The decision of buying a home in the UK is a major financial decision. Understanding the home buying process poses an array of new complexities – from mortgages and surveys to solicitors and stamp duty.
Luckily, I have just gone through the entire process (with struggles and joy!), and hopefully I can explain the complex procedures in a simple way.
The major reason that I decided to buy a home was simple, I did not want to waste money on renting anymore. Rents in my city were pretty expensive, and landlords were often too busy to bother about fixing small things (not small actually, I experienced a giant flies infestation last year!) that significantly impacted my quality of living.
In this post, I’ll explain the key steps and considerations in the UK real estate market – from saving for a downpayment to handling conveyancing and completion. I aim to draw my personal experience to provide helpful perspective to you all for buying a home in the UK.
Table of Contents
Buying a Home in the UK: Financing
To buy a property, the most significant hurdle is to gather enough money into it. Depending on your family size and the city that you live in, what you are aiming for may have a drastic difference. For mine, property prices usually range from £200,000 to £500,000 – the lower end is for a smaller 2-bed house in slightly more deprived regions, and the upper end is 3 to 4-bed house in nice areas.
Cash-buyer or Not?
Now, you have to decide whether or not you want to pay in the full price, also known as cash-buyer in the UK. Apparently, if you don’t have enough savings, go straight to the mortgage route and don’t even think about this. However, if you have the money, why should you become a cash-buyer?
The major reason is that you can save a lot of time in mortgage procedures. This is not only beneficial to you, but also beneficial to the seller of your future house as this could speed up the process drastically.
Have you ever watched the famous BBC documentary Location, Location, Location? Securing an offer to buy a house is DIFFICULT. You need to compete with many different buyers, and being a cash buyer naturally grants you an advantage against other players. I made good use of this advantage and successfully took down my dream house!
Mortgaging
If you do not currently have sufficient money to pay for the full price of buying a home in the UK, or want to ease your financial tension by repaying a part of your salary monthly instead, mortgage is an ideal option.
Typically, mortgaging requires 10-20% downpayment. Say the full price of a house is £300K, you would need to prepare £30K if it requires 10% deposit. Then, depending on the interest rate and repaying terms, you would need to repay monthly to your chosen banks and building societies over a set period, say 25 years.
Mortgage can be further repayment mortgage or interest-only mortgage. The former involves repaying towards both your initial mortgage and interest, while the latter involves paying for interest only, then you would have to repay the entire sum of your housing price by the end of the set term.
Buying a home in the UK is complicated, and mortgaging is even so. Remember to compare the offers from different banks and building societies before you make a decision, then get your documents ready and complete your mortgage application before you start searching for a new home.
Offset the Cost
As you have seen, buying a property is extremely costly. What can you do if you haven’t got the required savings?
There are several options: Lifetime ISAs, shared ownership and family assistance.
Lifetime ISAs
I would only recommend lifetime ISAs to people that have lived in the UK for longer and had already started using it for at least a couple of years. In the UK, ISAs are special accounts that are tax-free. There are many types of ISA and lifetime ISA is one that you can save up to £4K a year and get an attractive 25% bonus from the government.
Essentially, when you deposit £4000 into your lifetime ISA yearly, the government adds £1000 into it! Unbelievable, isn’t it?
However, it does come with consequence. There are only 2 periods that you can take out money from this account: one is when you purchase your first property, and another is when you reach 60 or over. I highly suggest all to open this account as soon as possible and start depositing money into it before you buy your first property, as this could save you a lot!
Shared Ownership
Shared ownership, on the other hand, is another unique scheme which you can buy a percentage of a leasehold property, say 25-50% and pay rent on the remaining portion. There is a common misconception that you have to share and live with someone else in a shared ownership property, but this is WRONG! You live entirely within your own family and you simply have to pay rent for the portion that you haven’t owned.
By “staircasing”, you can gradually increase your shares of the house and eventually become the outright owner of it. A very good option for people with limited budget indeed!
