The path to buying a house can seem like a very long road and is said to be one of the most stressful times of your life. Although there are many aspects to consider when buying a house, your solicitor should be there with you every step of the way to make you feel supported throughout the process.
What Are 5 Things to Know Before Buying a House?
1. Where Do You Want to Live?
The first thing to decide as a buyer is where you want to live, whether it is in a flat or a house, and which areas are most suitable for you.
2. How Much Deposit You Can Put Down
You cannot start seriously looking for a new home without first establishing what you can afford to spend on a property. Take a look at your finances and work out how much you can feasibly put towards your house deposit without breaking the bank. If you are selling another property, you may have equity that you have built up that you can put toward a deposit. It is a good idea to speak to your mortgage advisor or your current mortgage lender to ask what your options are once you sell your house.
If you are a first-time buyer, it may be that you have other available opportunities that can help you onto the property ladder including:
Setting up a Lifetime Isa: This can help you save up to £4000 each year and gain a 25% government bonus on your savings which you can use to help you save for a house deposit.
Family assist mortgage schemes: Many banks have introduced mortgages that can help first-time buyers get onto the property ladder by contributing an amount of money towards the home deposit.
Shared ownership schemes: This gives you the chance to buy a share (usually between 10%- 75% of the market value) of a property. This means that you own a partial segment of the home and then you pay rent to cover the rest of the share to the housing provider. You may have the option to buy more percentage shares in the property in future.
3. What Type of Mortgage Can You Get?
When you know how much money you have available for a deposit, you can start to speak to professionals and use online calculators to work out what type of mortgages you can realistically apply for. The best thing to do is to speak with your bank or a mortgage advisor who can help you work out how much you can borrow and the different mortgage products available to you. They will ask you a number of questions about your finances and your proof of funds.
You’ll need to provide information about how much you earn whether through employment or self-employment and any loans or debts you may have. Most lenders will do a credit check to make sure you’re suitable for a mortgage loan. Once you have gone through all the required questions, they’ll give you a decision in principle or an agreement in principle to confirm what they are willing to lend you. You can use this document to prove your ability to get a mortgage when you make an offer on a property.
4. Can You Pay the Costs Involved With Buying a House?
When you are considering buying a house, you’ll need to factor in other fees and not just how much your deposit will be. Buying a house can be a costly process and some people don’t think about the extra things such as:
- Paying for a survey of the property
- Legal fees
- Search fees that need to be completed by the solicitor
- Home insurance
- Moving costs such as delivery services, hiring a van, or renting storage space
- Paying for home improvements
- Buying new furniture
- Purchasing life insurance or critical illness cover
- Service charges and ground rent on leasehold properties
5. Which Solicitor Should I Use for the Purchase?
It’s beneficial to have a solicitor in mind or ideally, in place before you go ahead and make offers on properties. This is because the first thing the estate agent will ask you after an offer has been accepted is which solicitor will be acting on your behalf. So it’s a good idea to give yourself some time to research different conveyancing firms by looking at their websites, checking reviews, getting quotes, and contacting them to see how they can help you.
At Lyons Bowe we are here to help you and will update you regularly every step of the way. We have dedicated teams of legal experts who are on hand to answer any of your questions along the process.
What Is the Step by Step Process of Buying a House?
1. Welcome Pack
When you first instruct a solicitor, you will likely receive a welcome pack with all the documents you need to sign to begin the buying process. At Lyons Bowe Solicitors, we send all our clients a pack of comprehensive guides to help them understand each stage and our terms of business that you’ll need to sign to give us authority to act on your behalf.
We know that signing documents can be time-consuming and not everyone has access to physically sign paperwork. As such, we have a secure app that allows you to electronically sign your documents and return them to us easily and efficiently.
Inside our welcome pack, we’ll also send over our fee estimate which will outline our fees and any additional costs that may be incurred if more work is required. In addition, we’ll include the Memorandum of Sale confirming the details of the property you’re going to buy.
