What advice would you give to first-time buyers?
Buying a home for the first time is a stressful but truly thrilling time for anyone. But it’s a whole new world, and likely the most significant investment (by far) you’ll ever make.
Working as a chartered surveyor for GB Home Surveys has given me a unique insight into the industry and what works best for first-time buyers.
So, to help you out, I’ve compiled a few tips and tricks to give you a head start. There are an awful lot of costs to consider (your mortgage being the biggest but far from the only one). Have a read to boost your confidence as you head into this exciting time.
Save for a deposit
The biggest obstacle to first-time buyers is usually money. Houses are expensive, and even saving up for a ten per cent deposit can take a significant time, especially if you’re already renting a place.
In my experience, the best way to do this is to set yourself (or yourselves) a monthly target. Don’t make it too unrealistic, and don’t beat yourselves up if you miss it once or twice. £500 per month turns into £6,000 per year. After a couple of years, combined with any other income you might get (bonuses, gifts, etc.), you’ll have a nice little deposit pot.
If you’re fortunate, you might be able to get some help from family or friends. This can help an incredible amount, although some lenders insist on a certain percentage of the deposit coming straight from your own accounts.
Remember your legal fees and other costs
I know it’s tempting to max out your budget, but don’t forget about those sneaky extras that people don’t always tell you about. For example, solicitors might cost around £2,000 (although it really depends on the individual).
Once you’ve sorted all your legal stuff, you’ll need to hire a removal company (or stress yourself out with family and friends coming over to help you move a piano).
Get a home survey as well as a valuation
When buying a property, a home survey is absolutely vital. They help by having a trained eye look over every nook and cranny. You’ll then receive your detailed report. With an expert’s opinion, you’ll know exactly what you’re getting in for.
Imagine skipping a home survey, only to exchange keys and legalise the deal, moving in to find that the kitchen ceiling is falling in and the roof’s leaking. Repairs might reach the tens of thousands.
A home survey generally costs a few hundred pounds, but will give you complete peace of mind. This makes it well worth the investment.
Haggle on price
If you’ve never jumped into the property market before, you might be unfamiliar with price haggling.
It can be scary when you find a house you think is just perfect for you. What if they don’t accept your offer or back out?
The best advice I can give is to keep a level and logical head. It might look like your ideal house, but if you pay £20,000 more than its value, is that really worth it?
Think of your initial offer as your foot in the door. After a home survey, you can use the problems (if any are found) to negotiate a lower price, accounting for the repairs.
Calculate your living costs
Knowing how much it costs you to live on a day-to-day basis is so important. It’s possible to focus so much on your monthly mortgage payments and bills that you forget about things like food, medicine, transportation and taxes.
Sit down with a dedicated notebook or spreadsheet and calculate a realistic number. Don’t forget to account for those months when you’ll inevitably spend more due to emergencies or holidays, and so on.
You can slightly reduce your monthly mortgage charge by getting a longer mortgage (30 or 35 years) or putting down a larger deposit. Of course, these have their own setbacks – longer mortgages are much more expensive in the long run, and larger deposits take longer to save up for.
Understand Stamp Duty (although you probably won’t need to pay it)
So far as the vast majority are concerned, Stamp Duty doesn’t apply to first-time buyers. In reality, you have to pay Stamp Duty once the property’s value surpasses £425,000.
If that applies to you, you’ll then pay five per cent Stamp Duty on any additional value. The standard rates then apply.
For example, buying a £250,000 home will cost you £0 in Stamp Duty if it’s your first purchase. However, if you buy a £500,000 home, you’ll pay £0 (0% x £425,000) + £3,750 (5% x £75,000), coming to £3,750.
How home surveys will help
I can’t recommend a home survey enough, especially as a first-time buyer. It’s a small investment but almost always returns much more. You’ll have the reassurance that you’re buying a high-quality, properly valued property and that you won’t end up with buyer’s regret.
Get in touch with us through the contact form below. I’m excited to hear from you and to help you get your foot on the property ladder!
James Quinn
Managing Director, GB Home Surveys
