Buying a home
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
- 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 Herefordshire Council and they enable you to purchase a ‘share’ in a property and pay rent on the share that you do not own. Most low cost home ownership schemes give priority to existing housing association tenants, and to be eligible for all schemes you will need to be registered with Home Point Herefordshire.
Home Point act on behalf of Herefordshire Housing, four other local housing associations, and Herefordshire Council by holding a central housing register and advertising all the vacant properties of the partner landlords.
Home Point Herefordshire
135 Eign Street
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.