buying a house - everything you need to know

Buying a house is a big life event.

With most people buying only a few properties in their lifetime, it’s not a process that many people feel overly familiar with.

This guide will outline the process of buying a house and answer some frequently asked questions.

buying a house - cgi house with keys in forefront of image

In this guide

How to buy a house (UK)
What is the process of buying a house?
How to make an offer on a house
How much deposit do I need to buy a house?
How long does it take to buy a house (UK)?
How much are solicitor’s fees for buying a house?
Who organises a survey when buying a house?
What credit score is needed to buy a house?
I already own a property – can I buy a house before mine sells?

How to buy a house (UK)

Before you start looking for a property, you’ll need to know how much you can afford. Meeting with an independent financial advisor can be a great first step when you’re considering buying a house.

When thinking about your finances, you’ll need to consider several elements. How much deposit do you have available? How much can you afford in monthly repayments? Will you have enough money to cover annual upkeep and maintenance?

Once you have an idea of budget, you can start looking at what’s available in your price range.

You might find it helpful to make a list of what’s important to you. Do you need to live in a specific area due to work or other commitments or are you open to exploring new areas? How many rooms do you need? How might your needs change over the next few years?

Whilst most people will start their property search online, you may also want to register with local estate agents. Their local knowledge can be invaluable in terms of helping you find a property that meets your needs and your budget. Being registered with them can also mean you get access to new properties before they’re officially put on the market.

Once you’ve found a property and had an offer accepted, you will go through the conveyancing process. This is the legal process required to transfer property ownership from one person to another.

What is the process of buying a house?

Our step-by-step guide below will take you through each part of the process.

Step-by-step guide to buying a house (UK)

Step 1: How much can you borrow?

It’s important to know what your budget is before you start looking for a property. A mortgage broker will be able to provide information on different options available to you and how much different mortgage companies might be able to lend you.

Bonus step: Property to sell?

If you have a property to sell before you can buy your next home, now is the time to do it. Most sellers won’t entertain an offer from you until you’re a ‘proceedable’ buyer – this means being a chain-free buyer or having your current property sold subject to contract (SSTC).

Step 2: Agreement in principle

Once you’ve found the right mortgage product, it’s wise to get an agreement in principle from the lender. This is a document that outlines how much the lender is likely to be happy to lend you, based on some basic financial and personal information you’ve provided.

Step 3: Finding a property

According to Yopa, 98% of people begin their search for a new home online. Property portals such as Rightmove and Zoopla enable you to see almost every property or sale in a certain area. If there is an estate agent that you know is particularly popular in the area you want to buy, it might be worth registering your interest with them in addition to your online searches. Registering with an estate agent can give you access to new properties coming onto the market before they make it onto the online portals.

When you begin your search for a new property, think carefully about your needs and wants. What is a ‘must have’ and what are you happy to compromise on? How big is your search area? What’s realistic for your budget?

Step 4: Choosing a conveyancer or conveyancing solicitor

At the point of making an offer on a property, the estate agent will ask who your conveyancer or solicitor are. It’s a good idea to get this organised whilst you’re looking for a property.

Your conveyancer or solicitor can have a big impact on both the speed and success of your property purchase, so it’s important to choose a reputable professional. Personal recommendations from friends or family members can be a great place to start.

Step 5: Make an offer

Once you’ve found a property you like, you’ll need to make an offer via the estate agent.

Step 6: Applying for your mortgage

Once you’ve had an offer accepted on a property, it’s time to apply for your mortgage. Your mortgage broker will guide you through the process, letting you know what information you need to provide at each state. Most mortgage applications take around 2-6 weeks from application to mortgage offer. It may take a little longer if you have a poor credit history or are self-employed, as additional financial checks will need to be carried out.

Step 7: Conveyancing

Conveyancing is the legal process of purchasing a house. This will involve the drafting of contracts, searches, surveys, and information gathering about the property. The conveyancing process will be handled by your solicitor or conveyancer.

Step 8: Exchanging contracts

Once you and the seller are both ready, sale contracts will be exchanged and a deposit will be paid (usually 10% of the agreed purchase price). At this point, the purchase becomes legally binding. When contracts are exchanged, you will agree on a date for the sale to complete.

Step 9: Sale completion

On the pre-agreed date, the sale will complete. The remaining balance will be paid to the seller and the property will legally become yours.

How to make an offer on a house

If you’ve found a house you want to make an offer on, you’ll need to contact the estate agent.

You will usually make an offer over the telephone. Once you’ve come to a mutually agreeable price and your offer has been accepted, you should receive confirmation in writing. This letter will state the price that has been agreed and any conditions relating to the sale eg. vacant possession etc.

How much should I offer on a house?

It can be difficult to know how much to offer on a property. It’s important for your initial offer to be below your maximum budget – this will give you room for negotiation. In the current market, most people will begin with an offer between 5% and 10% below the asking price. Anything lower than that risks alienating the seller and having them dismiss the offer with no intention of negotiating. If you think the property is worth less than 90% of the asking price, but would still like to make an offer, you’ll need to carefully explain your rationale for the offer you are making.

