Buying your first home is a big decision and a major life milestone, but it can also be a daunting and stressful process.
If you are not familiar with the steps involved in the process of buying property, you could be creating issues and face the prospect of being hit financially.
Here, the Propertyroad.co.uk team will guide you through the steps to buying your first home in the UK and offer some tips to help you along the way.
Like everyone else lucky enough to be on the property ladder, our journey started with buying our first home. Where relevant, we’ll include our own experiences to give you more context and insight.
Step 1: Save for a deposit
The first of the steps to buying your first home in the UK is to save enough money for a deposit. A deposit is the amount of money you pay upfront when you buy a property, and it usually ranges from 5% to 20% of the purchase price.
The larger your deposit, the lower your mortgage interest rate and monthly repayments will be – as a first-time buyer, this is a great incentive.
However, in our experience, saving for a deposit can take time and discipline. So, you should start as early as possible and set yourself a realistic financial goal.
Some tips to help you save for a deposit include:
- Check your credit score! A good credit score improves your chances of getting a favourable mortgage deal. Check your credit report, address any issues and maintain good financial habits
- Open a savings account that pays a high interest rate and has no withdrawal fees
- Set up a direct debit or standing order to transfer a fixed amount of money from your current account to your savings account every month
- Cut down on unnecessary expenses and track your spending habits
- Use a budgeting app or tool to help you plan and manage your finances
- Consider using a government scheme such as Help to Buy, Lifetime ISA or Shared Ownership to boost your savings or reduce the amount of deposit you need.
There are some good tips here, and the budgeting app will be indispensable if you are dedicated to saving and want to know what you are spending your money on!
The first tip to check your credit score is vital because it will highlight whether a lender will see you as creditworthy. If not, you will need to take specific steps to improve your credit score.
It’s also a good idea to work out how much you could potentially borrow (see more on this in the next step) because this will highlight how much you will have to save and how long it will take you.
When we were buying our first home we started by making sure our credit report was up to scratch. That actually meant taking a credit card out and paying off the balance each month in full just to show we could handle being given credit.
After a few months of doing that, and several years of saving up (with the help of a side hustle), we eventually had a good enough deposit and a credit report to look at taking a 90% LTV mortgage.
Step 2: Find out how much you can borrow
Up next in the steps to buying your first home in the UK is to find out how much you can borrow from a mortgage lender. A mortgage is a loan that you use to buy a property, and you pay it back over an agreed period, usually 25 years.
The amount of mortgage you can get depends on various factors, such as:
- Your income and outgoings
- Your credit score and history
- The type and term of the mortgage
- The interest rate and fees
- The value and condition of the property.
To find out how much you can borrow, you can use an online mortgage calculator or speak to a mortgage broker or adviser.
Lenders have different criteria – some will offer up to 90% of the purchase price, which means you will need a 10% deposit. On a home costing £200,000, you’ll need to save £20,000 – and that doesn’t include the other fees that we will come on to.
Be aware that 100% mortgages are rare – and if you do find one, you might find it much more expensive than, say, a 90% mortgage.
There’s also an issue with how much a mortgage lender will offer. Most will offer up to 4 or 4.5 times your income. Others might offer more (some lenders offer seven times your salary), while others might offer less.
This puts first-time buyers at a disadvantage because it means they have to save more for a deposit because house prices have rocketed in recent years.
We recommend you also shop around and get quotes from multiple lenders before you apply for a mortgage, but this can affect your credit score.
One thing we did 6 months before we applied for an agreement in principle was cancel any unnecessary outgoings. Sky Sports got cancelled along with any gambling-related expenditure such as our National Lottery subscription and occasional flutters on the football.
This helped to minimise our expenditure and reduce our perceived risks to lenders, giving us a greater chance of being accepted for a mortgage.
The different types of mortgage
We should also highlight that you must understand the different types of mortgages that are available. These include:
- Fixed-rate mortgages– the interest rate doesn’t change for the duration of the mortgage
- Variable-rate mortgages – the payments will vary depending on which base rate the mortgage is tracking
- Tracker mortgages – similar to a variable rate mortgage, usually ‘tracks’ the Bank of England’s base rate.
- Discount rate mortgages – the lender will offer a discount on its standard variable rate for a length of time. This could last for up to three years, so they are worth checking out.
- Standard variable rate mortgage– this is the lender’s basic interest rate, and fixed-rate mortgages that end will usually move to this one.
Each mortgage comes with its own pros and cons, so choose one that aligns with your financial goals.
