Step-by-step guide to buying a home
Buying a home is a complex and often lengthy process - but if you can get your head around the basics of how it works, you’re less likely to be taken by surprise along the way and your home-buying experience will be easier.
This page takes you briefly through each step you’re likely to take when buying a home, and you can find more details by following the links within each section.
The homebuying process works differently in Scotland. You can jump to the section on the Scottish property system for more information.
1. Save a mortgage deposit
You’ll usually need to save a deposit of at least 5% of the price of the property you want to buy. For example, if you wanted to buy a house worth £200,000 with a 95% mortgage, you would put down £10,000 of your own money and borrow the remaining £190,000.
It’s often worth saving more if you can wait longer, as a bigger deposit means you can apply for mortgage deals with lower interest rates.
If you're a first-time buyer, saving into a lifetime Isa will entitle you to a 25% top-up from the government (up to £1,000 a year) on your savings.
If you’re keen to buy sooner rather than later, you could consider the following options...
A Help to Buy equity loan - you save a 5% deposit and the government loans you between 20% and 40% of the property price (depending on where you want to buy) for a new-build home.
Shared ownership - you buy a 25%-75% share in a property, and pay rent on the rest.
Help from parents - even if your family can’t provide cash toward your deposit, some mortgage lenders will allow your parents to use their property or savings as a guarantee for your mortgage.
- Find out more: how to save for a mortgage deposit
2. Find out how much you can borrow
The amount a mortgage provider will lend you will depend on various things, including the size of your deposit, your income and credit score. If you’re buying a property with other people, the lender will also take their finances into account.
Generally speaking, banks will allow you to borrow a maximum of around four-and-a-half times your annual salary, but this varies depending on the individual lender, your financial circumstances and the size of your deposit.
Remember to budget for the additional costs of buying a property, such as conveyancing, surveys, and - depending on the cost of the property and whether you’re a first-time buyer - stamp duty (LTT in Wales, LBTT in Scotland).
- Find out more: How much can I borrow? Mortgage calculator
3. Research your chosen area
If you’re exploring towns or neighbourhoods you haven’t lived in before, it can be worth spending a night or two in the area to check out the commute, shops, restaurants and general atmosphere.
Even if you’ve lived in the town all your life, it’s important to do some research on the area you want to buy in before signing on the dotted line.
Things to look into include:
- School catchment areas: prices can be higher in the catchment areas of highly rated schools.
- Transport links: being close to a railway station or motorway access can push up a property's value.
- Local infrastructure plans: new commercial and housing developments could improve local services, but they could also worsen traffic and pollution levels.
- Flood zones: check flood maps to ensure the area isn't at risk.
- Crime levels: check the frequency and types of crime using the police.uk website.
4. Apply for a mortgage agreement in principle
A mortgage agreement in principle (AIP) is a confirmation from a mortgage lender that they would, in principle, be willing to lend you a certain amount. It can also be known as a decision in principle (DIP).
Having an AIP can make you a more attractive buyer, as it shows the seller and their estate agent that you will be able to secure the amount of money you need to buy the property.
- Find out more: how an agreement in principle can help you secure a property.
5. Register with estate agents
Once you’ve chosen the area (or areas) where you’re interested in buying a home, register with local estate agents. Registering is free and won’t create any obligation on your part.
Keeping in touch with local estate agents could increase your chances of finding your ideal home, as agents sometimes contact registered buyers before listing a property online.
- Find out more: tips on finding a property when house-hunting
6. View properties in person
You’ll inevitably spend plenty of time browsing property portals such as Rightmove and Zoopla, but it’s important to view properties in person, as well as online.
Viewing homes in real life will give you a deeper understanding of their potential (or lack of it) and you’ll be able to gauge whether they give you that indescribable ‘feeling’ that you can't really get from a screen.
When you find somewhere you like, it’s worth viewing it more than once, and at different times of the day, as you’ll be more likely to notice any potential problems.
- Find out more: the most important things to check when viewing a property
7. Make an offer
Deciding exactly how much to offer can be tricky.
It’s quite common to offer below the asking price, but it all depends on the individual property. If other people are interested or it's a particularly hot market, you may need to offer the asking price or more.
