Buying a home
On this page:
Can you buy a property in
the UK? How much money do I
need? Arranging a
mortgage
What is Low Cost Home
Ownership? How do I find a suitable
property? Who will do the legal work?
Please be aware that this page contains basic information only.
More detailed information on buying a house can be obtained from
mortgage lenders like banks and building societies, or you can look
for advice on the internet.
Can you
buy a property in the UK?
This will depend on your immigration status. It is essential
that you check your status, as it may not qualify you to live in
the UK or for your right to purchase. If you are currently outside
the UK, you should contact your nearest British diplomatic post for
detailed advice about your rights to living and buying a house in
the UK. Contact details for all overseas posts are available from
the
Foreign and Commonwealth Office website.
If you are currently within the UK, please contact the Immigration and Nationality
Directorate for further advice.
How much money do I
need?
If you are thinking of buying a property you should discuss your
plans with a bank or building society. They will be able to give
you an idea of the amount they are prepared to lend you (your
mortgage), and the way in which you will have to pay it back.
Before finally deciding how much to spend on a property, you
need to be sure you will have enough money to pay for all the
additional costs. These include:
- survey fees
- valuation fees
- Stamp Duty Land Tax.
This is payable on properties costing more than £125,000 and is at
least 1% of the purchase price (in a limited number of areas,
designated as 'disadvantaged', it is only payable on properties
costing £150,000 or more)
- land registry fee
- local authority search
- fees, if any, charged by the mortgage lender or someone who
arranges the mortgage, for example, a mortgage broker
- solicitor's costs
- VAT
- removal expenses
- any final bills, for example, gas and electricity, from your
present home which will have to be paid when you move.
You should be aware that if you start the process of buying a
property and then the sale falls through you may have already paid
for a valuation and/or a survey. If the solicitor has started any
legal work you may also have to pay for the work done.
You should also take into account the running expenses of the
property you wish to buy. These may include:
- heating bills
- council tax
- water rates
- ground rent (if the property is leasehold)
- service charges (if the property is a leasehold flat)
- insurance costs (including life insurance, buildings and
contents insurance)
You will also have to pay a deposit on exchange of contracts, up
to 10% of the purchase price, a few weeks before the purchase is
completed and the money is received from the mortgage lender.
Carefully consider whether you can afford your mortgage payments
- not only now but also in the future. Always under-assess your
income and over-assess your outgoings.
Arranging a
mortgage
Timescales vary, but it should take about three weeks from your
application to the formal mortgage offer being made by the lender.
Whoever agrees to lend you the money will want to have the property
valued. This is to make sure that the lender could get the loan
back if for any reason you stopped paying your mortgage and the
house had to be sold again. The valuation will be done by a
surveyor on behalf of the lender but you will have to pay for this
valuation. The fee will be payable in advance, usually when the you
send a completed mortgage application form to the lender.
If the amount of money to be borrowed is more than a certain
percentage of the valuation of the property (usually 75-80%), your
lender makes it a condition of the loan that you take out extra
insurance to cover the extra amount. You pay a single premium to
your lender which is usually added to the loan. This is known as a
higher lending charge (or mortgage indemnity guarantee).
What is Low
Cost Home Ownership?
If your earnings are not enough for you to be able to buy a
property on the open market you may be able to purchase a home
under a low cost home ownership scheme. Locally these schemes are
run by District Councils and they enable you to purchase a 'share'
in a property and pay rent on the share that you do not own.
You can also access the Homebuy Scheme which operates
across Worcestershire
How
do I find a suitable property?
You should contact local estate agents, check the local press
and internet for details of properties within your price range.
When you have found a suitable property, make an offer through the
estate agent and get a 'Decision in Principle' document from your
lender.
Don't buy the first property you see. Get a feel for the prices
and standard of repair and try to buy a property that is in a
popular location - this will make it much easier to sell in the
future. It is common for a potential buyer to visit a property two
or three times before deciding to make an offer.
Who will do the
legal work?
The legal process of transferring the ownership of the property
from the present owner to the buyer is known as "conveyancing". You
should decide who you want to do the conveyancing work. You can do
it yourself – although this can be complicated – or you can use a
solicitor or a licensed conveyancer.
Before making a choice, you should find out the probable costs
of the conveyancing. It is important to contact more than one
solicitor or licensed conveyancer as there is no set scale of fees
for conveyancing. You should:
- check whether the figure quoted is a fixed fee or depends on
how much work is involved
- check that the figure includes stamp duty, search fees, land
registration fees, expenses and VAT and get a breakdown of these
costs
- find out what charges, if any, will be made if the sale falls
through before contracts are exchanged
For further advice on buying your own home, visit
http://www.adviceguide.org.uk/index/family_parent/housing/buying_a_home.htm.
