The House Buying Process In The UK

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Zahra Khaliq
Zahra Khaliq
October 25, 2021
· 5 min read
The house buying process in the UK
The house buying process in the UK

One of the most exciting milestones on the journey towards adulthood is the opportunity to buy your very own property - a place to call home, solidify your independence and perhaps even start a family. 

Years ago, the house buying process was much simpler, but today, there are a number of things to consider before taking that initial leap onto the property ladder. We’ve simplified the process into a first-time buyer's ultimate guide and checklist of must-haves before doing so.


Step 1: Affordability Check

When thinking about property affordability, there are a number of things to consider, including:

  1. Your Income Level: This will determine how much a mortgage lender will allow you to borrow.
  2. Your Deposit Amount: Generally, you’ll need to save at least 5% of the cost of the property you'd like to buy. For example, if you want to buy a home costing £180,000, you'll need at least £9,000 (5%) set aside for the deposit. The higher your deposit, the less interest you pay when making your mortgage repayments.
  3. Your Credit Score: Your Credit Score is very important as it could affect the success of your mortgage application. A mortgage lender will typically review your credit report and score before deciding whether or not to lend you your mortgage.
  4. Survey and Conveyancing Fees: Legal fees covering work done by a solicitor on surveys, searches, sorting your land registry, stamp duty and more could cost between £1,000-£2,000, although these fees can vary depending on your property, so they could be even higher!

These four key factors will determine whether or not you’re financially fit to buy a property in the first place.

How much money do you need to buy a house in the UK?

Mortgage lenders typically cap the amount you can borrow at 4 to 4.5 times your annual salary. In some cases, you’ll be able to borrow 5 times your income, and very rarely 6 times your income, considering your circumstances and other factors like your credit score.

For example, if you earn £50,000 per annum, you’ll likely be borrowing in the region of £200,000 to £225,000. 

If you decide to purchase a property with someone else, whether that’s a partner, friend or family member, you can take advantage of a joint ownership mortgage which allows you to combine your income.

Step 2: Do lots of Property Research

A property is one of the most expensive purchases you’ll make in your lifetime, so it’s important to carry out thorough research on exactly what it is you’re looking for in your new home. 

For example, depending on your budget and family size (or future family size) you’ll need to consider the minimum number of bedrooms that your new home will need to have, the overall preferred size of the house, the practicality of the house and most importantly, its location. 

If you already have children or are thinking of starting a family, you’ll need to consider locations for schools and catchment areas. If you work a fair distance away, you’ll need to consider travel links, and so on. There’s lots to think about when buying a property, so thorough research is paramount.

Step 3: Get a Mortgage Agreement in Principle

To get a mortgage agreement in principle, otherwise known as an AIP, you’ll need to contact a mortgage company to discuss your circumstances, and if they deem you financially fit enough to start the house buying process, they’ll provide you with a written estimate of how much money they’d be willing to lend you. 

This step will not only give you the confidence to move forward with your search, but will also make you look a lot more attractive to sellers as you’ll already have your paperwork in order.

Step 4: Research Estate Agents

Building good relationships with your local estate agents can make all the difference in your property search. The trick here is not just to call or email to signal your interest in a property, but to see them whenever you can and fully immerse yourself in the house hunting process. 

That way, if your local estate agents come across a property that fits your requirements, they’re more likely to keep you in mind and contact you for more viewing opportunities!

Step 5: Begin your Property Search

Now for the fun part: viewing properties. We’d recommend viewing properties both online and in person. Viewing online usually allows you to filter through your preferences and read up on property features, therefore saving you lots of time, whilst in-person viewings give you a real feel for the space and atmosphere of the house.

When viewing a property in person, you should ask yourself the following:

  1. Can I see myself living here?
  2. Can I make this property my own?
  3. Is the layout of the house practical for me/my family?
  4. Is there potential to extend or improve this property if I decided to in the future?
  5. Am I happy with how the house is positioned on the street? (i.e. is it easy to park my car, is the road too busy or too loud, and so on)

Step 6: Make an Offer and Secure a Mortgage Deal

Once you’ve found your ideal property, you’ll be ready to make an offer. 

Depending on the speed of the market (and how badly you want the property), you can either offer below the asking price, the exact asking price or in some cases, over the asking price.

Offering less than the asking price usually leaves more room for negotiation, but your offer should be no more than 25% below. Offers can be made either over the phone or in writing to your estate agent.

Once your offer is accepted, you can either get a fixed term mortgage to know exactly what you’ll be paying each month, or a tracker mortgage - a type of variable rate mortgage that usually follows the Bank of England's base rate - in other words, the interest rate at which high street banks borrow money.

A fixed-rate mortgage is popular amongst first-time buyers because they usually want to know exactly how much they’ll need to budget every month.

Step 7: Conveyancing and Survey

This step is usually done through a solicitor overseeing the legal process from when your offer is accepted, right through to completion. Your solicitor will be responsible for carrying out surveys, searches, sorting your land registry, stamp duty and more.

You may also have this step done by a conveyancer, who may not be a qualified solicitor but will certainly have experience in dealing with properties.

For an in-depth house survey, you’ll typically pay around £1,000 for structural checks and to identify any other factors that might stand in the way of you acquiring the property.

Step 8: Get Buildings and Contents Insurance

Buildings Insurance and Contents Insurance are typically bought together. These will cover you in the case of an unexpected adversity such as a flood or fire. And since you’ll officially own the building at that point, you’re better safe than sorry!

Step 9: Exchange Contracts, Collect Keys and Move in!

This is the most critical stage of the process because you’ll need to ensure you have the following in place before you can collect your keys:

  1. A written mortgage offer 
  2. An agreed completion date
  3. Building Insurance

If you have all of the above sorted, then you’re officially a homeowner! You’ll be able to collect the keys from your estate agent and enjoy your lovely new home.

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Zahra Khaliq

Zahra Khaliq

Hi, my name is Zahra, and I'm responsible for Content and SEO at Koody. Here to simplify and provide tips on personal finance so that you can kickstart your journey towards financial independence.
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