Looking at how much other similar properties in the same neighbourhood have recently sold for will help you work out how much the property is worth. You can find this information on websites such as Zoopla and the Land Registry.
Once you’ve decided how much to offer, you can tell the estate agent over the phone or in person, but it’s worth putting it in writing too.
Mention any points that stand in your favour - for example, if you’re a chain-free first-time buyer - and say that your offer is subject to a survey and the property being taken off the market. This can reduce the chances that you'll be gazumped.
- Find out more: how much to offer on a house or flat
8. Apply for a mortgage
You’ll need to think about what type of mortgage you want to apply for. Fixed-rate mortgages are by far the most common, with most buyers choosing to lock in their rate for two or five years.
You'll also need to consider your mortgage term. In the not-so-distant past, most people took out 25-year terms, but terms of 30 and 35 years have become increasingly common for first-time buyers battling rising house prices.
You can see how much your monthly payments would cost based on different interest rates, loan amounts and mortgage terms using our mortgage repayments calculator.
- Find out more: how to apply for a mortgage
Taking out life insurance to protect your mortgage
A life insurance plan can offer peace of mind that your loved ones won't be left out of pocket if you fall ill or die before repaying your mortgage.
Our partner LifeSearch has more than 20 years’ experience of helping consumers find the right life insurance policy. Arrange a call to discuss your options.
9. Find a conveyancer or property solicitor
Conveyancing is the legal process that takes place after your offer is accepted.
In England and Wales, this includes carrying out searches, drawing up and checking contracts, dealing with the Land Registry and paying any stamp duty.
You can use a conveyancer - who might not be a qualified solicitor but will definitely specialise in property - or a solicitor, who you should check has recent experience in property law.
- Find out more: what does conveyancing involve?
10. Get a house survey
House surveys help to assess the condition of the building and detect structural problems.
Although a survey is optional, it’s better to be aware of any issues before buying so you can make an informed decision on how much to offer and budget for any repair work required.
A survey could also enable you to either negotiate the purchase price down, or ask the seller to fix any problems.
Surveyors registered with the Royal Institution of Chartered Surveyors (Rics) provide three ‘levels’ of survey, while those registered with the Residential Property Surveyors Association (RPSA) offer two levels. The cost will depend on the location, size and type of property.
Don’t confuse the valuation survey conducted by your mortgage lender with a house survey - they are two different things and you should always have your own survey done independently.
- Find out more about house surveys, including how much they can cost and how to find a surveyor.
- Or if you're buying a new-build property, read our guide to snagging surveys.
11. Research removal companies
If you don’t have a lot of furniture to move into your new property, you could hire a removal van yourself.
But if you have a lot to move, removal companies can help make the process easier - Which? Trusted Traders can help you find a reliable firm near you.
Removal company costs will depend on the number of items you need to move and the distance to your new property, among other things.
Once you’ve found one or two firms you like, check their availability before agreeing a completion date with the seller (see below) so you're able to move on the date you set.
- Find out more: how to choose a removals company
12. Arrange home insurance
It’s vital that you have buildings insurance in place on your new home from the day you exchange contracts - in fact, most mortgage providers will make this a condition of lending.
This is because you are legally bound to buy the property from the moment contracts are exchanged, so if the building were to be flooded or burn down before the day of completion (see below) and you weren’t insured, you wouldn’t be covered.
If you’re buying a new-build property, the insurance doesn’t need to come into effect until the day of completion.
- Find out more: buildings insurance explained
13. Exchange contracts
The exchange of contracts happens when the buyer's and seller’s legal representatives swap signed contracts, and the buyer pays the deposit.
Before the exchange of contracts, you’ll need to have several things prepared in advance, such as a written mortgage offer, an agreed completion date and buildings insurance in place from the day of exchange (or from completion if you're buying a new-build).
After you’ve exchanged contracts you can breathe a sigh of relief, as the agreement for you to buy the property is now legally binding. The chances of anything falling through from this moment are extremely low.
Your conveyancer will lodge an interest in the property, enabling you to pay the seller, and apply to the Land Registry to transfer the deeds to your name.
