How to Buy a House in the United Kingdom: England, Wales, and Northern Ireland


Oct 16 | 7 minutes read
how to buy a house in the united kingdom england wales and northern ireland

Look for a home that fits your price range

Before you go out and look for houses or apartments to buy, you should determine how much you can comfortably spend on a down payment and monthly mortgage payments.

 

  • Step one:

Estimate the expenses

To avoid going into debt because you bought a home you couldn't afford, keep in mind the possibility that your income could drop or that interest rates could go up.

In addition to the deposit, you'll need money for things like mortgage fees (usually between £0 and £2,000) and Stamp Duty.

expenses estimating

 

Making the Best Mortgage Decision

A mortgage application is a time-consuming process, so it's good to give yourself plenty of lead time.

A mortgage can be obtained from a mortgage broker, a direct lender, or an Independent Financial Adviser (IFA).If you apply for a mortgage and it is accepted "in principle," you will be able to move on with the purchase of your home.

A lender's loan amount and interest rate are revealed here.To get the mortgage service you require, a booking fee may be charged. Common prices range from £99 to $250.

 

View your credit report

Examine your credit record for inaccuracies and your credit score before applying for a mortgage. It will be taken into account by potential lenders.

credit report

 

  • Step Two:

Make a Deal

Making an offer on a house is the next stage after finding one you wish to purchase, and this is often done with the help of an estate agent.

A real estate agent's fee is only incurred during a property sale. In most cases, the costs are between 0.5% and 3% of the selling price, including VAT.

 

  • Step Three:

Find a lawyer and a surveyor

A surveyor is hired to assess the worth of a property and identify any issues that might lower the property's value.

The property attorney or conveyancer is in charge of all the paperwork involved in the sale or purchase of a home. They will provide you an estimate and may want a down payment of 10% of their total charge. Normal pricing is between £500 and £1,500 + 20% VAT.

In order to determine whether or not there are any local or planning concerns that might negatively impact the value of the property, your lawyer or conveyancer will submit a series of queries to the relevant authorities. Standard pricing is between £250 and £300.

surveyor

 

Survey of Value

Lenders often need this survey before approving a mortgage to ensure the value of the property.

This survey is not comprehensive and will not reveal the full scope of potential maintenance and repair needs.

The average price ranges from £250 to £1,500.

Depending on the mortgage programme you choose, certain lenders may not impose a fee in this situation.

 

Surveying the property

Since you'll eventually own the land, it's in your best advantage to invest in a thorough assessment now. Renegotiating the cost is another possible outcome.

If the survey finds that the house needs £5,000 worth of renovations, for instance, you may propose a price reduction to the seller in that amount.


Several distinct survey formats exist, including:

  • The RICS condition report is the most affordable and simplest survey option (think "traffic light"). It works best with brand-new construction or typical houses that are otherwise in excellent shape. In this poll, we provide no recommendations or value. Cost: £300.
  • Buyer's report from the Royal Institute of Chartered Surveyors (RICS) is appropriate for typical homes in decent condition. This is an extensive assessment that examines the interior and exterior of a home in great detail. An estimate of value is also included. The going rate is often £400 or more.
  • A structural or building survey is the most in-depth inspection and may be performed on any kind of home. It's great for houses of any age, but especially those that may require maintenance in the near future. Normal pricing is £600+.

 

  • Step four:

Complete the mortgage and offer

You may wish to revisit the purchase price of your new house when the survey is finished.

This is due to two factors:

  • Your survey may reveal costly issues with the property. You may use this data to negotiate a cheaper price, since the lender's appraisal of the property may be lower than you expected. As a result, your offer will be lower than either the asking price or your initial target.
  • This is the part of the procedure that causes the greatest anxiety for most people. 

 

Reasons for delays and complications may include:

  • The bank rejects your application for a mortgage
  •  the seller pulls the property from the market
  •  the seller accepts a greater offer from another bidder (also known as "gazumping").
mortgage

 

When things go wrong, it's vital to talk things over

It's important to keep in contact with the seller through your lawyer and real estate agent if there are any issues. Keeping lines of communication open may frequently save a tense situation.

 

Completing the Mortgage Process

To go on, if everything has gone as planned, you should get in touch with your lender or mortgage advisor. To initiate the mortgage process, some lenders charge a fee.

This might be tacked onto the end of your mortgage, but keep in mind that you'll be responsible for the interest on this amount for the duration of your loan. In most cases, you may expect to spend between £1,000 and £2,000.

Your mortgage lender is required to give you at least seven days to consider whether or not this mortgage is good for you once you have received a firm offer.

You might utilize this time to look into other mortgage offers.

You may let the lender know in less than seven days if you're set on moving forward with this mortgage.


It's not too late to reconsider your previous decision

If you're worried about buying more than you can afford on a home, it's better to back out now than to make an ill-informed purchase later. You have the option to back out of the purchase and stop the mortgage application process at any time before the sale and purchase contracts have been exchanged.

However, depending on how far you've gotten, you may wind up losing part of your money.

 

  • Step five:

Trade Agreements

If everything goes well, you'll soon be receiving the contract to sign and finalising the transaction. Consult your attorney before signing the contract to ensure that it accurately reflects your intentions.

Verify that all of your questions have been addressed and that you are satisfied with what the sellers have agreed to leave in the property. Both you and the seller have shown your commitment to the deal at this point.

The vendor may additionally want a holding deposit of £500 to £1000 to demonstrate seriousness. Buildings insurance is required to protect the physical structure of the property once contracts have been exchanged.

Trade agreements

 

  • Step six:

Consequences and the final instructions

  • The remaining purchase price has been sent from your lawyer's trust account to the seller's lawyer's trust account. Telegraphic transfers will incur a charge. Usually, you should expect to pay between £25 and £50.
  • A mortgage account fee might be another expense. This fee covers the lender's costs associated with opening, servicing, and closing your mortgage account. If you add it to your mortgage, you'll have to pay interest on it for the life of the loan. The average price is between £100 and £300.
  • Pay your solicitor (after deducting any upfront costs, such as the deposit and local searches, that you may have already paid). The average price is between £500 and £1,500 + 20% VAT.
  • If you're purchasing real estate in England or Wales, your lawyer will handle the registration of the transfer of ownership with the Land Registry. Land and Property Services in Northern Ireland is where you'll go to register your property.
  • At closing, sellers must pay their real estate agent. Fees are normally a specified proportion of the final selling price, anywhere from one percent to three percent, plus twenty percent in value-added tax, as agreed upon in advance. There are no real estate commissions for purchasers.
  • In England and Northern Ireland, buyers of residential property have 14 days from the completion date to submit their Stamp Duty Land Tax Return and pay any outstanding taxes. As a rule, your lawyer will handle making these preparations. Land transaction tax must be paid in Wales.

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