However, you should make an effort to get pre-approval from a lender because this gives you a clear idea of your budget and shows sellers that you’re a serious buyer.
And don’t forget to shop around – that means you shouldn’t settle for the first mortgage offer you receive. You should compare rates, terms and fees from different lenders to find the best choice for you.
When we were buying our first home we found that mortgage advisors were a great help as they helped us understand the process, as well as helping us find the best deals.
Step 3: Search for a property
Once you know how much you can borrow, you can start searching for a property that suits your needs and budget. There are many ways to search for a property, such as:
- Browsing online property portals and websites
- Registering with local estate agents and letting them know your preferences
- Visiting property fairs and exhibitions
- Asking friends, family and colleagues for recommendations
- Driving or walking around the areas you are interested in.
When searching for a property, you should consider various factors, such as:
- The location and neighbourhood
- The size and layout
- The condition and maintenance
- The energy efficiency and environmental impact
- The amenities and facilities nearby
- The transport links and accessibility
- The potential for price growth and resale value.
You should also do some research on the local property market and trends, such as the average prices, demand and supply and recent sales. This can help you negotiate a fair price and avoid overpaying.
Another trick is to drive around the area at various times, including at night, to see if there is any anti-social behaviour.
The other issue is to consider the quality of schools in the local area whether you have children already or might do in the future.
The best advice we can give you based on our experience is to try and stay as flexible as possible. We knew we couldn’t afford a detached property or one with a big garden, even though we would have loved both.
However, by compromising on location and choosing a property next to a busy road, we were able to get a much larger semi-detached property that we could have afforded otherwise.
Our view was that the first home is just a stepping stone. We always knew as soon as we could afford to, we would move on to a bigger and better home. Once we were on the property ladder we could stop throwing money away on rentals and benefit from any increase in the property prices.
So, we were very conscious that our first home just had to be ‘good enough’ not ‘perfect’.
Step 4: Make an offer
Once you find a property that you like, consider making an offer to the seller’s estate agent. If they aren’t using an agent, then the offer will be made to the seller. An offer is a formal proposal that states how much you are willing to pay for the property, subject to contract and survey.
You can make an offer verbally or in writing, but it is not binding legally until both parties exchange contracts. Some tips to help you make an offer are:
- Be realistic and respectful. Don’t offer too low or too high, as this can offend the seller or put you at a disadvantage
- Be flexible and open-minded. Don’t be too rigid or stubborn, as this can cause delays or disputes
- Be prepared and confident. Have your mortgage agreement in principle ready, as this shows that you are serious and credible
- Be quick and decisive. Don’t hesitate or procrastinate, as this can make you miss out on a good opportunity.
The seller can accept, reject or counter your offer, depending on their situation and expectations. You may need to negotiate with them until you reach an agreement that both parties are happy with.
We found the negotiation process a little daunting on our first purchase. However, we realised that we were actually in a strong position. First-time buyers with a mortgage agreed in principle are very desirable to sellers as there’s more chance you’ll complete the purchase.
So, we made sure to use that to our advantage and emphasise that whenever we spoke to an estate agent. There’s no doubt we would have struggled to secure our property for around 25% less than the asking price if we hadn’t of been first-time buyers. Use it to your advantage!
Step 5: Arrange a survey
After the seller accepts your offer, we suggest that you arrange a survey to check the condition of the property. A survey is an inspection that identifies any defects or issues with the property, such as structural problems, dampness, pests, asbestos or fire hazards. There are different types of surveys available, such as:
This is the most basic type of survey, which only confirms the value of the property for the mortgage lender. It does not provide any detailed information about the condition of the property, and it is usually included in the mortgage fee
This is a more comprehensive type of survey, which covers the general condition of the property and highlights any major or urgent repairs needed. It also includes a valuation and an insurance reinstatement figure, which is the cost of rebuilding the property in case of a disaster.
This is the one we opted for on our first home. Having never had to deal with the maintenance of a property before we found it reassuring to know someone who is trained to spot issues had checked everything out.
While they spotted a few minor issues, it gave us a ‘job list’ of things we needed to see to as well as the cosmetic things we had identified ourselves. It was a massive help to us.
This is the most thorough type of survey, which covers the full structure and fabric of the property and provides a detailed analysis of any defects or issues. It also gives advice on how to fix them and how much they might cost.
It does not include a valuation or an insurance reinstatement figure, but you can request them separately.
The type of survey you choose depends on your budget and the age, type and condition of the property.
You should ALWAYS get a survey done before you exchange contracts, as this can help you avoid any nasty surprises or costly repairs later.