- Find out more: what's involved in exchanging and completing on a new home
14. Complete and move in
Completion often takes place around two weeks after exchange, but this is flexible and you can agree a convenient date with the seller.
On completion day, the money will be transferred to the seller and you can then collect the keys from the estate agent and move into your new home.
Next comes the much more enjoyable task of starting to furnish and decorate the property to your taste - and maybe even taking a moment to simply relax. You’ll have earned it!
- Find out more: what you need to do when moving house
Video: the process of buying a house
In this short video, property TV presenter Jonnie Irwin runs through the steps you'll need to take when buying your first home.
Buying a house in Scotland
The homebuying process in Scotland works differently from England, with greater protections in place for buyers and sellers.
Most significantly, when a sale is agreed upon, the property must be withdrawn from the market - meaning gazumping isn't allowed.
The sale also becomes legally binding much earlier, so if the buyer or seller pulls out without a justified reason, they could be taken to court for breach of contract.
The key differences are as follows:
Home Report
Most properties listed for sale in Scotland must have a Home Report. This report provides potential buyers with key information about the property.
The report is split into three parts, as follows:
- Survey and valuation: includes an assessment of the property's condition (including the roof, external walls and plumbing) and a valuation. If the property is old or non-standard, you may want to get a more detailed building survey before you buy.
- Questionnaire: includes key details such as the property's council tax band, parking arrangements and any major historic issues (such as flooding or wood rot).
- Energy report: includes an energy performance certificate, which grades the property's energy efficiency
Off-plan, newly converted and seasonal holiday homes that can only be used at specific times of the year don't require a Home Report.
Making an offer
Rather than setting a high asking price and negotiating downwards, sellers in Scotland usually advertise properties for 'offers around' or 'offers over' a certain figure. Some properties are available for a fixed price, but this is less common.
In many cases, a deadline for making an offer will be set and you'll need to submit a sealed bid in advance of that date.
Your solicitor must send your offer in writing to the seller's solicitor. This will include a proposed 'date of entry' on which you plan to move in and any specific conditions.
The seller doesn't have to accept the highest offer. For example, they may prioritise a chain-free buyer over the highest bidder.
Appointing a solicitor and concluding the missives
You'll need to instruct a solicitor early on in the process, before you make an offer on a property.
Your solicitor should explain the Home Report to you, check any planning permission issues, and put together your offer.
Once your offer has been accepted, your solicitor will agree the contract with the seller’s solicitor. This is called ‘concluding the missives’. Once the contract is signed, it's legally binding for both the seller and buyer.
Conveyancing process
After concluding the missives, the solicitor will undertake the conveyancing process to transfer ownership of the property.
This will involve them:
- checking the property's title and deeds
- checking the property's legal ownership and ensuring the seller isn't bankrupt and thus disqualified from selling
- explaining any 'title burdens' to you – these are conditions you will have to abide by as the new owner
- checking whether any planned local developments could affect the property
- checking that any work on the property had the correct permissions
- paying the money to your seller's solicitor on the date of entry (the day you get the keys).
Settlement
On the date of entry that’s agreed in the contract, you'll pay the whole of the purchase price in exchange for the keys to the property. This is called 'settlement'.
Your solicitor will pay any Land and Building Transaction Tax (LBTT) that is due, register the change of ownership with the Registers of Scotland, and lodge title deeds with your mortgage lender.
Buying a new-build home
The process of buying a new-build home works differently. Most properties are sold at a fixed price, often before the home has been built (known as buying off-plan)
Instead of you making an offer, the builder makes an offer to sell the property to you. This will come with a list of conditions.
You'll need to arrange a mortgage before accepting the offer. Once you've accepted the offer, it will become a legally binding contract.
Buying a tenement property
Tenement properties in Scotland include flats in converted houses and high-rise blocks.
If you buy a flat in a tenement property, you'll own the flat, a share of the common areas and a share of the land upon which the property is built.
Tenement properties come with title conditions that apply to all flats - for example, not permitting commercial use.
Generally speaking, flat owners share the cost of repairs to the building or communal areas. Sometimes a 'factor' is appointed - this is a person responsible for managing and instructing repairs.
If you're thinking of buying a flat in a tenement building, ensure you take specialist advice from a property solicitor.
