5 Steps to Help You Buy Your First U.K. Property
The latest statistics have reported that in the UK, 52.8% of families are homeowners. For anyone in the UK looking to purchase a residential property, it is essential to accurately follow all the steps involved. Purchasing a residential property in the UK can take approximately 3 months.
Follow the steps delineated as follows to buy your first UK property:
Step 1: Make an offer
An essential part of making an offer is to understand how much money you can afford to pay. This is pivotal to ensure that the process of buying a house is hassle-free and fast.
Thus, estimation of the buyer’s finances is imperative. After the financial estimation is complete, make the offer. To buy a UK property, the offer can be made by the buyer verbally or in writing. The buyer can make the offer directly to the private seller or indirectly via the appointed estate agent. However, if the property of interest is in Scotland, the offer will have to be made through a solicitor. When making an offer, the buyer can offer either over or under the asking price when bidding. A positive fact to note here is that UK properties do tend to get sold at a price lower than the asking price.
Step 2: Hire a solicitor
The legal work involved in the process of purchasing a property in the UK warrants the involvement of a solicitor. Legal advisors and solicitors can be found and appointed through the Law Society. The solicitor will be the buyer’s representative during the process of purchasing the property of interest. Solicitor fees typically range between £500-1500 plus VAT for property sales duties. A solicitor is also responsible for identifying any planning-related issues that may impact the value of the property of interest.
Step 3: Get a valuation survey of the real estate property
A valuation survey of the property is typically arranged by the mortgage lender. However, the buyer should commission a survey of the property with repair costs and maintenance charges taken into consideration. The survey, although a paid service, is important as it can save the buyer considerable future expenditures. It is also valuable for identifying potential issues of the property. If issues have been detected, then the buyer can reduce their initial offer. Three types of valuation surveys should be considered. These are the RICS homebuyer report (£400), building or structural survey (£600), and RICS condition report (£250).
Step 4: Finalize your offer as well as mortgage
If the buyer has applied for a UK mortgage, it is best to renegotiate the offer if the valuation survey indicates that the price of the property is lower than the asking price. This is important because the mortgage provider may reduce the amount they are willing to lend to the buyer. After the negotiations have been completed, make the final offer. If it is accepted, the buyer must pay the deposit. The mortgage has to be finalized after that. It’s also important to note that this is the buyer’s last opportunity to pull out of the property sale.
Step 5: Contract exchange followed by sale completion and final arrangements
This is the step wherein the contracts for the property sale are exchanged and signed. The money is then transferred from the buyer’s solicitor’s account to the mortgage provider’s account. Then the money is transferred from the mortgage provider’s account to that of the seller’s solicitor’s account. However, the buyer must verify that the contract includes details such as sale conditions and completion date before signing. After the monetary transaction has been completed, the buyer will get the keys to the property. The buyer must then pay outstanding mortgage fees (if any) as well as the solicitor’s fees. This sale must be registered with the Land Registry by the solicitor. Stamp Duty should also be paid at this point by the solicitor.
A survey by Statista reported that the mortgage rate (10-year) in the UK as of September 2021 is 2.6%. Therefore, this is a great opportunity for individuals in the UK to buy their first property.