There are many factors to consider when buying a house. Whether you are looking to buy a house in which to live or as an investment, we take you through the process.
This article covers the main steps to house buying:
Finance
It is essential to work out what you can afford, set yourself a budget and stick to it. With a huge range of mortgages, competition between lenders and low interest rates, many borrowers find themselves being offered vast sums of money. However, interest rates can rise and, as they do, so will your monthly repayments. You could lose your home if you fail to keep up with your mortgage repayments, so make sure they are affordable. As a rule, mortgage repayments should not exceed a third of your net monthly income.
It is best to have a mortgage arranged as soon as possible, so that you are in a stronger position when you find the property you wish to buy. Mortgage lenders can give offers 'in principle' - a tentative agreement to lend you a certain amount of money. This amount should of course match your budget.
For an explanation of the different types of mortgage available, and costs involved in buying a house, see our Mortgages and Finance section.
Property search
Think about what sort of property would best suit your needs. Eliminating unsuitable properties at this stage will save you a lot of time and effort. It is helpful to distinguish between what you need and what you want, and be prepared to compromise over location and local amenities.
Majority of people looking to buy a house purchase their property through an estate agent. Register with agents in the area in which you are looking, and tell them exactly what you are looking for. Be keen, contactable and ready to view properties immediately as properties can be sold in under a week. Be aware that estate agents are paid by, and act in the interest of, the vendor.
You can search houses for sale and flats for sale on our database, and find out local information including schools, council tax, transport, crime rate, house prices and leisure facilities.
Viewing
Viewing a property is a crucial stage of buying a house. More often than not you will be able to tell within minutes of walking into a house whether you could live there. However, don't dismiss properties simply based on how they look or are decorated.
Be objective. It is important to see a property at least twice, preferably with a friend. Visit at different times of the day and week to build a picture of the neighbourhood. If you still like it, make an offer.
Making an offer
Obviously you don't want to pay more than you have to for a property but equally you don't want to insult the owners, or risk losing it, with a low offer. If things are selling fast and you feel the house is realistically priced, it is probably best to offer a sum close to the asking price. However, if the house has been on the market some time you could try offering a little less.
If your first offer isn't accepted and you are prepared to go higher, do try again. There is likely to be a period of negotiation before a price is agreed. Once your offer is accepted, ensure that you get it confirmed in writing by the estate agent, or vendor, if it is a private sale.
Nothing is legally binding at this point - your offer is subject to contract and a survey. Either you or the seller can pull out of the sale right up until the point when contracts are exchanged.
Next steps
The faster you can complete on the sale, the less chance there is of being gazumped (where another buyer outbids you). You need to:
o Inform your mortgage lender that you have found the house to buy. They will need to arrange a valuation as soon as possible
o Instruct your solicitor or conveyancer. Provide them with the address of the house you wish to buy, details of the vendor's solicitor and the details of your mortgage lender
o Choose and commission a survey
o Ask the agent to change the For Sale sign to Sold
Surveys
Prices vary substantially, starting at £100 and rising up to £1,000, depending on the property type and which survey you select. Always use a surveyor registered by the Royal Institution of Chartered Surveyors (RICS).
Legal advice & conveyancing
Conveyancing is the legal term for the process by which property ownership is transferred. Property conveyance will be done by a solicitor or a licensed conveyancer (you can do it yourself, athough you have to be organised).
Finding a conveyancer
When appointing a solicitor or conveyancer it is generally best to be guided by a personal recommendation. Failing this, contact the Law Society, The National Solicitors' Network or the Council of Licensed Conveyancers to find registered members.
Your solicitor or conveyancer is there to protect you from any legal obstacle that may prevent you from taking full, free ownership of the house that you are buying.
Exchange of contracts
Your solicitor/conveyancer must receive your finalised mortgage offer and a draft contract from the seller's solicitor before he can proceed. Once both parties are happy with the contract, identical copies are signed. The copy signed by you will be sent to the vendor's solicitor with your deposit. Your solicitor will then receive the vendor's contract. The exchange of contracts has now occurred and the sale is legally binding.
Make sure you are happy with the contract. Read the fixtures and fittings list carefully so you know what's staying and what's going - that way you'll avoid any nasty surprises on moving-in day.
Completion
The date of completion is agreed at the exchange stage. It can be the same day or months later. On completion, the balance of the purchase price is paid to the vendor and the deeds of the house are handed to your solicitor who passes them to your mortgage lender as security for the loan. You are now the legal owner of the property.