Family Assistance
Finally, it comes without saying that you can ask your family to assist you in the purchase if they are happy to do so. However, they must gift the money formally by writing a gifted purchase letter as a proof, and the money must still come from your account during the purchase.
Finding the Right Area
Now, you have dealt with the financial aspect (which is often the most difficult and time-consuming!), it’s time to search in your local area for the perfect dream home.
When start searching, consider the followings:
1. Are you looking for a house or a flat?
In the UK, most people prefer to live in a house rather than a flat, but this doesn’t mean you have to do the same. A flat is perfect if you are living alone, do not want to manage a garden, prefer having a management company to deal with some boring stuff, and often it provides a higher return if you rent it out. Flats are often in leasehold, this means there might be additional risks when the leasehold term comes to an end.
A house is most suitable when you have a bigger family, enjoy spending leisure time in your garden and have no difficulties walking up the stairs. Houses are often freehold and you don’t have to worry about dealing with an extra landlord at all.
2. How many bedrooms and toilets do you want?
Ideally, you should have already had an idea during the financing stage, because the number of bedrooms significantly affect how much you need to pay. If you are a couple and is expecting to have children, you might want to have a 3-bed or even 4-bed house, this all depends on your need. And if you have more than two people in your household, you would definitely want to have more than one bathroom.
3. Do you need a parking space?
Driving is almost considered as essential in the UK, and it is common for each person in the household (except those under 16!) has their own vehicle. If you need at least one parking space, houses would automatically be more ideal than flats as you can usually park 1-2 cars in front of it, or you might consider a house with a parkway to accommodate extra cars.
As for flats, parking is usually more complicated. Some of them are associated with an assigned parking space outside the building which could solve your problem, but many require off-street parking. That means you need to apply a parking permit if you are to park in residential streets from your local council, and pay a sum for this.
There was a flat that I initially secured an offer but dropped out, simply because the local council told me that parking permit could not be issued for that flat because the developer had not reached an agreement with them!
4. What is your preferred location?
Are you working? Do you have children that is at schooling age? Do you want to live near a bus stop? Would you love to be able to walk to the nearest supermarket?
I’m sure you get what I mean. Commuting is extremely important in your day-to-day life, but a further distance can be managed if you drive. As I am still learning to drive, I struggle a lot just to get to my destination as it takes an hour a day to commute by bus, even when I live near the bus stop.
If you have or are planning to have children, your location will directly affect where they can study as well, as there is a “catchment area” that you must be in. You would want to live near the schools with better OFSTED ratings.
Most importantly, don’t forget about security! When I first searched for the properties, I always gave a perfect score to each property I see based on their interior decors, without taking their locations into their considerations. It was until I visited those places in-person that allowed me to know how dodgy the outside really were!
Check out for local forums, I used the Student Room to see where people comment as “nice” areas and “deprived” areas, which helped me eliminated huge loads of properties without even have to look at it. The property price tend to reflect a lot on its crime rates too, if an area is comprised of abnormally inexpensive properties, think twice before you get into it.
To get a better feel of the environment, pace and community before buying a home in the UK, go around target neighbourhoods at varied days and times.
Viewing a Property and Securing an Offer
Finally, you’ve narrowed down your options into several smaller areas. You then go to sites like Rightmove and Zoopla to search for those properties in the ideal area. You keep on emailing estate agents to express interest in properties that are located in your dream area with an appropriate size, and start receiving endless calls to book a viewing.
Booking a Viewing
In the call, estate agents are typically interested in a few screening questions to make sure that you are financially qualified:
- What are you buying the property for? Is it for self-occupation or investment?
- Are you a mortgage-buyer, first-time buyer or cash-buyer?
- Are you in chain? (i.e., are you looking to sell your own property in the same time?)
- Where are you currently living in?
- Of course, when are you available to do a viewing? You should prepare several options in the coming week so that the seller or the agent can choose
- Any questions from you: I typically ask whether this property is leasehold or freehold, if there is a management company what is the fee, and is there any maintenance required at the moment. Feel free to ask anything about the property.
