The stress stems from different aspects of the process: finding the right home at the right price, dealing with solicitors and paperwork, juggling your work and personal life while organising the move, and the emotional turmoil of making such an important commitment.
Take a deep breath and read on to discover the five aspects to figure out to make buying your first home a smooth experience.
Are you ready to buy a home?
Before you start viewing properties, it helps to check you’re financially and emotionally ready to take on the commitment of homeownership.
- Financial readiness: Can you comfortably afford the monthly mortgage payments (and still have room in your budget for essentials and savings)?
- Debt check: Do you have outstanding debts that could affect your credit score or reduce how much you can borrow? Clearing debt first can improve mortgage affordability.
- Deposit saved: Have you saved a deposit, usually at least 10% of the property value. If buying through Shared Ownership you will only need a 10% deposit on the share you are buying.
- Added costs covered: Have you budgeted for extra costs like stamp duty, council tax, legal fees, surveys, mortgage fees, moving costs, and ongoing maintenance or repairs?
- Shared Ownership awareness: If you’re buying through Shared Ownership, do you understand that your deposit is based on the share you’re purchasing (often meaning a smaller upfront amount)?
- Job and income stability: Do you feel secure in your current role, or have a realistic back-up plan if your circumstances change?
- Relationship security (if buying with a partner): Are you confident you can make long-term financial decisions together and support each other through the process?
- Ready to settle: Can you genuinely see yourself living in the area for at least the next five years, with the amenities and lifestyle you want nearby?
- Lifestyle fit: Does homeownership suit your lifestyle right now (space needs, work-from-home plans, family plans), and are you comfortable with the responsibilities that come with it?
1. Save up for your deposit before buying your first home
Saving for a deposit is a crucial first step in buying a home. Begin by setting a realistic deposit amount based on the price range of homes you're considering and any down payment requirements from lenders.
Create a budget that outlines your income, expenses, and savings goals, and identify areas where you can cut back or save more.
Consider setting up a separate savings account specifically for your deposit to help track your progress and prevent the temptation to dip into it for other expenses.
The lowest deposit required to qualify for a mortgage usually ranges from 5 to 10% of the total value of the home you want to buy.
However, it is important to save more than the deposit you are putting down to cover any expenses in case your circumstances change suddenly.
You can also look into getting a lifetime ISA like our homeowner, Anastasia. The young professional was able to boost her savings with this government-backed savings account.
Bear in mind that when buying through Shared Ownership, you only need a deposit for the share of the property you are buying. This makes the deposit much smaller than buying outright, and can be as low as £8,000.
2. Understand the mortgage process
Getting a mortgage involves several steps, starting with assessing your financial situation.
Lenders will look closely at your income, credit score, employment history, and debt-to-income ratio.
To increase your chances of approval, aim to improve your credit score, minimise existing debts, and save for a down payment.
Research various lenders and mortgage products to find the best fit for your needs. Once you've chosen a lender, you'll need to complete a mortgage application and provide supporting documents, such as pay stubs, tax returns, and bank statements.
Working with a mortgage broker or advisor can streamline this process and help you navigate any complexities.
Most lenders use a debt-to-income ratio to determine how much you can afford to borrow.
This ratio compares your monthly debt payments to your gross monthly income. Typically, lenders prefer a debt-to-income ratio of 43% or lower, although some may accept higher ratios under certain circumstances.
To give you a rough estimate, you can use an online mortgage calculator to find out how much you could be able to borrow.
We always recommend you talk to a mortgage advisor to help you understand your options. They can assess your financial situation, recommend suitable mortgage products, and negotiate terms with lenders on your behalf.
3. Nail down your home search
Start by defining your priorities and preferences for your future home. Consider factors such as location, size, layout, amenities, budget, and desired features.
Unfortunately, when it comes to buying a home, you will likely have to make a difference between must-haves and nice-to-haves in order to step onto the property ladder sooner rather than later.
Explore your options by looking at homes that meet your criteria, including real estate websites, mobile apps, local listings, and social media platforms.
You can also browse our homes to find your dream place through private sale, Shared Ownership or even through resale.