2. Draft Contract Pack Requested
After this, your solicitor will request a Draft Contract Pack from the seller’s solicitor. This is a collection of documents that give us important details about the property you’re going to buy so that we can do our property searches and checks. Typically, the pack will include the following documents:
The Title Plan: This will include information about the property including the registered owners’ names, the purchase price, the purchase date, and confirmation of whether it is leasehold or freehold. The title plans will also show the property boundary lines (which will appear in red) and any surrounding properties.
TA6 Form completed by the seller: The seller will complete the TA6 form with details about any disputes involving the property, guarantees, warranties, or alterations.
TA10 Form completed by the seller: The seller will complete the TA10 form so that you are aware of the fixtures and fittings that will be sold with the property such as curtains, radiators, boilers, fitted units, or garden furniture. If the home is a new build, the seller will need to get a copy of the Buildmark (NHBC) or the warranty and home policy documents.
TA7 Form completed by the seller: The seller will need to complete the TA7 form if the property is leasehold. They’ll need to detail information about the type of property it is, maintenance responsibilities and costs, alterations, and any rights to buy the freehold from the freeholder (landlord).
We usually expect the pack to take around 1 – 4 weeks to come back although this can vary. At Lyons Bowe, we chase the seller’s solicitor weekly to make sure that there are no unnecessary delays.
3. Draft Contract Pack Received
Your solicitor will let you know once the Draft Contract Pack has been received and the next step will be to order the property searches which are enquiries made to public authorities that give you more details about the property. If you use Lyons Bowe as your conveyancing solicitor, we’ll usually order your property searches on the same day that we receive the Draft Contract Pack.
4. Property Searches Ordered
Property searches, also known as property enquiries, are requests for further information about the property and the land surrounding it so that you are fully aware of what you are buying. We anticipate that it takes around 14-21 days for the enquiries to come back once they have been submitted to the local authority, but this can vary depending on the council. The searches usually include the following:
Local Authority searches: These include gaining information about the property such as any new plans for roads or traffic schemes. It will also include details about areas affected by Radon, building regulations, or contaminated land.
Water and Drainage searches: These will include checks regarding whether there are any public sewage networks in the area and if they run close to the property for instance.
Environmental searches: These searches relate to any environmental impacts such as landslides, subsidence, landfill contamination, or flood risks.
Mining searches: These involve checking whether there are any mine entries close to the property boundaries or mining hazards that may affect the property and any plans for coal mining in the area.
5. Legal Team (I’ll fill in)
6. Contract Enquiries Raised
The next step is for your solicitor to send any follow-up questions they may have about the Draft Contract Pack after reviewing it and receiving the property searches. Questions may be raised about any restrictive covenants, gas, water, and electricity servicing, or queries about the leasehold legalities. We expect the seller’s solicitor to respond to our enquiries within around 10- 15 working days, although this may depend on how much information they need to gather based on the questions posed.
7. Title Report Sent to You
The title report is the document that your solicitor will put together outlining all the results of the searches and checks on the property. This will be sent to you as soon as the information is available. You’ll have an opportunity to ask any questions about the report.
8. Search Report Sent to You
Once the property searches are complete, you’ll be sent all the results along with the title report which will summarise the key points of the searches. It’s your responsibility to thoroughly review the information and make sure you are happy to progress with the purchase and that there is nothing in the report that will affect your enjoyment of the property such as nearby Radon or building plans near the property. The report will usually detail the following:
- Local Authority Search
- Water & Drainage
- Environmental Report
- Chancel Repair Liability Insurance
- The enquiries that we have raised
9. Mortgage Report Sent to You
Your solicitor will review your mortgage offer document and come back to you with a summary of the mortgage conditions along with the mortgage deed which will need to be signed and witnessed and sent back to your solicitor.
10. Responses to Enquiries Received
After the responses come back on all the enquiries made throughout the process, your solicitor will advise you that the checks have been completed and all the responses are satisfactory. In this instance, if there are no further queries, your case will progress to the next stage.
11. Exchange and Completions Team (I’ll fill in)
12. Contracts Sent for Signature
Once the contract has been approved by the buyer’s solicitors and everyone is happy with the terms, all the enquiries have been returned and there are no more issues to resolve, the contracts can be signed by the parties involved and returned to their solicitors. Both you and the seller will be sent copies of the property purchase contract to be signed.
