First Time Buyers

The journey of becoming a first-time buyer in the UK property market is both exhilarating and daunting but with some high street lenders announcing competitive interest rates for the first time in a long time, is now your time to buy?

The process can seem like a minefield so here’s a brief guide to help first-time buyers embark on their property ownership adventure:-

Mortgage Options

Exploring various mortgage options and liaising with a mortgage advisor is recommended whilst you are looking for a property and some lenders offer special rates to first-time buyers. Consult with a mortgage advisor to find the most suitable option for you.

Property Viewings

Viewing the property will allow you to initially assess the condition of the property and get a feel for the neighbourhood.

The principle of “buyer beware” applies to the sale and purchase of all types of property. This means that the seller is under no duty to inform the buyer of any defects or other problems with a property. You will be buying it in whatever state and condition it is in at the moment of exchange of contracts. We would always recommend you obtain a survey that is carried out by a qualified surveyor before you are legally committed to the purchase.

Stamp Duty Land Tax – First-Time Buyer’s Relief

First-time buyers in the UK can benefit from relief from Stamp Duty Land Tax (SDLT)  if the property is your first home. Currently, the relief means that you will pay no SDLT where the purchase price is £425,000 or less and 5% SDLT on the portion from £425,001 to £625,000. First-time buyer relief is not available on properties with a purchase price of £625,001 or more.

In order to qualify for relief, you must meet the following criteria:-

• You and anyone else you are buying with must be first-time buyers;
• The property must be used as your main residence;
• You or anyone else that you are buying the property with must not have had a legal interest in any other property anywhere else in the world – this includes inherited properties.

Legalities and Conveyancing: The Basics

To put it briefly, the legal stages in a purchase are as follows:-

Stage 1:

• we receive a contract for the purchase of the property in draft form from the seller’s solicitors, completed property information forms and copies of all relevant deeds and documents
• we apply for the necessary property searches
• you make your mortgage application (if applicable)
• you liaise with a surveyor to carry out a survey. There are three types of surveys:-
  • Mortgage Valuation Survey: A surveyor instructed by the lender to assess whether the property is good security for their loan. This is not a full survey and limited in it’s scope. You will not be able to rely on the lender’s valuation survey.
  • Homebuyer Valuation and Survey: A concise account of the general condition of the property. It is cheaper than a full survey and will highlight any serious problems.
  • Full Structural Survey: A detailed examination of the property.

Stage 2:

• we carry out a detailed investigation of the legal documents supplied to us by the seller’s solicitors, and where necessary we raise further legal enquiries.

Stage 3:

• when our investigations are complete, all search results have been received and your mortgage offer has been issued, we send you a legal report on the property.

Stage 4:

• contracts are exchanged and a date is fixed for completion; from this moment you are legally committed to purchase the property.
• we will send you a note explaining what pre-completion arrangements you need to make.

Stage 5:

• your purchase is completed on the completion date, and you are able to move into the new property. The purchase price and all legal and other costs (including stamp duty land tax) have to be paid on or before this date
• we register your ownership of the property at the Land Registry

We are often asked why there needs to be a gap between exchange and completion. The two-stage process of exchange followed by completion is useful because it provides an opportunity for you to sort out the practical aspects of moving (e.g. arranging removals) in the knowledge that both sides are legally committed to a fixed completion date. It also enables us to make the legal pre-completion arrangements by reference to a fixed date.

This is simply an overview of the general process and every transaction is unique whether you are purchasing a new build property, a high rise flat or a listed building. If you are looking to start the process, our team would be delighted to speak with you and give you some further pointers on the process.