How to Buy a House in the UK: A Step-by-Step Guide

You’re about to embark on the biggest financial step you could ever take – purchasing your very first home. But… where do you start?!

Buying a house is a BIG DEAL, there are lots of things to consider and many steps to take – we’re here to help and guide you through it all.

Saving for your deposit

The first big step – and what people often find overwhelming. It’s a huge sum to face and you might wonder how you could ever save it. 

Let’s start with what you need to save: You will need AT LEAST 5% of the price of the property you’re looking to buy. Now, we know that if you’re thinking about buying, you’ve probably already had a browse on Rightmove and Zoopla in the area you’re looking to buy in. So, you will have an idea of price range, you can work out the 5%.

For example, if you’re looking to purchase a £200k home, you would be looking to save £10k and borrow £190k.

Now, saving towards your deposit will take several years for someone on an average wage. Prices will understandably change over that time, but you have to start somewhere – so set a target, budget wisely and start squirrelling away those funds. The more you can save, the larger the deposit you can put down, meaning you have access to mortgage deals with lower interest rates. 

If you’re a first time home buyer, you also have the option of saving into a lifetime ISA, which entitles you to a 25% top up from the government. This is capped at £1,000 a year – every little helps!

There is also the ‘Bank of Mum and Dad’ option. If your family can afford to help you onto the ladder by boosting your deposit, this will significantly reduce the amount of time spent saving. Be sure to make your mortgage advisor aware of this as this will be processed as a ‘gift’ and will require additional paperwork. 

House hunting

For many – this is the fun bit! 

It’s probably been quite a while since you started saving, so you may have changed your mind about the area you want to live in and prices are very likely to have changed too! 

Now is a good time to loop in a mortgage advisor, as they will be able to give you an idea of what you can afford based on your income and deposit. We’ll talk more about that later in the video. For now, it’s time to get stuck into your research. 

Make sure you’re happy with the area that you’re thinking about:

• Visit at different times of the day or week
• Check out local amenities – schools, doctors, dentists, supermarkets
• Check that the travel links are good

Many of these are likely to be important to you – but even if they aren’t, they could be important for future buyers when you come to sell.

Now is also the time to start thinking seriously about budgets. You’ll have an idea of how much you could be spending per month on the mortgage repayments, but you also need to consider other outgoings before committing to a property:

• Council tax costs (this can differ from area to area and on property)
• Insurance costs (these can be higher or lower depending on the area)
• Travel costs (how much will it cost you to get into work every day)

Once you find a place you like, view it multiple times – bring along friends and family for feedback, in case they spot an issue you might otherwise have overlooked.   

One thing to bear in mind here is that you are under no obligation to use the estate agent’s mortgage adviser and you have the freedom to choose any adviser you want to work with. It is legal for an estate agent to recommend a broker, but it is illegal to insist that you use them.

Working with a mortgage advisor

Your mortgage advisor is your champion when it comes to buying a home. They can advise you and support you through various stages of the process:

• Understanding what you can afford before you start seriously house hunting
• Providing you with an Agreement in Principle (some sellers want you to have this before viewing, so they know you’re a serious buyer)
• Organising your mortgage, finding you the right fit
• Advising on types of property, for example, the pros and cons of flats, new build and cladding

As we’ve just said, it’s useful to speak to an advisor before you start house hunting. They’ll give you a much more definitive idea of what you can afford so that you’re not looking at properties that you won’t be able to afford (is there anything more heart breaking than falling in love with a property, only to find that it’s out of your price range?)

By the way, did you know that close proximity to bars, takeaways and petrol stations are often a ‘no go’ for lenders? Your mortgage advisor knows all about this, so they’re really the very best person to advise you when you’re looking. 

Your mortgage advisor will also talk to you about things you may not have even thought about – including life insurance, income protection and critical illness cover. While you might not think this is relevant – you’re super focused on buying a home! – it really is a conversation worth having because these additional protections will protect your asset. 

Making an offer

This is huge! You’ve found a property you love and can visualise yourself in and now you’ve got to make an offer on it. Your palms are likely to be sweating at the prospect, so don’t worry if you feel overwhelmed – that’s totally normal!

There’s no harm in offering a little below the asking price, but if it’s a popular area or property, you might have to offer the full asking price, or even a little more. You can speak to the agent about this, to get an idea of how long the property is on the market and how many other people might be interested. But you need to remember that the agent is looking to get the seller the best deal, they have commission to earn after all, so definitely check online property portals to see what similar properties area going for in the area. 

The decision is really ultimately yours. And, once you’ve made it, let the agent know – including any other positive points in your favour. You could be a chain-free or a first time buyer, which are things a seller loves to hear as it indicates a more stress-free process. 

A key point here is that you should say that your offer is subject to a survey and the property being taken off the market. You can do this in person or over the phone, but we recommend putting it in writing as well. 