Viewing
You now proceed to viewing the property, each viewing usually takes 15 minutes, and there are lots that you need to observe:
- Size – Evaluate room counts needed for your family or future plans. Are they as spacious as you expected?
- Layout – Favour open concept or prefer separations? Hallways vs galleries?
- Storage – Assess built-ins, closets, attic, and garage space. Do they suit your storage needs?
- Outdoor space – Are there any garden, balcony, or driveway? Have a look and check if they meet your needs.
- Heating efficiency – Does the property has double glazed windows? Where are the carpet placed?
- Accessibility – Stairs vs ranch? Wheelchair friendly? Consider long term needs.
- Leakage risk – Check for water damage by observing any suspicious water leak on the ceiling or the floor. Try to use all water pipes if permitted to see any issues with the water.
- Noise – Noise tends to be unavoidable if it is in close proximity to schools, pubs or railroads. Test at varied times of day.
Choose a property aligned with your lifestyle needs and priorities rather than just investment potential. This is your home first. Ask the estate agent to clarify if you have any questions.
Though you can usually get most of the information online before you go and view, there can be hidden problems left unaware. I viewed a flat that claimed it had an assigned carpark in its advertisement, but revealed that it didn’t really have one when I viewed in person!
Securing an Offer
When you view a property, you immediately know this is your call. Everything is perfect, it is located in your ideal area, has several parking spaces with a spacious garden, and has all the bedrooms you need. You start to imagine what it’s like living there for life…
Hey, don’t jump to that first. Now, you need to make an offer and compete with other potential buyers first!
I often try to push the estate agent to see if they can tell me about the ideal price that the seller really wants. As you might know, the asking price on the site is often overpriced. Sellers deliberately set it high to give you a negotiation space. You have to set your own price to give out the offer. But how much is actually too little or too much?
Setting Your Offer Price
If the asking price is £300,000, how much should you set in your offer?
a. £300,000
b. £280,000
c. £260,000
Which one would you choose?
Among the three options, I would say apart from a (which is exactly the same as the asking price), all of them make sense, as your price should depend on several factors:
- The market price of properties nearby (also consider their differences to the property that you are interested in, such as bedroom size, furnishings and decorations, upkeep, terraced vs semi-detached vs detached, parking availability)
- How much maintenance is required as from what you observed in the viewing (decrease the price if more maintenance needed)
- Are you planning to buy the furnitures from the seller directly? You can negotiate this by increasing the price
- Are you a more ideal applicant than most potential buyers? Being a cash-buyer and having no chain (not planning to sell your own house to buy this) are attractive factors to the seller and they may accept your offer even if you give a lower price
- How keen is the seller? (decrease the price if seller is very keen)
- How keen are you to buy it? (increase the price to boost your chance of success)
The process of making an offer to buying a home in the UK is like experiencing a roller-coaster. You adjust the price and have a psychological warfare with the seller and other potential buyers, then you should wait for a day or two for the estate agent to reply.
If you are the earliest person to give an offer and the price is within the seller’s acceptable range, your offer is very likely to be accepted. However, this is often not the case. My offers were rejected for several times and only secured an offer on the fifth property that I offered!
The agent might provide you with feedback afterwards, explaining why your offer was rejected. Don’t feel disappointed as there is always the next one that you feel good enough to give an offer again. Be prepared to get rejected for a few times before buying a home in the UK.
The Process of Buying a Home in the UK
Your offer is eventually accepted, it’s time to find a conveyancer and start off with the exciting (but boring) home buying process. The purchase timeline typically spans 3-4 months and this depends largely on the efficiency of your conveyancer, whether you are a cash-buyer, and if the property is part of a chain.
Hire a Conveyancer/Solicitor
The first step to kick off the purchasing process is to hire a solicitor or conveyancer. It is hard to identify a good solicitor or conveyancer, and both won’t necessarily make any difference in terms of efficiency.
