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So this is it. You’ve done it. You’ve managed to get a deposit together, signed on the dotted line with a mortgage provider and, cash in hand, you’re ready to buy your very first property. There’s nothing like the thrill of buying your very first piece of bricks and mortar, but don’t get too carried away; there’s a lot can happen between that first ecstatic viewing and actually getting the keys, so take note of our five top tips for first home buyers to make sure you get there in one piece:
Tip One: Check affordability
So you’ve found your dream house, but it’s just a bit over budget. You think you might be able to stretch a bit further, eat baked beans for the next year, walk to work and do all the decorating yourself, but beware. With all the uncertainty around interest rates, banks in some instances are refusing to lend to first-home buyers at all or, if they do, they’re only locking in interest rates for a limited time. If rates continue to rise, as they look likely to do so, your dream home could become a nightmare as your mortgage payments spiral. Work out how much, realistically, you can afford to spend on your mortgage before you head out on viewings, keeping in mind you’ll also have to cover council tax, insurances, utilities and food bills. Then make a budget and stick to it, no matter how tempted you might be. Buy from the head, not the heart.
Tip Two: Future-proof your investment
It’s impossible, of course, to predict what the future might bring. However, doing a little bit of smart planning before heading out to view prospective properties will help you to choose the best place for your needs now, and for the future. Some things to consider are: proximity to transit links, whether or not there’s scope to add value to the home, improvements to or new construction in the neighbourhood, and if there’s space to extend should you need to in the future. Moving is an expensive business, so choosing wisely with a thought to your future will ensure you don’t have to do it any more often than you need to.
Tip Three: Be aware of stamp duty
Stamp Duty is another cost you may have to take into account when buying a home. Stamp duty is a tax levied by the government on the sale of any residential property or land within the UK, and is calculated as a percentage of the purchase price, once that price reaches a certain level. While there is 0% stamp duty on primary residence purchases within England and Northern Ireland up to £250,000, in Wales it is 0% only up to properties costing £180,000, while in Scotland it is 0% on properties up to £145,000 in price. Once you purchase a property, you have to pay stamp duty within 14 days, so you’ll need to have that cash on hand.
However, it’s not all bad news! First-time buyers (defined as those purchasing their first primary residence) in England and Northern Ireland currently don’t have to pay stamp duty on purchases up to £425,000 (providing the property costs less than £625,000).
Tip Four: Get a structural survey
Once you’ve had your offer accepted, conveyancing begins. This is when the lawyers handling your sale check all documents related to the property for overlays, additional fees (such as chancel repair liability, a centuries-old fee whereby homeowners within the parish are liable to pay for the cost of chancel repairs – it can cost thousands of pounds, so is worth getting checked, and being insured against), and that the property is indeed as it’s been represented. It’s important to read over all documents in this process carefully, so you know what you’re getting into. Another thing that’s wise to do is to get a structural survey done, which is essentially an in-depth inspection of the property’s condition. A licensed surveyor will check for any visible structural defects, signs of damp etc. and provide advice on any issues with the building and grounds, as well as guidance on the repairs and maintenance required.
Tip Five: Be prepared!
Buying a home is possibly the biggest investment you’ll make in your life, and one that can be tied to a lot of emotion. But, until you complete the exchange and get the keys in your hand, there is always the possibility the sale could fall through, or you could be gazumped (where another buyer makes a higher offer after yours has been accepted, which the seller then accepts instead). Delays up and down the chain, issues turned up by conveyancing or a structural survey, or even a change in your own circumstances can lead to a sale being delayed or falling through. All being well, your sale will proceed without complication, but being prepared to deal with any problems that might arise will make the process a little easier.
And that’s it! To all of you about to take your first step on the property ladder, good luck, and may the best buyer win.