Buying your first property is an exciting experience, but it can also be a daunting one. For most people, a house is the most significant investment of their lives.
We've put together this guide for first time buyers to provide answers to some of the most commonly asked questions about buying your first property.
What's The Process For Buying A Property?
The house-buying process can seem confusing, especially if you've never bought a property before. Even once you have had an offer accepted on a house, there are many procedures and checks to be carried out before the sale is finalised and contracts are exchanged.
The key points include:
- Securing a mortgage
- Carrying out any necessary searches – you may also want to get a survey done
- Preparing, reviewing and exchanging contracts
- Paying relevant taxes
- Registering your property
We can help you with all these procedures. For more information visit our page on Buying A Property.
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What Searches And Surveys Do I Need To Do?
Before buying a property you may want to get a surveyor to look at it to assess any potential problems. There are different types of survey you can get, but most will look at things like rot, damp and structural problems in the property. Surveys can be useful, but they are not essential, and many buyers choose not to have them.
There are certain searches that must be carried out, however, before a mortgage lender will agree to give you a mortgage.
These could include:
- Local authority searches – looking at anything in the local area that might affect the value of the property in future, such as any plans for new roads or buildings.
- Water and Drainage searches – to determine whether the property is connected to the main water supply, where the water mains is in relation to the property; whether foul water and surface drainage are connected to the public sewer; and whether there is a public sewer within the boundaries of the property (which may affect your ability to extend the property).
- Environmental searches – looking at things such as flood risk, ground stability, landfill sites and other environmental factors near the property
Depending on the property, there may be other optional searches that could be useful – such as looking at public paths, pipelines and common land near your property. As your solicitor, we'll advise you on what searches you need to get done in order to secure your mortgage, as well as recommending any others we think would be good for your peace of mind.
We understand that the house-buying process can be a complicated one, especially if you've never done it before. We're here to support you at every stage, ensuring you have all the information you need to buy your first property with confidence.
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What Costs Are Involved?
Besides the actual price of the property itself, there are a number of fees and charges to consider when buying your first house.
Some of these include:
- Land registry
- Survey fees
- Stamp Duty Land Tax
We charge a fixed fee for our services, which is calculated based on the value of the property. These fees take into account any searches that need to be done, as well as our legal advice on drawing up contracts and handling the completion of the sale. If it is necessary to undertake any extra surveys beyond our original estimates, these will be added to the cost. You can use our handy Conveyancing Calculator to get a quote in minutes.
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If The Purchase Doesn't Go Through Will I Still Have To Pay Legal Fees?
The house buying process can be unpredictable and purchases often fall through for a number of reasons. Many properties on the housing market are part of a chain, so if something goes wrong with one of the sales further along the chain – if someone pulls out of a sale or the property is taken off the market – it can mean everyone is affected.
When you first instruct us, we'll ask you for a payment on account that is intended to cover the searches detailed above.
However, if the purchase does not go through to completion, it may be that further searches that we had initially anticipated are no longer required. If this is the case and you have paid for searches that were not performed, we will refund these fees and invoice you for any legal work undertaken up to that point.
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Are There Different Types Of Mortgages Available?
There are a number of different mortgages available to new buyers. It's important to choose the one that suits both your financial situation and your plans for the future.
We can provide advice on mortgages and alternative buying options, such as shared ownership.
We have expertise working with the Help to Buy initiatives, including the Help to Buy ISA scheme and the Help to Buy equity mortgage.
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What Do I Need To Be Aware Of As A First-Time Buyer?
As a first time buyer, one of the main things you need to consider is your deposit. Many first-time buyers rely on money from parents for their deposit. If this applies to you, it's essential that your mortgage provider is aware of this and any other third party interests – for example financial gifts or investments from anyone who is not on the mortgage agreement itself.
We have a team of specialist tax and trust experts who can advise you on this when you're securing your first mortgage and putting an offer on a house. Ensuring the lenders are aware of this at the earliest opportunity will mean your completion goes through more smoothly.
We can also advise on how you will be affected by the Stamp Duty Land Tax. For more information, please see our page on Stamp Duty.
We understand that if you've never bought a house before, a lot of the terminology used may be unfamiliar. We will always do our best to communicate things clearly and straightforwardly, while making sure you always know what's happening at each stage of the process.
For more information on some of the common terminology that's used in property matters, see our Conveyancing Guide.
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What's The Difference Between Joint Tenants And Tenants In Common?
If you're buying your house with someone else, you'll need to think about whether you want to be a joint tenant or a tenant in common.
Joint tenants (sometimes called 'beneficial joint tenants'):
- You have equal rights to the whole property
- The other owners automatically inherit the property if you die
- You can't pass on the property in your Will
Tenants in common:
- You can own different shares of the property
- The other owners don't automatically inherit the property if you die
- You can pass on your share of the property in your Will
We can advise you on what's best for you. You can find more details about different tenancy rights and joint ownership on our Joint Ownership page.
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What's The Difference Between Leasehold And Freehold?
A freeholder of a property owns it outright, including all the land it is built on. If you buy a freehold you will be responsible for the repair and maintenance of the building and the land. It is common for most houses to be freehold and most flats to be leasehold, although this is not always the case.
A leaseholder owns the property for the length of term of the lease. You will have a Landlord and there may also be a Managing Company. Generally the Landlord will own the freehold of the building and land. When you purchase a leasehold property, you are taking over the lease from the previous owners. When a lease is first granted it is for a specific length of time, or a term (this can vary but common examples include either 125 years or 999 years). When you take over the lease you will only be purchasing what is left of the term at that time.
With a leasehold property, the Landlord is usually responsible for the repair and maintenance of the building as a whole. The Landlord is also commonly responsible for arranging buildings insurance. For example, if you are purchasing a flat, the main structure of the building and all the common parts and any garden areas will generally be owned by the Landlord. The cost of maintaining these areas will be passed onto all the leaseholders within a building by way of service charge. You are also likely to have to pay ground rent to the Landlord.
The length of a lease is important as a shorter lease, for example, if you purchase a lease which has 80 years or less left of the term, then you may struggle to obtain a mortgage. The length of the term of the lease will be reflected in the asking price.
It is also possible to own a share of freehold. You will own the leasehold of the property as described above but will also own a share of the freehold. Usually this is where the various flat owners within a building come together and buy the freehold. The various flat owners then each own a share of the freehold. It is important to note that you will still own the leasehold but you will have more control as you will also own part of the freehold. It is a common misconception that owning a share of the freehold means you won't have a lease but this is incorrect.
If you own a leasehold property it's often possible to buy the freehold of your property or extend the lease. For more details see our page on Leasehold Enfranchisement.
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What Is Meant By The Term 'Caveat Emptor'?
The literal translation of 'caveat emptor' is - 'let the buyer beware'. Simply put, it refers to the principle that the buyer is responsible for knowing what they are buying.
This is especially important in property transactions as large sums of money are involved. The complexity of much of the paperwork means it is crucial to have experts on hand to review everything in advance and give you the right advice, so that you can make the most informed decision when buying your first property.
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For more information on the house-buying process, see our page on Buying a Property. Or alternatively, call on 0330 123 0068 to speak to one of our team today.