Getting onto the property ladder is an exciting prospect, but it’s not always easy to take the leap. The cost of living is rising across the UK, and it’s difficult to save for a deposit and find affordable housing. If you are looking to buy in Worcester, there are steps you can take to try to minimise stress and avoid pitfalls. In this guide, we’ll provide some useful advice to help you to understand what buying a property involves and make the process of getting a mortgage and finding your dream home easier.
What should first-time buyers in Worcester know about purchasing property?
Purchasing a property may seem like a relatively simple process if you’ve watched TV shows or films, but in reality, it can be a roller coaster ride. As a first-time buyer searching for a new house or apartment in Worcester, it’s wise to be prepared. Here are some essentials to know before you start browsing listings or signing up for new property alerts:
1. Understanding mortgages
The vast majority of buyers borrow money to purchase a property. Before you start your search for a new home in Worcester, it’s crucial to gain a better understanding of mortgages, figure out how much you can afford to borrow, and compare offers and deals. If you need mortgage advice in Worcester, the team at SN Financial Services is on hand to help. Taking out a mortgage is a huge step, and it’s critical to ensure that you are aware of the terms and conditions, fees and charges, and repayment requirements before you submit an application.
There is a vast array of mortgages available from multiple lenders. Speaking to an experienced mortgage adviser can help you to determine which products are best for you by comparing different mortgages and weighing up the pros and cons. You can learn about fixed and variable rate mortgages and help available for first-time buyers. There are schemes available to help first-time buyers to get onto the ladder, including the Mortgage Guarantee Scheme, Help to Buy equity loans, and Lifetime Individual Savings Accounts (LISA). It’s beneficial to research these initiatives and find out how they could help you to boost your deposit or access better mortgage offers.
When you apply for a mortgage, the lender will request information from you, including documents to prove your employment status and income and verify your personal details. If your application is approved, you will receive an offer that will then be sent to you and your solicitor to complete the legal element of the purchase.
2. Saving for a deposit and setting a budget
One of the most important steps to take as an aspiring homeowner is to set a budget. Once you have researched mortgages and you know how much you can put down as a deposit, this will give you an accurate idea of your maximum budget. When you are exploring mortgage options, make sure you can afford the repayments and set yourself a limit that won’t put you under financial pressure. It’s important to remember that you’ll need to factor in living costs and maintenance, as well as the cost of your mortgage.
The average purchase price for first-time buyers in the UK hit over £264,000 in 2021. Figures vary significantly between different regions. Prices are highest in Greater London (£475,000) and lowest in the North East (£151,000). In the West Midlands, the average price was £209,000 (source).
Saving for a deposit is one of the biggest challenges for first-time buyers. If you are hoping to buy in Worcester, it’s beneficial to try to save as much as possible. The higher the value of your deposit, the better the mortgage rate. If you don’t have a substantial deposit, there’s no need to panic. It is possible to access mortgages with a 5% or 10% deposit. Monthly repayments are likely to be higher if the deposit value is lower. Data suggests that the average deposit paid by first-time buyers in the UK stood at £61,000 in 2021. The figure is significantly lower in the West Midlands at around £30,000 (source).
3. Finding the right property
This is the most exciting part of buying your first home. Once you have a budget and a mortgage offer in principle, you can start looking for a house or flat. Contact local estate agents, use websites and apps, and look at adverts in local newspapers and magazines. Establish a search area, filter results according to location and budget, and think about what type of property you would prefer. For many first-time buyers, it’s difficult to find properties that tick every box. It’s wise to consider your priorities and think about compromises you would make if you couldn’t find the perfect property. You may be open to expanding your search area slightly or sacrificing a spare bedroom or a garage, for example.
When you are looking around properties or trawling through listings, try to be open-minded and view a wide range of houses and flats to get a good idea of what’s available. If you fall head over heels, arrange a second viewing and focus on the practicalities as well as your emotional reaction to the property. Is it in the right location? Is there enough space? Does the property fit with your lifestyle? Is it in your price range? Take your time to think about your options before you put an offer in. Unless there are already several offers on the table, or properties are selling as soon as they go on the market, you should have time to take a step back and figure out what you want to do.
4. Negotiating a price
If you want to put an offer in on a property in Worcester, the first step is to contact the agent (or the vendor if it is a private sale) and present your offer. The estate agent will contact their client and pass the information on. They will then get back to you with the vendor’s response. If the offer is rejected, you can choose to walk away or increase your offer. This part of the process can be daunting for first-time buyers, especially if there are other parties interested in the property. Remember to stick to your budget. If you get involved in a bidding war, you may end up spending too much and this could overstretch you financially.
If you have an offer on a property accepted, this doesn’t mean that you are legally obliged to buy the house or flat. There is still a long way to go in terms of finalising the deal and handing over the keys. You can change your mind at any point before you sign and exchange contracts.
5. What happens after you have an offer accepted?
It’s understandable to assume that if you have an offer accepted, everything will fall into place and you’ll be unpacking boxes in a matter of weeks. Unfortunately, buying a house isn’t always straightforward. Once you have an offer accepted, there are legal processes to complete and you should also consider having a survey done on the property. A home survey provides valuable information about the condition of the building, and it can also give you an idea of issues you will need to address if you choose to go ahead with the purchase. It is particularly important to pay for a survey if the property is old, there are visible signs of wear or damage, or you are taking on a project.
Once you get the survey back from your surveyor, take some time to go through it and contact them if you have any questions. If there are red flags, or jobs that need doing urgently, it’s beneficial to get quotes to see how much the work would cost. At this point, you have the right to contact the estate agent and ask to renegotiate. You may want to submit a lower offer to cover the cost of remedial or repair work, or ask the seller to do the work before you buy the property. Research conducted by the consumer group, Which? suggests that around two-thirds of buyers try to renegotiate offers after a survey (source). If your request is rejected and you don’t want to continue, you can step away.
6. Budgeting for legal fees
If you’ve never bought a house before, you might not be aware of the costs involved. As well as paying the purchase price, you’ll also need to cover legal fees and pay for searches. Typically, solicitors charge between £800 and £2,000. Compare quotes from different local firms, read reviews and ask for recommendations from friends, colleagues, and family members before you decide which solicitor to hire.
Conclusion
Buying your first home is an incredibly exciting prospect, but it can be challenging to navigate the process of saving, taking out a mortgage, finding the right home, and exchanging contracts. If you are saving for a deposit, or you’re looking for your first home in Worcester, it’s beneficial to prepare as much as possible and understand what is involved. Speak to experienced mortgage advisers, compare offers, set a budget, and figure out what you’re looking for. View different types of properties, arrange second viewings, and take your time to make a decision. Getting onto the ladder isn’t easy, but hopefully, this guide will help you eliminate stress and find your perfect home.
