Thorough planning, as well as having clear and detailed requirements for the purchase of your property, will help you to move through the buying process more effectively and with a higher chance of success.

Planning your property purchase

In order to effectively plan for your property purchase, take into account the following:

  • Consider whether you will own your property on your own (sole ownership) or enter into a contract with another party as a joint or co-owner.  Decide whether you are buying on your own or sharing the purchase and ownership of the property with your family and friends.
  • Decide if you are going to use your existing property to fund your next property, either by selling it, or leveraging against it (releasing the equity or re-mortgaging it). 
  • If you are selling your existing property to fund your next purchase, ensure it has been valued as soon as possible so you are aware of your equity in your current property, and how much additional funding you will require for your next property.  Put your existing property on the market before you start searching for your next property so that you do not lose out on a property you like because your own property remains unsold, or you are under pressure to take a lower price on your existing home.
  • Work out what you can afford to re-pay monthly as mortgage payments (if you are getting a mortgage), along with other monthly expenses, including building and contents insurance, utility bills, Council Tax and any parking fees or parking permits for each vehicle in the household, as well as living expenses.  Consider whether your monthly costs could be met by letting out a spare room.  
  • If there is a change in the way your home is going to be used (i.e. rented out, as opposed to being owner-occupied), then your mortgage loan may need to be changed as different mortgage products apply to different types of housing.  Discuss this with your mortgage provider in advance.
  • Investigate Government schemes for first home buyers and existing homeowners, e.g. Help-to-Buy or Shared Ownership.
  • Confirm what the total amount of your budget is.  Consider the deposit you will need to pay on exchange of contracts, which is usually 10% of the purchase price of the property.  The seller may agree to a lesser amount of deposit being paid on exchange, but if you fail to complete the purchase, the seller is still entitled to receive 10% of the value of the property from you.
  • Stamp duty is payable by you on the completion date of your property purchase and you will need to provide these funds to your Solicitor. 
  • Survey costs may need to be paid for when you proceed with an offer to purchase a property.  If you request a more detailed report (a Condition Report, Homebuyers Report or a Building and Structural survey) you will need to pay for this report yourself.  Confirm the cost of your report of choice with the survey company before you proceed.
  • Establish whether you will use a licenced conveyancer or a Solicitor to undertake your property conveyancing.  Your conveyancing fees and the associated charges for buying your home will also be due before the completion of the purchase of your property.
  • Have some contingency money set aside in case there is an overrun on the costs during your purchase, e.g. in case you need to increase your offer or want to obtain a detailed survey report.
  • Find out what your credit score is so that you are able to address or correct any issues or anomalies in advance.  A negative credit report can affect your chance to obtain a mortgage and affect the amount of interest you pay on a loan if you are perceived as a high-risk borrower.  Obtain a copy of your credit report from various online credit score companies, e.g. Experian.  Ensuring that your credit score is high means you can have more confidence during the mortgage application process and a higher likelihood of having a positive outcome by securing a good mortgage product.
  • Determine in advance who will provide your mortgage.  Investigate mortgage providers in the market, including your bank or building society, other banks and building societies offering competitive products, or use the services of an independent broker who can offer free advice and has access to a broad mortgage market (their fee is usually paid for by the mortgage provider, but you will need to confirm this beforehand).  Your mortgage provider will require you to provide the following information when applying for a mortgage, so be prepared and have this available:
    • Proof of ID: a passport or driver’s licence showing your photo.
    • Proof of address: utility bills or bank statements showing your current address
    • Proof of earnings: pay slips or company accounts
    • Recent bank statement: usually dated within the last 3 months, though it could be as much as 6 months old (depending on your mortgage provider’s requirements).
  • Obtain a pre-qualified mortgage agreement or letter from your broker or mortgage provider to show that you have been assessed by your mortgage provider and that you are able to obtain a mortgage of up to a certain amount.  This will be valuable when you get to the offer stage as it will show an advantage over other buyers if they are not similarly prepared, presenting you as a serious buyer in a well-prepared position.  The pre-qualified mortgage agreement is known by different names, e.g. Agreement in Principal (AIP), Decision in Principle (DIP) or Mortgage in Principal (MIP).
  • Familiarise yourself with the stages of the end-to-end buying process, along with how long the stages in the process can take, so that you can be aware and plan for these:
    • Up to 36 weeks for searching and locating your desired property.
    • Up to 8 weeks for offer, acceptance and exchange of contracts.
    • Up to 4 weeks for completion of contracts

Detailing your property requirements

Write a list of detailed requirements for what is a must have in your next property and what would be nice to have.  Decide on what your requirements are and confirm your prioritised list of must-haves, along with a list of nice-to-haves, for your desired location, property type and budget:

  • The price range for the deposit you have?  For some properties and mortgage products, you may be able to put down a smaller deposit and can therefore afford to purchase a better property (though your monthly mortgage repayments will be higher, so you will need to take your affordability into consideration).
  • The upper limit of your monthly costs?  Council tax, as well as home and contents insurance, may be affected by a change in location.  Do you have Automatic Payments or Direct Debits that will be on-going after you have purchased your property, and if so, have you taken these into account?  Can you afford an increase in mortgage payments compared to what you are currently paying in rent or mortgage?
  • The location you work in and how far would you be willing to travel from your home?  Once you move into your new home, there will still be the daily travel to your workplace and you want to ensure that the distance doesn’t become an issue, so make proximity to transport links or motorway access a must-have if you need them to be easily accessible.
  • The location you would you prefer to buy in as well as areas you would consider extending your search to if you cannot find a property within your budget or in your desired location? Desired areas with dream properties may not be reasonably priced so you may have to look at the next best thing you can afford. 
  • Buy a freehold or leasehold property?  Dealing with freehold properties is easier than leasehold properties.  With leasehold properties, there are several additional, complicated and lengthy processes, arrangements and management structures to consider and administer the purchase through.  This can also impact your Solicitor’s time and costs. 
  • The style and size of home and garden are you looking to buy?  Decide if is a flat, terraced, semi-detached, detached, cottage, bungalow or retirement home.  Ascertain if stairs are going to be an issue for any members of your household as this could direct you to purchasing a bungalow or a flat; otherwise, check that you have the space to install a lift or fit a stairlift.  Decide if you want a large garden for children to play in, or ample outdoor entertaining space, or a modest and low maintenance space outside.
  • The number of bedrooms you need in your home?  Will young children be sharing bedrooms?  If you have people staying over regularly, you may want to have a permanent guest room set up.
  • Dependents who have specific requirements or special needs?  Disabled or elderly relatives residing with you may need bedrooms and bathrooms on ground level.
  • A property that allows you to live the way you would like to?  Decide on the layout you prefer, e.g. check that there are open-plan living spaces, large windows / doors opening out to the back garden, or a south-facing garden you can spend time in during most of the year; confirm that there is easy access onto the property and ascertain if it has sufficient storage, out buildings or an external home office that you may require.  Also verify that there is adequate parking and garaging available on or near the property.  You may wish to develop the property later, so check that there is potential to extend the property.
  • A bustling locality with a café culture or a quiet environment?  Be alert to loud music, barking dogs, intrusive noise through party walls, etc.  
  • Children who are have particular schooling requirements?  Are there schools that fulfil their needs in the catchment area you are looking to purchase in and move to?  This may be one of those requirements you may not be prepared to compromise on.  If it is an investment property you are looking to buy, keep in mind that your rental market may be swayed by the same decision process to determine whether they rent from you or not. 
  • When do you expect to move?  If there an urgency to your move, or a date you must move by (e.g. for the start of the academic year), determining this in advance will help with your property search start, exchange and purchase completion dates.