Step 6: Hire a solicitor or conveyancer
Another important step to buying your first home is to hire a solicitor or conveyancer to handle the legal aspects of the transaction. A solicitor or conveyancer is a professional who deals with the transfer of ownership and registration of the property, as well as other matters such as:
- Checking the title deeds and land registry records
- Conducting local authority and environmental searches
- Drafting and reviewing contracts and documents
- Liaising with the seller’s solicitor or conveyancer
- Arranging the payment of stamp duty and other fees
- Exchanging contracts and completing the sale.
You should hire a solicitor or conveyancer as soon as possible after your offer is accepted, as this can speed up the process and avoid any delays or complications. You should also shop around and get quotes from different firms before you choose one, as their fees and services may vary.
As we had never dealt with solicitors before, we used the solicitors recommended by the vendors estate agent on our first purchase. While we had a good experience, in hindsight we should really have shopped around a bit to see if we could get an equal service for a better price elsewhere.
However, that first property purchase is always daunting and there’s a lot happening so sometimes it;s just best to go with whatever feels the most comfortable.
Step 7: Finding a removal firm
This is also the step in the house-buying process that you should consider finding a removal firm. If you are moving at a busy time, you will find they will be booked up – you might be lucky to find a firm at the last minute, but don’t bank on it.
Moving house can be stressful. It is said to be one of the most stressful experiences in life, but hiring a removal company can make it easier.
That said, we found that of all the moves we have done since, the best time to consider saving some money by hiring a van and moving yourself is the purchase of your first home.
Once we bought a home, we found we started filling it up with furniture and other belongings. Therefore, by the time we moved again, we had too many things to consider moving ourselves.
So your first purchase is usually your best chance to save some cash by moving yourself. As a good half-way house, you could do what we did – hire a ‘man with a van’. As our first-time purchase wasn’t too far from where we rented we overlapped our rent with when we took ownership of the property.
That allowed us time to ferry back and forth between the two properties, loading the car up with all our clothes, DVDs, and other smaller items.
Then, we just hired a man with a van to move the larger items like the wardrobe and sofa. This kept our costs to a minimum and meant we could take our time to move in over several days.
Of course, that option isn’t right for everyone so here are some tips on how to choose the right removal firm if you can’t avoid using one…
The sooner you start looking for a removal company, the more options you will have. You can compare quotes, check reviews and availability, and book your preferred date.
Make sure the removal company you choose is registered with a trade association, such as the British Association of Removers or the National Guild of Removers and Storers. This means they follow a code of practice and have insurance cover.
Get multiple quotes
Don’t settle for the first quote you get. Ask at least three different removal companies for a written estimate and compare what they offer. Consider the price, the service, the reputation and the extras.
Before you hire a removal company, make sure you understand what they will do and what they won’t. For example, will they pack and unpack your belongings? Will they dismantle and reassemble furniture? Will they provide boxes and packing materials? Will they charge extra for stairs, parking or delays?
Read the contract
Before you sign anything, read the contract carefully and make sure you agree with everything. Check the contract’s terms and conditions carefully, especially the cancellation policy, the insurance details and the complaint procedure. If you have any doubts, ask for clarification or seek legal advice.
Step 8: Exchange contracts and pay the deposit
The penultimate phase in the steps to buying your first home in the UK is to exchange contracts and pay the deposit. This is when both parties sign and swap their contracts, which contain all the terms and conditions of the sale.
This is also when you pay your deposit to the seller’s conveyancer or solicitor, who holds it in a secure account until completion.
Exchanging contracts will be legally binding and means that both the seller and buyer are committed to the sale and cannot back out without facing serious consequences.
You should only exchange contracts when you are absolutely sure that everything is in order and that you are ready to proceed.
Not agreeing on the contracts means you will still have to pay the solicitor.
If the house sale falls through AFTER the contracts have been signed, then the party not at fault will keep the deposit.
This can always be a scary time as a first-time buyer as you’ll probably never make a bigger purchase in your life than buying a house. However, we found talking to our solicitor gave us lots of reassurance and you should never be afraid to take their advice.
Step 9: Setting up your utility bills
Along with the excitement of buying and moving into your new home comes the joy of setting up your utilities. You will need:
Then you will have to pay council tax and have an internet connection. Here’s our quick guide to setting up utilities:
Find out who supplies your gas, water and electricity
You can do this by asking the previous owner or the estate agent, or by checking the meters for any labels or stickers with the supplier’s name and contact details. Alternatively, you can use the Energy Networks Association to find out your suppliers.
