I am a first time buyer. Or rather I would be if I could buy anything. (Property this is) I am in a “great position” apparently because I have no property to sell.
We FTB’s are consistently told we’re the cornerstone of the property market because we help existing homeowners sell their properties and move up the property ladder, so we keep things ticking along.
Unfortunately, the home ownership gap has widened. Currently in the UK the difference of people wanting to own a house but who are unable to has reached five million. Not surprisingly, but unfortunately for me, London has been the worst affected place in the UK, with the majority of people renting here. Under half of properties in the city are owner-occupied. A terrifying stat indeed.
There is hope! The old UK government has put in place several schemes to help FTB’s and therefore excite the property market. These schemes are very confusing despite gov.uk’s best efforts. Make sure you read the ins and outs thoroughly.
I’m currently investigating them all and am leaning towards Shared Ownership as the best plan for me. The stats are daunting and a property search does take a massive effort but it’s my time. I am sick of being a renter, moving every 6 months and flushing my earnings down the proverbial toilet. I need to get my foot on the property ladder. I need a base. I want a solid foundation. I have moved to the UK and it is time to truly make it my home. I want a little corner to call my own.
So I am using this blog for good. I need to hash out some ideas and keep myself focused. So I am turning what I need to do into a top tips list for you all. Hopefully it succeeds for me and is helpful for you!
I struggle with this the most. I am annoyingly negative and never want to get myself too excited for fear of being let down. While this is sometimes good, you really must believe that despite a long hard search, you will find your home. IT WILL NOT BE PERFECT I have watched enough episodes of Homes Under the Hammer and Location Location Location to know that you cannot manage to tick all of the boxes on what is undoubtedly a very long property wish list, particularly on your first home. The home you find will be perfect for you now and perfect for your budget. You will make it yours, you will put your stamp on it and create amazing memories in it and that will make it your perfect first house.
Also be realistic in how much you make, can afford, can borrow. Most mortgage providers will lend around 3 times your annual salary. Bear this in mind BEFORE you start your search, so as not too be disappointed Do not spend hours on Rightmove looking at houses you can’t afford. Remember, there will be a house for you, in your budget, that you will love so be patient and try to enjoy the search.
Visit a few lenders’ websites and try their online mortgage calculators before you begin your search so that you can fix your budget. One lender may offer you more money than another but consider whether you will be able to meet their repayments! You can always use a mortgage broker, who can take some of the guess-work out of things, help you secure a lender and generally hold your hand through the process ( I need this). There is a one broker fee however and that cost needs to be factored into your overall budget as well.
Do Your Homework
If you know what to expect things will be a WHOLE lot less stressful. In particular, knowing how long the process will take. If you’ve been renting in London you know the rental market moves terrifyingly quickly. The housing market DOES NOT. Read the council website back to front, research local agents, your solicitor, and your mortgage broker. Read lots, ask questions and when you think you know it all, do it all over again.
Write a list of things that you require from a local area and property. Rank your property and neighborhood requirements and then let the search begin! Get on the web and also pound the pavement. Troll rightmove, firststeps and zoopla. Visit agents in the area you want to live in and see what’s on their books. Register with them so they know what you’re looking for. Then bug them. They will have loads of prospective buyers and you have to make sure they are prepared to work on your search with you. Contact developers and developments in the areas you are keen to move into. View as many properties as you can, internet pictures do not suffice! The homework and the search itself is a full-time job. Do not overwhelm yourself. It will not happen in a weekend. Ask for help from family and friends and don’t let it consume you or it will just get you down.
There are many different lenders, products, brokers and solicitors on the market. Don’t think that because your parents have always used a particular mortgage company or law firm that this will be the best decision for you. Shop around.
Location, Location, Location
Your quest begins, you’ve figured how much you can afford and borrow, you’ve scrimped and saved and wasted enough money renting. Where do you start looking? Pick the type of property you want, house, flat, semi, new, old, boat, caravan!
