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04 Mar 2021
Jamie Gibbs Alice Campion

Buying your first house: from newbie to homeowner in 10 steps


House keys

Taking that first step on the property ladder is likely to be one of the biggest decisions you’ll make.

Daunted with the thought of buying your first home? Don’t be. We’ve broken it down into 10 simple steps.

Changes to stamp duty 3 March 2021

Chancellor of the Exchequer Rishi Sunak announced in the Budget that the stamp duty holiday will extend to 30 June 2021. 

In England and Northern Ireland, stamp duty will only apply if the property you buy is worth over £500,000.

After that, this will go down to £250,000 until 30 September. From 1 October, the usual stamp duty threshold of £125,000 will return.

In Wales, properties under £250,000 will be exempt from land transaction tax until 30 June. This doesn't apply to second homes or buy-to-let properties.

And in Scotland, land and buildings transaction tax won't apply to buildings worth less than £145,000. This doesn't apply to second homes.


What is stamp duty?

Stamp duty is a land tax you pay on your home. The more valuable your house is, the more stamp duty you pay. 

In England and Northern Ireland, its full name is Stamp Duty Land Tax.

In Wales it’s known as land transaction tax.

In Scotland it’s known as land and buildings transaction tax.


How much could I save?

Let's say you buy a house for £275,000.

In England and Northern Ireland, you'd usually pay £3,750. Now you'd pay nothing.

In Wales you'd usually pay £3,700. Now you'd pay £1,250.

In Scotland you'd usually pay £3,350. Now you'd pay £1,250.

These stamp duty holidays will run until 31 March 2021.


Ready to buy? Jump to a step:

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Step 1: Should I buy or rent?

For some, renting might be better than buying and vice versa. There are pros and cons to both.

If you’re renting you don’t have the initial outlay of the deposit. You also have the flexibility to move when you like.

The downside is you don’t own the house, so you’ll have to run any changes – like redecorating – past the landlord.

With a mortgage, you can make any changes you like to the house. Also, your monthly payments are going towards a building that you will eventually own.

But it can be difficult to gather together the initial deposit for a mortgage. And it’s not as easy to up sticks and move. 

Still in the dark? Read step 1: Should I buy or rent?


Step 2: What can I afford?

Before you start looking, visit a mortgage advisor. They’ll give you a good idea of what you can afford.

Bring the following items with you when you see them:

  • Proof of ID, eg passport or driving licence

  • Proof of current address, eg council tax or utility bill

  • Last three months’ worth of payslips

  • Your most recent P60

Details of any credit commitments. For example, credit card statements, student loans or overdrafts.

As a rough estimate, you should be able to borrow four times the amount of your gross income.

The initial deposit, the length of time you have the mortgage for, and the interest rate all impact your monthly mortgage payments.

Luckily, there are schemes available to help make mortgages more affordable.

Find out more by reading step 2: What can I afford?


Step 3: Saving for a deposit

Typically, you’ll have to get a deposit together of between 5% and 20%. That’s a lot of cash, especially if you’re renting.

Having a strict budget can help you save for that all-important deposit. The best way to start is to work out what you spend each month, making sure to include one-off repairs like MOTs.

You can then work out how much you can realistically afford to save and start squirreling it away.

Putting your cash into a simple savings account will work, and you could benefit from interest payments too.

ISAs are another good way to save. These have a higher interest rate and they’re not as easy to dip into. Out of sight, out of mind.

For more tips and tricks, read step 3: Saving for a deposit


Step 4: Finding the perfect home

Browsing online estate agents like Rightmove and Zoopla make it easy to look for houses.

You should also consider what the surrounding area is like. Do you want somewhere with a good nightlife? What about the commute to work? What are the local schools like?

Once you’ve sussed this out, you can start browsing.

Look out for these features when reading the description of the house:

  • Floor plans

  • The age of the house

  • Storage space

  • Energy efficiency rating

  • Double glazing

  • Council tax.

You’ll get an idea of how much space you have in the property and get a rough handle on running costs.

Still stumped by searching? Read step 4: Finding the perfect home


Step 5: Getting a mortgage - agreement in principle

Before you start viewing houses in person, it’s worth speaking to your lender about a mortgage agreement in principle.

Think of this as a mortgage estimate. You’ll get a better idea of what kind of mortgage suits you. For example, what you can afford to borrow and how much you’ll pay each month.

Your mortgage advisor will go into two different types of mortgage: repayment and interest-only.

A repayment mortgage is self-explanatory - you pay off the mortgage. With interest-only you pay off the interest on the loan, but you do have to pay the full cost of the property at the end of the term.

Want to know more about different types of mortgages? Read step 5: Getting a mortgage

Get more information about mortgages

Find out more



Step 6: The viewing

Time for the viewing! Here are some basic tips to follow:

  • Bring someone with you

  • Photograph everything

  • Turn up early

  • Feel the walls to check for any cracks

  • Use your nose to sniff out any damp

  • Prepare questions for the seller.

For more viewing tips, read step 6: The viewing


Step 7: Make them an offer they can’t refuse

This is the part where you finalise the mortgage with your lender to pay for the house.

First off, ring the estate agent and make them an offer. If they accept then you’re set. But remember, nothing is final at this point.

If they don’t accept, you may have to go back to the drawing board and reassess your finances.

You should already have your mortgage in principle, but to finish the application you will need:

  • Proof of ID, eg passport or driving licence

  • Proof of current address, eg council tax or utility bill

  • Last three months’ worth of payslips

  • Your most recent P60

  • Details of any credit commitments, eg credit card statements, student loans or overdrafts.

Once they accept, you’ll receive a written contract entitled “Subject to survey and contract”.

Need more info on offers? Read step 7: Making an offer


Step 8: Surveys and conveyancing

When you’ve sent off your mortgage application, there’s a time where everything will need to be checked and double-checked.

You’ll hear the term conveyancing, that just means transferring the ownership of the property from one person to another.

Conveyancing usually involves:

  • Acting as the middle person between you, the mortgage lender and the seller

  • Looking over any contracts that pass between you

  • Dealing with the Land Registry

  • Sorting out stamp duty

  • Transferring money during a sale

  • Checking for structural risks such as subsidence.

Your solicitor should be qualified in conveyancing. To speed up the process you could try and find one that specialises in this area.

A survey of the house will highlight any structural issues. The lender will carry out a survey to make sure it’s a sound investment.

It’s wise to get a company to do a survey for you too. You can make sure independently that the house is structurally sound.

There are a couple of different types of surveys:

  • Valuation only

  • Homebuyers report

  • Building survey.

For more on this part of the buying process, read step 8: Surveys and conveyancing


Step 9: Exchanging contracts and insuring the house

The lender has approved the mortgage, the solicitor is happy with the survey and the seller can hand over the deeds.

There’s only contract signing to do now. Here’s how it goes:

  • You sign the contract saying you’re the legal owner of the house

  • The seller signs their own copy. They then pass it onto the solicitor

  • Each person’s solicitor will swap contracts

  • You and the seller sign each other’s contracts.

At this point you’ll pay your deposit too.

Your lender is likely to insist on you buying home insurance. After all, it’s a big investment on their part.

Although It’s not a legal requirement, it will provide you with peace of mind against issues like flooding, theft or damage.

Remember you don’t have to get insurance through your lender – it pays to shop around.

Ready for more on the big exchange? Read step 9: Exchanging contracts


Step 10: The big move

Are you excited? Time to pack up your stuff and move into your new home! You’ve worked hard for this, so here’s how to move house with minimal fuss.

Read step 10: Moving house checklist

And that’s all there is to it.


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