I tried a conveyancer for the first time when I was helping someone else for the purchase, it provided me a fancy and modern portal which I could update and download documents from it at anytime. However, it forgot to send the stamp duty to the government which led to me receiving scary warning letters for several weeks afterwards.
Then, I decided to opt into a solicitor when it’s my turn to buy. Solicitor firms seemed more traditional and had no fancy portals to use, and I had to email them for every single query I had and download all the relevant attachments from the email. However, they seemed pretty reliable in the process, though its speed was similarly slow.
It is really up to you to choose which firm you want to hire for buying a home in the UK, compare the quotes before making your decision as they could differ greatly. You can also try the one that the estate agent suggest, but be careful as the estate agent is always acting on behalf of the seller, not the buyer, and you might want to hire a different firm just to make sure that your conveyancer/solicitor is acting on behalf of you fully.
Conveyancing
Once you have chosen your conveyancer/solicitor, you will typically need to submit a set of documents: proof of funds, identity and address proof and a questionnaire which you would state clearly your source of funding, purchase price, property to be purchased, estate agent details and whether or not you decide to perform environmental searches.
In the meantime, while both sides are still awaiting documents, you might also want to arrange surveying to do an inspection that identifies any structural or pest issues to inform your decision.
Though it is not a good practice to drop out after securing an offer, if the environmental searches or surveys reveal any major concerns, it is still vital to reconsider your options. You might lose your solicitor fee but that is better than purchasing a property that you would regret.
If you are applying for a mortgage, you should also get formal approval by your lender once your offer is accepted.
The conveyancing process is tedious and be prepared to undergo a decent amount of email and document exchanges in the process to clear up all the queries.
I also experienced extra stress in my purchasing journey as my estate agent started to send threatening emails to pressurise me after 4 months, claiming that the average sale lasted 3 months only in this area, and listed all the delays on our side throughout the process. My advice is to ignore these and treat them as strategies to push the sale to go through the process of buying a home in UK quicker.
Exchange and Completion
Once all queries are dealt with, and all necessary documents are ready, it’s time to exchange!
Exchange is a legally bound process, which you will be penalised if you drop out after this stage. You will have to complete a property deed, transfer agreement, and arrange the required amount to transfer from your bank to your solicitor.
As the amount to purchase a property is massive (especially if you are paying the full sum), make sure to inform your bank beforehand to see if you need to fill out extra forms to complete the transaction. My bank was completely fine with me after I filled out a remittance form online and send them by email. They called me to confirm before the money was sent out.
After the Exchange, there is really nothing that you can do! Take a little break from all the hassles and let solicitors of both sides get busy to check all the documents.
You will also typically set the Completion date before Exchange, it could be as soon as on the same day of Exchange, but some solicitors penalise if the gap between the two dates are too short. I chose to complete several days after the exchange just to make sure that the solicitors have more than enough time to check the documents.
As Complete Day approaches, it’s the big day which you will collect you keys from the estate agent. You finally succeeded in buying a home in the UK! Go and have a check of your property, make sure that it is in the condition that you approved with the previous owner.
The process to buying a home in the UK is extremely complicated, do lean on professionals like estate agents and solicitors with local expertise to ensure documents and finances are handled properly.
What You Need to Do After the Purchase
After buying a home in the UK, you should do the followings as soon as possible:
- Change the address of all your bank accounts, DVLA (for driving licenses), insurance companies, schools, employers, dentists and other places that might send you letters
- Inform the local council that you moved into this area and start to take up the council tax responsibility
- Apply for utilities, these include electricity, gas, water, and broadband
- Register for a GP nearby
Don’t worry if you don’t do all these on the first day of completion, as you can date back and pay for money that you should have paid starting from the completion date even if you apply them a few weeks later. The council and utility companies won’t chase you for money that the previous owner owes.
While local quirks take adjusting, take pride transforming a house into your home. If you are looking for renting instead, we have another dedicated post on the topic. Let me know how did you find the process of buying a home in the UK by commenting below!