How to get an offer accepted on a house

When you submit an offer, it’s important that you present it thoughtfully. This means not just stating the price you’d like to offer, but also communicating to the seller why you’d be a great option for them. First-time buyers and chain-free buyers are particularly in demand. If you fall into either category, make sure you tell the estate agent. You should also be clear about your motivation for moving. We often hear stories of people who have accepted a lower offer because they connected with the reason the buyer wanted the house eg. to attend a local school, to be close to family etc. A strong reason for moving means you’re likely to be a more reliable buyer. With around one in four property sales falling through before completion, reliability is a very desirable quality in a buyer.

How much deposit do I need to buy a house?

The bigger deposit you can afford, the more favourable your mortgage interest rate will be. The majority of lenders will require a minimum of 10% of the agreed purchase price as a deposit. 95% mortgages are available, which will only require a 5% deposit, but they are less common and can be difficult to get. 95% mortgages will also be offered at a higher interest rate, so will be more expensive.

How long does it take to buy a house (UK)?

Once you’ve had an offer accepted on a property, it takes an average of 2-3 months for the sale to complete. It can take significantly longer if you’re part of a property chain.

How much are solicitors fees for buying a house?

Solicitor’s fees for buying a house can vary, depending on the complexity of the sale.

You can expect to pay an average of £500-£1,100 if you’re just buying a property. If you also have a property to sell, that figure will rise to £1,100-£2,000.

Who organises a survey when buying a house?

If you’re using a mortgage to buy a house, your mortgage lender will arrange a property valuation. They will usually give you the option of upgrading that valuation to a homebuyer survey. If you’re buying an older or more unusual property, you may need to arrange for a full structural survey. You will usually need to organise this separately with a local surveyor.

What credit score is needed to buy a house?

There’s no specific score needed to buy a house – partly because different organisations score your credit rating using different scales.

Ultimately, the better your credit rating, the easier it will be to secure a mortgage.

If you don’t have a great credit score, you may still be able to get a mortgage, but you will be considered a more risky customer and therefore you’re likely to be offered mortgages with a higher interest rate.

How do I check my credit score?

You can check your credit score for free with 3 major credit referencing agencies: Experian, Equifax and TransUnion. Alternatively, most banks now offer customers the ability to check their credit score on their banking app.

Although the score range differs between credit referencing agencies, they usually have the same 5 grades: ‘very poor’, ‘poor’, ‘fair’, ‘good’ and ‘excellent’.

How can I improve my credit score?

If you’re thinking about buying a house and want to improve your chances of getting a good mortgage deal, there are several ways to give your credit score a quick boost.

Make sure you’re on the electoral roll. This will have a big impact on your credit score and is probably the quickest and easiest change you can make.
Ensure all your bills and any credit payments are paid on time, and challenge anything that you believe to be an error on your credit report. Even simple things like typos in your name or address can impact your credit score and make lenders reject your application. Look out for anything that doesn’t look quite right.
Keep your credit borrowing percentage low. Ideally, you want to keep your borrowing lower than 30% of your available credit. If you have a credit card with a credit limit of £2,000, you don’t really want to have a balance of more than £600 on it. Anything above 50% of available credit (£1,000 in this example) means you’re likely to be seen as a higher risk borrower. This will impact your credit score.
Credit history is a good thing. Lenders want to see a pattern of you borrowing and paying back, regularly and reliably. If you’ve never had a credit card, it’s difficult for them to see how responsible (or not) you are with borrowing. One way to boost your credit score can be to take out a credit card and make small purchases with it, that you then pay off in full each month. This will create a pattern of positive credit use that should give your credit score a boost.

I already own a property – can I buy a house before mine sells?

If you have a property to sell, you’re unlikely to have an offer accepted until you’ve found a buyer.

If you’ve already found a property you want to buy, but haven’t yet sold yours, you have a few different options.

Putting your property on the market

If the property you’re interested in has only just gone on the market and there isn’t much other interest, you could try putting your property on the market with an estate agent. It will be important to keep in close contact with the estate agent selling the property you want to buy, in the hope that they will alert you if there are any other serious buyers interested. Whether you’re willing to risk this strategy will depend on how much you want the property and how likely you think it is that it will still be available when you’re in a position to proceed.

Explore bridging finance

A property bridging loan could be an option if you’re struggling to coordinate your sale and purchase. Bridging loans are an expensive way to borrow money though, so should only be considered as a short-term option. You might choose a bridging loan if the sale won’t complete in time to fund your onward move.

Selling your house quickly

If you don’t want to miss out on your new home, but are struggling to sell your current property on the open market (or don’t want to risk waiting to find a buyer), you might want to consider selling to a cash buying company. A home buying company will be able to offer a quick, guaranteed sale on a date of your choice. Any genuine property buying company will buy your property at a discount, so you’ll need to crunch the numbers and see whether it would work for you. As it essentially makes you a chain-free buyer, you may well be able to negotiate an attractive price on your new home. This can help ease the impact of accepting a discounted price for your current property.

Rent out your current house

If you have a way to raise a deposit without selling your current property, you could consider renting out your current home. You would need to speak to your mortgage lender and get your current residential mortgage changed to a buy-to-let mortgage. You should also research the financial and practical implications of becoming a landlord before making a decision.

Buying a property is a big step, so it’s important to make sure you’re well-prepared and well-informed. Getting your finances in order well in advance will stand you in good stead for a quick and successful purchase.

Buying a house – everything you need to know