13. Contracts Returned
Once you’ve taken the time to read through all the documents your solicitors have sent you and you are completely satisfied with everything, you can go ahead and sign the contract and send it back to your solicitor.
14. Exchange has taken place
The exchange of contracts is one of the last stages of the purchase process which legally binds the transaction between you and the seller. At this stage of the process, neither party can pull out of the agreement without consequences. For you, if you pull out once contracts have been exchanged, you will lose your deposit because, at this point, you will have sent over your deposit money to your solicitor.
Exchange of contracts is where your solicitor contacts the seller’s solicitor to confirm that they have all the signed legal documentation and that the funds to complete the transaction have been safely received. Both solicitors will also agree on a date on which to complete the sale.
The exchange can happen between 7-28 days before completing the property purchase, but this can also happen on the same day as completion.
Completion is where the payment of your deposit is transferred to the seller’s solicitor and in return, the legal ownership of the property is transferred to you. You’ll be handed the keys to your new home once the sellers have moved their belongings out.
16. Property Registration
After completion, your solicitor will apply to the Land Registry to register you as the new owner of the property. After you’re registered, you’ll receive a Title Information Document confirming that you are the new owner of the property. This usually takes around 4-6 weeks to process.
What Do I Need When Buying a House in the UK?
When buying a house, you’ll have to provide certain documents to go through with the purchase.
Proof of Identity
You’ll need your passport or driving licence as proof of your identity before you can start the purchase process. Estate agents, solicitors, and mortgage lenders are all required to check your ID documents by law to protect against fraud and money laundering. In addition, you’ll be asked for proof of your current address. You can use a utility bill or council tax bill, but a mobile phone bill will not be accepted as legal proof of address.
Proof of Source of Funds
To prove that you have enough funds to pay for a mortgage, you’ll be asked for employment information including 3 months of payslips, your P60 form, or, if you are self-employed, an SA302 form. You’ll also need to provide your bank statements to prove that you have the full deposit amount to buy the property.
As soon as the property purchase is fully completed, you will need to have sufficient home insurance lined up. It’s good to shop around and check out the best insurance policies that are most cost-effective for you.
Many people take out life insurance to cover the term of their mortgage. This is a good idea if you have dependants and do not want to leave behind large debts that need to be paid to support your mortgage.
Critical Illness Cover
This is a good option for people who contract serious medical conditions and are unable to pay their mortgage repayments because they cannot work due to illness.
What Do I Need to Do After Buying a House in the UK?
Once the whole purchase process is complete and you have officially received the house keys, as well as celebrating your new home, there are a few other things you’ll need to do.
Read the Meters
The first thing you should do when you walk in the door to your new home is to check the meter readings to make sure that you’re only paying for the energy that you use and not the previous owner. You will then need to provide this reading to your new utility provider when you register.
Install Smoke Alarms
Remember to buy smoke detectors so that you are protected in case of a fire.
Make a Will
Buying a home is likely to be one of the biggest assets you’ll have. So it only makes sense to make a Will so that if you pass away, your home goes to the person or people you truly want it to.
Arrange Utilities and Internet
You’ll need to work out which internet, gas, electricity, and water providers you want to use and then you can register and set up accounts with those companies.
Contact Relevant Organisations
When you move home, it is important that you contact all the relevant organisations that need to know about your change of address, these could include the following:
- Utility companies
- Council tax
- Doctors, Opticians, dentist
- Vets – you may need to change your pet’s micro-chip information
- Mobile phone companies, TV and internet providers
- Electoral roll register
- HMRC- if you are self-employed
- Other insurance companies such as car insurers
Change Your Driving Licence
You’ll need to update your driving licence with the Driver and Vehicle Licensing Agency (DVLA) to make sure it is registered with the correct address. If you fail to do this, you could be liable to pay a fine.
Decide What Repairs and Refurbishment Need to Be Done
It’s likely that you’ll want to make your own mark on your new house, so make a list of everything that needs to be done and start working through it. This could include making big changes such as fitting a new kitchen or small tasks like painting the walls a different colour.