Step by step guide: How To Buy A House

by | Oct 29, 2022

Home $ How to buy a property $ Step by step guide: How To Buy A House

Introduction

When people enter the executive world, many begin their professional journey with one goal in mind: everyone wants to buy a house of their own someday. The sooner – the better!

Having a place to call “home” gives you a sense of security. You no longer stress monthly rental payments or fear losing the roof over your head. Therefore, if you can afford to buy a house – well… you should do it.

However, before taking any steps, you must understand concepts like house mortgage, home insurance, property valuation and many more. Therefore, here below is a comprehensive and helpful guide on how to buy a house.

What is The Average Price to Buy A House in The UK?

Throughout the world, property valuation depends on multiple factors. Surely, one of the most impactful is the location of the house you are willing to buy. The monetary value differs from country to country and town to town. For example, a furnished property will cost much more than an unfurnished piece of land. 

The same rules apply to properties in the United Kingdom. If you’re confused about how to buy a property in the UK, you can judge the total cost based on different factors. The monetary value varies according to the house’s location, size, features, further constructions and other pros and cons.

In 2022, the average house price in the United Kingdom is around £277,000. However, you should consider other costs associated with the latter, such as house mortgage, stamp duty land tax and council tax, just to mention a few.

What is the Lowest Price to Buy A House in The UK?

Currently, the lowest price to buy a house in the UK is £80,299, in the town of Shildon. However, the monetary value of every property primarily depends on its location.

The following is a list of the ten cheapest towns to buy a house in the country:

  1. Shildon
  2. Ferryhill
  3. Fagley
  4. Cleator
  5. Nelson
  6. Edlington
  7. Stanley
  8. Loftus
  9. Moor Row
  10. Peterlee

Is it Worth it to Buy a House in London?

London is the capital city of England and the United Kingdom. It has seen tremendous economic progression in the past few years, and the numbers continue to rise. 

Therefore, if we look at capital appreciation, the real estate market in London is quite profitable. Usually, property valuation increases with time. Hence, whether a house, an apartment, or a simple piece of land – it is surely a good investment to buy a property in London.

Even if you’re short on money and often question how to buy a property with no money, the government and banks offer incentives or schemes that may come in handy, provided you have a good credit history. The main point remains the same – if you happen to have a chance to buy a property in the capital city – don’t let it go even if you may need to use the help to buy properties scheme. 

Can I buy a house in London?

When it comes to buying a house in London, unlike many expect, the government is quite open about who can make a purchase. Besides the country’s residents, other people are also allowed to buy a house in the city. From ex-pats to foreigners – anyone can do so.

However, for people with a residential history of fewer than two years in the country or for those without jobs – the regulations might be much more severe. The government wants to make sure that the buyer is eligible to pay not only the mortgage but other taxes as well—for example, the land and buildings transaction tax or the stamp duty land tax. 

For further details, click here.

buy a gorgeous 2 floor house with private garden

How much deposit do I need to buy a house?

The monetary value of a property depends on factors like its location, size, etc. In turn, a deposit’s monetary value depends on the property’s valuation. 

In the United Kingdom, the buyer must have at least 5% of the property saved to pay the deposit. However, first-time buyers can be demanded for up to 15%.

Consequently, the greater the deposit, the lower your mortgage interest rate and monthly payments will be.

Can I buy a house with a 10k deposit in the UK?

If you have £10,000 saved for your deposit, based on a 5% deposit system, you can buy a house with a mortgage value of about £200,000. 

Here below some examples to let you better understand:

  • £10,000 deposit allows you to have a mortgage of £200,000
  • £20,000 deposit allows you to have a mortgage of £400,000
  • £30,000 deposit allows you to have a mortgage of £600,000

Can foreigners buy a house in London?

With a population of about 8 million, the capital of the United Kingdom attracts investments from not only its own residents but from foreigners as well. 

Therefore, the government of the UK has placed no limitations on foreigners purchasing properties in the country. Thus, as a foreigner, you can easily buy a house in London. Though the regulations would be comparatively rigorous, a visa or residency is not an official requirement.