Securing your mortgage

You’ve already been working with a mortgage advisor, but now it’s time to really get stuck in. Brace yourself – there’s a lot of paperwork involved!

First things first, your mortgage advisor is going to need:

• Proof of identification (for all parties due to be on the mortgage)
• Proof of residence for each customer (a bank statement or a utility bill that’s less than 3 months old)
• Proof of income (equivalent of 3 months pay slips; last 3 years accounts or SA302s tax overviews)
• 3 months of bank statements for each customer (you’ll need this for each current account you have and must show client name and full details)
• Proof of deposit (3 months proof of where the money has been, like 3 months worth of bank statements. If the deposit has been gifted deposit, you will need to submit a letter from the Giftor stating the amount; who it is gifted to, as well as evidence of where the money has been over the last 3 months evidence)
• Evidence of existing debts, credit card statements/report. Now is not the time to try to hide anything – be open and honest about any debt you may have. It will be found out later if you don’t!
• Details of property portfolio. Now, this is only applicable to landlords, if you are purchasing a residential property you don’t need to worry about this!
• Latest mortgage statement, if you already have a mortgage on another/other property/ies.

Then your mortgage advisor will be able to advise on the type of mortgage you want to apply for. There are a few different types, but the most common ones are:

• Fixed term mortgage: This allows you to lock in an interest rate for a set number of years. Given the current economic conditions, people are usually looking for the best deal they can afford, which they can lock in and protect themselves from any future increases
• Tracker mortgage: The monthly repayment can change because your mortgage is tracking against the interest rate – so it could go down… but it could also go up

Once you and your mortgage advisor have settled on the type of mortgage, you can also consider the mortgage term – so how long it will take you to pay it off. The terms vary and can go up to 40 years. The term will impact your monthly repayments – for instance, a longer term could mean lower monthly repayments, but you could over the course of the term spend more than you would across a shorter term.

Something to bear in mind is that there is a sense of urgency here – if you’ve been following the news, you’ll know that rates have been changing and products have been removed from the shelves, so while you have been house hunting with a ball park figure in mind, you should never do all of your budgeting based on a particular rate, as you could find that it is withdrawn from your lender before your broker could apply. 

This is also why it’s important to ensure that your broker has all of your documentation as soon as possible, so they can act quickly, before a product is withdrawn!

Sorting out conveyancing

It’s not just a mortgage advisor you need on your team – you also need a solicitor once your offer is accepted.

You can instruct a conveyancer or a solicitor. A conveyancer may not be a solicitor, but will specialise in property. If you choose to use a solicitor, make sure they have recent experience in property law! 

A property solicitor will carry out searches, draw up and check contracts, deal with the Land Registry and pay any stamp duty. 

There will be more paperwork – be sure to have tea and cake to hand when you settle down to go through it!

Someone else on your team is the Mortgage Case Manager. Most brokers work with one and they are the person to build a relationship with. They work for you and the broker. They will work with the lender to get you a mortgage offer and liaise with you if the lender has additional questions. Once you have an offer they will work with the lender and conveyancer to get you into your new home as quickly as possible – they are absolutely worth their weight in gold!

Getting a survey

Yes, you’ve fallen in love with your new home, but you shouldn’t let that cloud your judgement! A house survey can reassure you that everything is as it seems – or alert you to any issues in the property, which may impact what you are happy paying or whether you want to go ahead with the purchase at all.

You don’t HAVE to get a survey – but we really, really encourage it. You don’t want any nasty – and expensive! – surprises once you move in. You want to know that the structure of the property is sound and that the condition is safe and liveable. 

You’ll want a surveyor that is registered with the Royal Institution of Chartered Surveyors (Rics) and the cost of the survey will vary depending on the location and size of your property. There are different levels of survey available, some more in-depth than others – get the very best one you can afford. 

Again, it’s not going to be a fun read, but please do make sure that you read and understand the report that you receive. This is key information – it could give you the green light to go ahead or grounds to renegotiate the price. 

Exchanging contracts and completion

It’s all becoming very real now! Here is the point where your legal representation and that of the sellers’ swap signed contracts. This is also the time when you need to pay the deposit – take a deep breath! That’s a BIG financial transaction.

Once all of that is done, it’s HUGELY unlikely that the purchase will fall through, so allow yourself a celebratory moment before you start packing and sorting out a removal van!

About two weeks after you’ve exchanged contracts, the money will be transferred to the seller and you can collect the keys and move in! There is some flexibility here – especially if you’re in a chain, the seller might need to push your move in date to line up with their moving date. It’s just a case of communicating to find a time that works for everyone involved.

Now, moving can be a stressful time – there’s a lot of packing and unpacking, decorating and buying new furniture. But – YOU DID IT! You bought a house!! That is a huge achievement, so savour it!

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