It is important to attend several viewings before making a decision. You can also explore different neighbourhoods to gain insights into the local market and identify properties that resonate with you.
Be proactive in your search and stay informed about new listings and market trends to increase your chances of finding the perfect home.
A knowledgeable agent can provide valuable insights, access to exclusive listings, and expert guidance throughout the search process.
Questions to ask when viewing a home
If you are looking to buy a house in the UK for the first time, first comes the big question of whether you have the means to pay for it. Asking how much the house costs is one of the first questions to ask when buying a house and will help you budget for your monthly mortgage payments.
You might think working out your house price is as simple as reading the initial asking price, but you should also be prepared for the added costs of home buying. Whatever you do, make sure you know all of the costs involved so you don’t get caught out by an unexpected payment.
Now you know how much your home costs, you'll want to work out exactly what you're getting for your money. In many cases, buying a home comes with perks or add-ons to draw you in. If there is a greenhouse, a fancy vacuum cleaner or a washing machine you have your eye on, it’s well worth knowing if it’s yours for the taking.
Depending on who you are asking (the estate agent or the owner), you can try and find out the circumstances behind the sale.
It could simply be that the owner is moving town or is looking for an apartment upgrade but look out for red flags. Is the new home located right next to a noisy airport or train station? If the property is taking ages to sell, it might be for a good reason.
Where does the sun fall on your property? If you like to wake up to the morning sunshine, make sure you’ve worked out how much exposure you’ll get to the sun in your new place. A south-facing house usually gets the most natural light but be sure to ask.
This is a question that you can ask an estate agent or owner, but also anyone in the neighbourhood. By doing this, you can get an unbiased view of what the area is like, and what amenities are nearby.
A supermarket located just 5 minutes away can make a big difference in making your life easier, while a local transport link will shave a lot of time off your commute to work. If you are renting with kids, you may also want to ensure there are some good schools nearby.
You may have found a perfect home, but noisy neighbours can turn your dream home into a living nightmare.
This is one of the best questions to ask when buying a home from an owner. Be sure to ask about who your neighbours are, what time they work, and if they have a passion for late-night parties. If you are someone who needs to wake up early for work, living next door to a group of party animals could be a deal breaker.
The best way to avoid an emergency is to find out if there are any problem areas in your new home.
Finding out you have a faulty boiler could end in disaster, so checking when the boiler was last serviced is one of the most crucial things to ask when buying a house. If your boiler is on its last legs, you should ask your landlord to get it serviced before you sign any agreements.
When buying a home, understanding its structural integrity is crucial. A seemingly perfect property could be hiding serious issues that might cost you thousands in repairs. Look out for signs of structural damage, and don't be afraid to ask about the property's condition.
Has the building undergone recent surveys? Are there any visible signs of dampness or foundation problems? These questions can help you avoid purchasing a property with hidden structural challenges that could turn your dream home into a costly nightmare.
Energy efficiency isn't just an environmental concern – it's a financial one too. An energy-inefficient home can drain your wallet through high utility bills.
Ask to see the property's Energy Performance Certificate (EPC) and find out about its current rating. Look for features like double glazing, insulation, or solar panels that could save you money in the long run.
Understanding the home's energy performance can help you budget for future running costs and potentially avoid unexpected expense.
The neighbourhood you're moving into today might look very different tomorrow. Asking about planned developments can give you crucial insights into your potential new home's future.
Are there any upcoming construction projects? What are the local planning permissions? Understanding the area's development plans can help you assess how these might impact your property's value and your quality of life. 2
A seemingly perfect location could change dramatically with upcoming infrastructure or residential developments.
Buying a home isn't just about the physical property – it's also about navigating a complex legal landscape. Dig deeper into the property's legal status by asking about its ownership history, any existing disputes, or potential restrictions.
Are there any covenants or easements that could affect your ownership? Understanding these legal nuances can save you from potential headaches down the line and ensure a smooth property purchase.
The purchase price is just the beginning when it comes to home ownership. Beyond the initial cost, you'll want to understand the full financial commitment.
Ask about estimated insurance costs, service charges, and typical maintenance expenses. Are there any upcoming major repairs or renovations? Getting a clear picture of these additional costs can help you budget effectively and avoid financial surprises after moving in.
