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Buying a house in the UK – questions and answers (part 1)

kupno domu w uk pytania odpowiedzi

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Buying a house is a very important moment in everyone’s life, so it makes sense to prepare well for it. Many of our clients ask quite similar questions, so there’s nothing preventing us from creating a publicly available article to answer them. We encourage you to read it and afterwards, please check out the second part of the article – UK mortgage – questions and answers (part 2).

Buying a house in the UK - questions and answers part 1
Buying a house in the UK – frequently asked questions and answers

Although there are many articles on our blog that answer popular mortgage-related questions, it is not always necessary to go into the details. Rather, in this post you will find the basic facts, but contained in a nutshell.

It is also important to keep in mind that our answers are fairly general in nature. Sometimes there are exceptions that may work in a completely different way than described. If you have any doubts, I encourage you to consult us privately.

Buying a house in the UK – questions and answers

What do you need for buying a house in the UK?

To get a residential mortgage and buy a house in the UK, you need to meet a number of conditions. The most important of these are:

  • having a stable, documented and legal income,
  • having sufficient creditworthiness
  • having a deposit of at least 5% of the value of the property (February 2023)
  • regularised residence in the UK (settled or pre-settled status).

How much deposit do I need to buy a house in the UK?

Basically, to take out a residential mortgage, you will need a deposit and this could be as little as 5% (source: How much deposit do I need for a mortgage?). You can have a larger deposit, but 5% may enables you to apply for a loan. (February 2023).

Let’s not forget about additional fees that will come with the purchase (see one of the questions below for details).

Buying a house in the UK without a deposit

Our readers sometimes ask us whether it is possible to buy a property in the UK without a deposit. Currently, which is February 2023, buying a house without a deposit is impossible and there are no ways to get a mortgage with an LTV of more than 95%.

What is the cost of buying a house in the UK?

We mentioned above that buying a house or flat in the UK involves additional fees that you need to be prepared for. It is difficult to estimate precisely how much these will be, as every situation is different, but the following list of possible fees should prove very helpful.

The cost of buying a house or flat in the UK consists of:

  • a deposit of at least 5% of the value of the property
  • valuation fee charged by some banks when checking the value of a property. On average it is around £100 (source: Halifax)
  • product fee or mortgage administration fee, information on these fees is given in the key facts document or ESIS (European Standardised Information Sheet)
  • homebuyer survey
  • mortgage broker fee
  • costs of conveyancing, charged by the solicitor responsible for verifying the legal status of the property and transfer of ownership
  • Stamp Duty Land Tax paid by people buying a property. IMPORTANT: First Time Buyers will also pay Stamp Duty Land Tax if the price of the house exceeds £425,000.

For further information, please check out: The cost of buying a house and moving.

How long does it take to buy a house in the UK?

It is difficult to give a definite answer, as the duration of the purchase depends on the buyer, seller and bank as well. In practice, it is uncommon for a transaction to take less than 8 weeks. Normally, our clients move into their new property within 3-5 months of the seller accepting the purchase offer. If the legal situation is unclear, the whole procedure can take much longer. You can read more about this in the article How long does it take to buy a house in the UK.

Is cash buying a house in the UK possible?

Buying a house with cash is very rare, but it is entirely possible and legal. Of course, this is the case if the cash comes from documented sources. Usually, however, the money is sent by bank transfer and not in physical form.

Buying a house in the UK - questions and answers part 1
Buying a house in the UK – questions and answers part 1

What should you take into account when buying a house in the UK?

It all depends on your situation and priorities. Our clients who are planning to buy a house pay attention to, among other things:

  • floor space
  • number of bedrooms and bathrooms
  • presence of a bathroom on the ground floor
  • status of the property (freehold or leasehold)
  • location of the property
  • the surrounding area, for example distance to the city centre, distance to schools and clinics
  • garden

It is also worth analysing the quality of the surrounding schools, the presence of parking spaces and the quality of the internet connection. We invariably recommend that you take notes for a week or two on what you like and do not like in your current place of residence, because in this way, evaluating your new property will be much easier.

If buying a house does not interest you and you are looking for a flat for yourself, it is essential to consider the duration of the lease, the cost of the ground lease and the amount of common expenses, the so-called service charge.

How do I start buying a house in the UK?

To make your UK home buying experience easier, take care of the following first and foremost:

  • stable earnings
  • the opportunity to save money on a regular basis
  • low debt
  • creditworthiness and credit score

Before you start choosing a property in the UK, you should definitely consider whether your household finances are in good shape. We’re talking about both income, which is worth raising, but also expenses, such as those related to credit cards, impulsive purchases or high bills. The more money you have left over at the end of the month, the easier it will be to build up a deposit of at least 5% of the value of the property.

At the same time, you should monitor and gradually improve your credit score, which you can check using checkmyfile.com. All these measures will help you to prove to the bank that you will be a reliable borrower and increase your chances of getting a mortgage and thus buying a house.

What documents are required to apply for a mortgage?

To start the process of applying for a mortgage, you should have the following documents:

Person employed:

  • Monthly payments – Payslips 3 months back
  • Weekly payments – Payslips 13 weeks back

Person self-employed:

  • SA302 and Tax Overview in 2 years’ time

Ltd. director:

  • SA302 and Tax Overview in 2 years’ time
  • Statement of company account – 3 months back
  • or the company’s accounting for 2 years

Other documents:

  • Personal current account statement – 3 months back
  • Proof of address – for example, gas, electricity, water bill, Council Tax, credit card statement
  • Identity document – (passport, driving licence, identity card)
  • Confirmation of deposit – savings account statement
  • P60 for the last 2 years

However, it is important to bear in mind that these are only the basic documents required for the application. Depending on the situation, applicants may be asked for additional documents.

How much does a broker cost in the UK?

The amount of the broker fee varies depending on the level of service provided and the broker company. In practice, most mortgage brokers in the UK charge between £400 and £500 for the service (source: How much does a mortgage broker charge).

We hope this information is useful and will make buying a home in the UK easier for you. If you need the help of a mortgage broker who deals with all banks, we welcome you to contact us. Our staff are waiting!

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Think carefully about securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.

Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. Conveyancing services and some forms of Buy to Let mortgages are not regulated by the Financial Conduct Authority.

Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts
secured on it.

Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. Conveyancing services are not regulated by the Financial Conduct Authority.

Extend Finance nor The Right Mortgage Limited can’t provide advice regarding Personal Pensions, Pension planning or investment planning advice. You must seek independent financial advice from a suitably qualified professional financial adviser who may charge you for advice.

Wills, Will writing, Trusts and Trust planning are not regulated by the Financial Conduct Authority.

* We will receive a small fee from CheckMyFile for any referrals.

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