If you are new to the city, the following is a list of the most suitable neighbourhoods to buy a house in London:

  • Havering
  • Barking and Dagenham
  • Leyton
  • Battersea
  • Bloomsbury

How do I buy a house in London for the first time?

If you are looking forward to buying a house in London for the first time, we understand the immense stress associated with it. Therefore, we have summarised the essential steps which will help you make your first purchase.

  1. Sort out your finances
  2. Get in touch with a mortgage broker
  3. Get in touch with a real estate agent
  4. Start your own research for properties and compelling neighbourhoods
  5. Make offers to the sellers
  6. Finalise the mortgage
  7. Sign the contract

How To Buy A House with an annual salary of £30,000 in the United Kingdom?

With an annual salary of £30,000, it would be almost impossible to buy a house on your own. Even if you manage to do so, it will take years to save enough. However, this challenge can be eased by getting in touch with a mortgage broker and taking a loan.

Usually, lenders can lend you an amount worth 4-5 times your salary. If you are making £30,000, this comes up to between £120,000 and £150,000. In such situations, a mortgage broker can carefully assess the market around you and guide you towards a lender who would be willing to lend you the highest amount.

entrance of a house with private garden

The possibilities for how to buy a house with a fixed annual salary are endless but vary according to your location and neighbourhood. Therefore, a mortgage broker would be the best person to contact regarding the latter.

What Do I Need to Know To Buy A House in The United Kingdom?

Written below is a step to step guide that explains in detail every step to buying a house, from saving for a mortgage to making an offer.

Finalize the total costs

Mortgages and deposits are often talked about when discussing finances. However, things like taxes, broker fees, lender fees, overall legal charges and the move-out costs are not added up. Due to these reasons, the payments often become over-exhausting for the buyer in the potential future. 

Find out how much you can lend

After finding the total costs in the previous step, get in touch with a mortgage broker who can direct you to the best available lenders. You should not only judge them by how much money they can lend you but also by the overall interest rate and package they offer.

Start your search

Once you have established the finances, start looking for your desired house. A real estate agent can always assist you in this regard. 

In addition, keep an eye on ongoing property auctions in your area. Chances are huge that you may find a good deal there. 

Arrange a viewing or visit

When you land upon a house that you think fulfils all your requirements – get in touch with the seller and ask to arrange a viewing. However, if you are not sure about visiting it in person immediately, many sellers also offer virtual viewings.

Make an offer

When you are satisfied with the viewing, consider it time to make an offer. Let the negotiations take place on both ends – so that the final decision benefits both parties.

Sale is confirmed

When both parties agree to the contract, the sale is confirmed. The buyer will receive a memorandum of sale at this point. Next, the contracts would be signed. 

Completion

The contract should be exchanged between both parties. The buyer should then contact a removal company to confirm the move. Lastly, once both solicitors have completed the final payment, the keys will be released to you. 

How to Buy A House To Let it Out?

In the future, if you ever decide to buy a house in addition to your primary residence, you can always buy to let it and make a solid rental income out of it. 

Another alternative would be to introduce new builds or renovations on the last house and rent that out while you live in the new house.

People often apply the build to rent business model and make huge profits from the overall rental yield.

Who Qualifies As a First-Time Buyer in The United Kingdom?

In the United Kingdom, a person qualifies as a first-time buyer when the property they purchase is their first, only, or primary residence. Also, the person should not have owned any freehold interest or leasehold interest in a residential property in the UK (or any other country.)

What Will Happen to House Prices in The United Kingdom in 2023?

Property experts have predicted that house prices in the United Kingdom will fall by at least 10% in 2023 due to increases in interest payments that have not come into occurrence ever since the financial crisis of 2008 happened.

For further details, click here.

nice 2 floor countryside house someone should buy

Conclusion

Even if you are questioning how to buy a second home, the procedure is somewhat similar. However, as a first-time buyer, you are not reasonably well-informed about the real estate sector.

Regardless of your previous experience, if you have read up till now, we can guarantee that you have enough knowledge to begin your quest and buy a house of your own

One last thing from the Lofti team. Consider that housing developments are happening more and more frequently in the UK, especially in London. This is needed to meet the growing demand.

Therefore, good luck from the Lofti team!