If you feel like you are overloading the seller with home-buying questions, just remember that you are under no obligation to buy a home until you know what you are getting into, so until you do, ask away!
4. Explore Government-Backed Schemes
Alternatives to buying your first home outright exist and can help first-time buyers to get onto the property ladder.
1. Shared Ownership is a government-backed initiative designed to help individuals and families step onto the property ladder.
With Shared Ownership, buyers purchase a share of the property (usually between 25% and 75%) and pay rent on the remaining share owned by a housing association.
This option allows buyers to purchase a home with a smaller deposit and lower mortgage repayments. Over time, buyers have the opportunity to increase their ownership share through a process known as Staircasing.
2. London Living Rent offer tenants the opportunity to rent a property at below-market rates for a set period, with the option to purchase the property at the end of the lease.
This allows tenants to save for a deposit while living in the property and test the waters of homeownership before committing to a purchase.
3. The Right to Buy scheme enables eligible tenants of council properties to purchase their home at a discounted price. This initiative aims to promote homeownership and provide tenants with the opportunity to invest in their future.
Discounts vary depending on factors such as the length of the tenancy and the property's value. Right to Buy can be a viable option for council tenants looking to take the first step towards homeownership.
4. Shared Equity schemes involve the government or a housing association providing a loan or equity stake to help buyers purchase a property.
Buyers contribute a deposit and secure a mortgage for the remaining amount, with the shared equity portion reducing the overall loan-to-value ratio. This can result in lower mortgage repayments and make homeownership more affordable for buyers with limited savings.
5. Plan for extra costs
When purchasing a home in England, it's essential to consider additional costs beyond the purchase price. These expenses, often referred to as "closing costs," can significantly impact your budget and financial planning.
Stamp Duty Land Tax (SDLT) is one of the most significant additional costs associated with buying a home in England.
It is a tax imposed by the government on property transactions above a certain threshold.
Legal Fees are inevitable when buying your first home. They cover various aspects of the conveyancing process, including conducting property searches, reviewing contracts, handling paperwork, and facilitating the transfer of ownership.
Before finalising the purchase of a property, it's wise to commission a survey to assess its condition and identify any potential issues or defects.
The cost of a survey can vary depending on the type and scope of the survey conducted. While some lenders offer basic valuation surveys as part of their mortgage application process, it's often beneficial to invest in a more comprehensive survey to ensure peace of mind and avoid costly surprises down the line.
When securing a mortgage, borrowers may incur various mortgage fees and charges, including arrangement fees, valuation fees, and mortgage broker fees.
These fees can vary depending on the lender and the specific mortgage product chosen. It's essential to carefully review and understand the terms of your mortgage agreement, including any associated fees, to avoid unexpected expenses.
Finally, don't forget to budget for the moving costs such as removal, packing materials, and utility connection fees.
These expenses can add up quickly, so it's advisable to obtain quotes from multiple removal companies and plan ahead to reduce stress and ensure a smooth transition to your new home.
Frequently asked questions about buying your first home
Most first-time buyers put down around 5 - 10% of the property price, but some mortgages require more.
If you’re buying through Shared Ownership, your deposit is based on the share you’re purchasing (not the full market value). The upfront amount is therefore much lower, usually 10% of your share, which can be as low as £8,000 with Peabody.
Lenders look at affordability (your income and regular outgoings), your credit history, employment status, and existing commitments like loans, credit cards, or car finance.
They’ll also check how much deposit you have and run credit and affordability checks to decide how much you can borrow and at what rate.
Having recent payslips, bank statements and ID ready can make the application smoother.
Beyond your deposit, budget for conveyancing/legal fees, a survey/valuation, mortgage arrangement or broker fees, and moving costs.
Depending on the purchase price you may also pay Stamp Duty Land Tax (SDLT).
After you move in, plan for ongoing costs like council tax, utilities, insurance, service charges, and maintenance or repairs.
Yes you can. Many Shared Ownership buyers can increase their share over time through a process called Staircasing.
You buy additional shares (when you can afford to), which usually means a valuation and legal fees, and your rent goes down as your ownership share goes up.
