is an extra 3% due on second homes and buy-to-let properties
- Solicitor legal fees – this is the amount due to the solicitor for overseeing the transaction
Your solicitor will then register the property with the land registry and, voila, it is officially in your name! You’ve just bought a new home.
All that’s left to do is collect the keys and start a new adventure.