Now your biggest hurdle will be where you want to live! Pick an area you want to make your home, make sure you feel safe, happy and excited to be in your neighborhood. Pick areas that will hold or increase in value. It may be a tad rough now but if it’s nestled to a great hood it’s may be next in line for gentrification. You may have to consider what is more important to you – the type of property that you buy or the area where it is, but, never, never jeopardize your physical or financial safety!
There are other important factors to be investigated like local amenities and transport. Check how close the Tesco Metro is, where the doctor’s surgery is, best pub, nice restaurant to take your mum when she visits. This is your neighborhood make sure you know it and what you’re getting into moving there.
Check your commute and calculate your new transport costs! Make sure it’s a quick safe, well-lit route to your local bus stop or tube station. If you’re moving zones or switching from buses to trains calculate the added costs so you’re not surprised when your new monthly’s start going out!
Take an Old Hand With You
So you’ve found a flat to view, don’t go into it alone! Take your mum, dad, aunt, uncle, or close family friend. Take someone who has purchased a property themselves. You may have rose-colored glasses and be too wrapped up in the prospect of being a homeowner to see the faults of a property or to ask the hard-hitting questions that need to be asked. There will inevitably be questions and things to inspect in a property that will not occur to you when you go to see it the first time. You need not find a property mogul. Just seek sound honest advice from someone experienced and that you can trust.
If you are unable to take somebody with you on the first occasion, try to book a second viewing. At the very least, you will need to make a second viewing on your own as, in the excitement of the first viewing, important questions will be forgotten.
Ask the Right Questions
Make a list of questions/things to check before your visit if you think you might forget anything.
Ask about monthly bills, maintenance fees, the area, transport, council tax and any other hidden niggly bits!
Remember to ask what the property will be left with by the seller on completion and included in the sale price. Some sellers may fail to mention that the fitted appliances in the kitchen and window dressings will be moving with them to their new property. Imagine the hassle (and disappointment) of turning up excited to your first house to bare windows and a hole where your dishwasher had been.
If you’re not sure about something ASK. Remember your are in a storing position as a first time buyer the seller may be willing to leave certain items in the property if you ask.
It’s Not Just Deposit and Mortgage!
There are more additional fees involved in buying a home then I would care to remember But remember you must. It will affect whether the property is within you budget.
- Stamp Duty Land Tax, or SDLT or just Stamp Duty. Is a terrible and inexplicable tax you must pay when purchasing a property valued over £125,000.00. For properties above this threshold, stamp duty is charged at 1% of the property price. So if you find at a property at £125,500, remember that you will have to pay a further £1,255 to cover the stamp duty.
- You will have to pay for property searches even with a new build. The basic property searches will usually set you back around £200.
- If you are taking out a mortgage your lender will want you to get a valuation of your new home to check that it is worth the money that they are lending you. The basic search valuation will cost around £150.00.
- Legal fees! Your solicitor is most likely to want paying at the end of the transaction. Does the quote that your conveyancing solicitor has provided include a detailed breakdown of all the extra fees applicable to your transaction? If not, GET ONE!
- The dreaded council tax! What band does your dream property fall within? Check the local council website or ask the existing owner or property agent.
- If you only have a tiny polo or you can’t bribe enough people with pizza and beer, you will need movers. Moving costs are an inevitable and often overlooked cost you need to factor in. How much will the removal van charge you?
- BILLS! Gas and electric, cell phone, Sky (if you’re lucky), internet, insurance. The list is unfortunately endless and needs to be factored in before committing to a property.
- You’re in your flat! You love it, but it could do with a lick of paint and you’re sleeping on the floor… Remember you are going to want to set up house and put your stamp on the new home you have scrimped, saved, cried, screamed and cursed for. It is the BEST PART but easily one of the most costly. Make sure you have budgeted for several Ikea trips and few splurges at John Lewis, also some cans of paint from B&Q.
This list is hardly comprehensive as I’m a first timer and there is much I need to learn. I am fortunate to have a team of experienced family and friends helping me and even then it’s very stressful and I’m finding it hard to take my own advice. I hope this list helps you just a little. It certainly helped me clarify my goals, just by writing it down. I am currently trying to view as many properties as possible. I have however, found what may be my perfect flat so keep your fingers and toes tightly crossed for me.