We found the Property Information Form the seller completes (your solicitor should provide you with a copy) was invaluable for this. If it’s like ours was, you’ll have all the details of the suppliers of gas, electricity, and water.
We found it was easiest just to stick with the same suppliers to begin with as you won’t know how much energy you’ll use – especially if like us you’re moving from a small flat to a larger house.
However, after 6-12 months we re-assessed our energy usage to check we were on the best tariff and using the best energy supplier for our level of usage.
Contact your suppliers and give them your details
You’ll need to provide them with your name, address, phone number, email address and the date you moved in. You’ll also need to give them your meter readings, which you should take as soon as possible.
We found with everything else going on, we didn’t have time to provide the reading straight away. However, we took a photo of the meter (ensuring the necessary readings were visible) so we could provide it once we were settled.
Don’t forget to also take a meter reading on the day you move our of your previous property if you’re renting.
This will ensure that you only pay for the energy you use and not the next or previous owner’s usage.
Compare energy tariffs and switch if you want to save money
You don’t have to stick with the same supplier as the previous owner, and you might be able to find a cheaper or greener deal elsewhere.
You can use a comparison website like Uswitch or MoneySuperMarket to compare different tariffs and see how much you could save by switching.
As we say, we found it was better to do this after 6-12 months once you had a better idea of your actual energy usage in your new home.
Set up your account and payment method
Once you’ve chosen your supplier and tariff, you’ll need to set up your account and choose how you want to pay for your energy. You can usually pay by direct debit, which is often the cheapest option, or by prepayment meter, which lets you pay in advance for your energy.
You will also need to arrange:
- Home insurance: This covers the cost of repairing or replacing your home and belongings if they are damaged or stolen. You need buildings insurance if you have a mortgage, and contents insurance is recommended.
- Council tax: This pays for local services like rubbish collection and street lighting. The amount you pay depends on the value of your property and where you live.
- TV, broadband and phone: This covers the cost of entertainment and communication services. You can compare deals and bundles to find the best one for you.
- Maintenance and other costs: This includes things like repairs, gardening, cleaning and decorating. The amount you spend on these varies depending on your needs and preferences. You should budget around 1-2% of your property value per year for maintenance.
On top of buying a home and arranging to move in, these extra tasks do appear to be onerous to first-time buyers – but they need to be arranged.
The cost of maintenance is another issue that not many homeowners appreciate. Items will break down; boilers will need replacing, and you’ll need the money to pay for them.
We found setting up a direct debit into a savings account to cover bills plus some extra for unforeseen expenses is a good strategy to help with this.
Step 10: Complete the sale and move in
Completing the sale and moving in is the final stage in the steps to buying your first home in the UK. You will pay the remaining balance of the home’s price to the seller’s conveyancer or solicitor, who then transfers it to the seller and releases the keys to you.
This is also when you receive the title deeds and land registry documents that prove that you are the legal owner of the property.
Completing the sale usually takes place on a pre-agreed date, which can be anywhere from a few days to a few weeks after exchanging contracts.
You should arrange for your removal company or helpers to transport your belongings to your new home on this date and make sure that you have all the utilities and services set up.
We found moving day was both nerve-wracking and exciting all rolled in one. The moment we picked up the keys was only trumped by the moment we walked in the door of our first home, for the first time.
The feeling of buying your first home will stick with you for a long time!
Step 11: Moving in day!
We looked at finding removal firms earlier, but now it’s time to move into your new home.
For many people, moving day can be stressful, but with some planning and preparation, you can make it easier.
It’s a good idea to declutter before you pack. Get rid of anything you don’t need or use.
Don’t leave everything until the last minute! Pack non-essential items first, such as books, clothes, and decorations, and label the boxes clearly. Keep a box of essentials handy, such as toiletries, medication, and phone chargers. And tea bags and mugs!
It’s also a good idea to protect your valuables, so keep your jewellery, money, laptops and other valuable items with you or in a safe place.
As we say, we were in the position where we could start moving things to the new home over several days as we kept our rented flat on an extra week after completion. This took a lot of stress away and also gave us time to get some jobs done around the house before it was full of our furniture!
If you have pets, remember they might be stressed too. If someone could look after them until you unpack, that would be a great help.
Once you have settled in, take some time to relax and celebrate your successful move. You can also explore your new neighbourhood and meet your neighbours.
Steps to buying your first home in the UK
Congratulations! You have just bought your first home in the UK!
We hope that our experiences and the tips we have shared in this article have helped you understand the steps involved and given you the confidence to go ahead and buy the first home.