8 Key Things to Consider When Buying Your First Home

For many Brits, homeownership has become something of a pipe dream.

Nine out of ten young people want to buy a house, but recent analysis revealed just one in four will achieve it by 2026. From partnering up to selling prized possessions, people are resorting to to secure their place on the property ladder.

If you’re one of the lucky ones and you’ve finally managed to rustle up a deposit, you might be wondering: what’s next? After all, it’s easy for tunnel vision to set in when your eyes are on the prize for so long.

There are lots of other practical things to consider when you buy your first home. Here are eight of the most essential:

1. Mortgage options

All mortgages are not created equal, so the deal you find can make a big difference to what you can afford. Always seek mortgage advice – it’s important not just to find the best interest rates, but also because you’ll get a more accurate picture of what you can afford.

Factors like your income, whether or not you have a partner and both of your credit scores will affect the amount you can borrow. Online loan-to-income calculator tools can help, but it is always better to seek professional advice.

Make sure yours is independent, so they won’t try to sway you towards a particular product.

2. Solicitor fees

If you thought saving thousands of pounds for a deposit was enough to secure the keys to your very first home, you may be in for a shock. There are lots of other costs to cover – including solicitor’s fees.

The average cost of solicitor fees for buying a house is between £500 and £1,800 in the UK but this depends on how complicated the sale is. If your solicitor comes up against complex ownership structures, the charge may be higher, so always set a budget aside for this.

The average cost of solicitor fees for buying a house is between £500 and £1,800 in the UK but this depends on how complicated the sale is.

3. Life insurance

Buying your first home is an exciting time; death isn’t part of the plan. But, taking on a big financial responsibility means you need to plan ahead. This is especially true if you are buying with a partner: if they died, would you be able to foot the bill?

Purchasing life insurance is an important part of taking on a mortgage. Compare all types of life insurance to make sure you understand the best options for new homeowners – like decreasing-term insurance.

4. House insurance

Some mortgages require you to take out a house insurance policy as part of the deal, so this is also part and parcel of becoming a homeowner. Buildings insurance protects both you and your mortgage provider against the risk of damage to the structure of your home from things like subsidence, fire and extreme weather.

Always take out a buildings insurance policy to cover the potential cost of rebuilding your house after severe damage.

5. Protecting your deposit

Many couples buy their first homes together because it is so much more viable than going it alone. Your combined income is much higher, you pose less risk to lenders and you’ll be able to save for a deposit worth twice as much. This reality is attracting more friends and acquaintances than ever to buy a house together – a decision that can come back to bite unless the right preparations are made.

Instead, consider setting up a Declaration of Trust so that you will become ‘tenants in common’ and hold specific shares of the property. Speak to your solicitor about the options.

6. Booking a surveyor

Homebuyer surveys help you to avoid unexpected costs. When you consider that the average cost of a boiler is now as much as £2,500, this is not a step worth skipping.

To find a reputable surveyor, enquire at an association like RPSA or RICS.

7. Stamp duty

They say two things are certain in life – taxes and death. Stamp duty is the tax you pay when buying a new house and it’s an important consideration for first-time buyers.

There is no stamp duty for properties worth less than £300,000, but if you’re a first-time buyer in London or the south-east, you might need to factor in a significant tax bill. Rates can be as high as 5% – which is a significant sum of money.

8. Negotiation

Finally, don’t forget negotiation. When you have had your eyes set on a goal for so long, you may be tempted to offer the full asking price – but this could be a mistake.

Keep an eye on the market and don’t be afraid to renegotiate after your surveyor creates their report. This way, your new house can be a great asset as well as a cosy new home.

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