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Buying a property in the UK step by step. Guide to 2024

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Buying an property in the UK is the dream of many immigrants who have come here in pursuit of a better life. Although many of these people have been living in the UK for more than a dozen years, many procedures are still foreign to our nation, and this is exactly the case with real estate – our clients come to us with questions not only about the mortgage that will best meet their needs, but also about how the home purchase itself actually works. For this reason, we decided to refresh one of the most widely read articles on our blog. So let’s check out how, step by step, buying a property in the UK looks like.

Buying property in the UK step by step - details in our article.
Buying property in the UK step by step – details in our article.

At the outset, it should be added that a guide entitled “How to increase your chances of getting a mortgage in the UK?” can be very helpful. In the context of raising cash for your own contribution, in turn, an entry on home budgeting will be useful.

1. Choosing the right property

Contrary to what you might think, choosing the final offer need not, and indeed should not, be the first step – applying for a mortgage in the UK takes several weeks and there is little point in tying yourself to this one particular property. However, it is worthwhile to get a good idea of the surrounding market and prepare a list of your requirements. When looking for ads, answer the following questions for yourself:

  • Where exactly would I like to live? Close to the city center or rather in the suburbs?
  • How many bedrooms do I need?
  • Do I plan to expand my family in the next few years?
  • Does any member of my family struggle with a medical condition that requires special housing amenities, such as a ground-floor bedroom?
  • Am I willing to do more or less renovation in exchange for a lower transaction price?
  • Do I care about the garden?

The more you specify your expectations, the easier it will be for you to make a final decision. Keep in mind, however, that a great deal depends on your budget, which you will know only after contacting a credit counselor from Extend Finance, as he will calculate the amount you will be able to borrow from the bank.

Where to look for property to buy in the UK?

In the case of the UK, the real estate market is based mainly on two online portals – Zoopla and Rightmove, and these are the ones you should make for your initial search. After just an hour or two, you will get a basic idea of the current situation in the industry and get a preliminary idea of prices. Real estate agents can also be useful!

2. To accumulate an own contribution of 5% or more

Buying a property in the UK usually involves the need to take out a mortgage – situations in which someone chooses to finance the transaction with cash are extremely rare. Unfortunately, however, in order to borrow money from a bank, you need to meet certain conditions and one of the most important, is to accumulate an equity contribution of 5% or more. Of course, many banks will offer you a better deal if you accumulate 10% or 15% of the value of the property, but it is very difficult to find an institution that will agree to entrust you with funds without preparing a deposit.

Of course, a no down-payment mortgage in the UK is possible, but the criteria for its allocation are quite complicated and many people are unable to take advantage of the financing. It’s worth considering this product, but we strongly suggest that you set your sights on raising a 5% or 10% equity contribution.

However, these are not all expenses. Buying a home in the UK involves paying Stamp Duty tax, legal fees, a possible mortgage fee, the fees of a mortgage broker or a building surveyor who performs home valuations. The cost of buying a house in the UK is usually between £3,000 and £5,000, but a great deal depends on the area you live in and the value of the property itself.

3. Meeting with a credit broker

Make an appointment with a professional credit counselor
Make an appointment with a professional credit counselor

Once you’ve managed to collect most of the amount needed to cover your contribution, you can move on to the next step, which is to consult a broker. In our experience, it’s a good idea to schedule a consultation a few weeks before you hit your savings target, as this gives you time to prepare all the documents and choose a convenient offer.

In the case of Extend Finance, the first meeting is completely non-committal – it’s simply a conversation during which we’ll check your credit score, estimate the amount you’ll be able to borrow and answer any questions that arise. If you like our offer of cooperation, only then will we sign the first documents and move on to the next step together.

4. Collection of documents and Agreement in principle

If you go through this stage, you will most likely buy a property. This is the moment when you will go through all the bureaucracy together, and there will be quite a lot of it – you will need documents proving your current income and identity. Depending on your situation, you will need, for example:

  • Bank statements (so-called bank statements);
  • Income information – employed persons (payslips / P60);
  • Income information – self-employed persons (SA302 / Tax Overview);
  • documents proving identity (e.g., passport / driver’s license / identity card);
  • Documents certifying the address of residence (Council Tax, Water, Gas, Electricity bill);
  • Confirmation of the existence of the deposit (savings account statement).

If the prepared documentation has no errors, your advisor will ask the bank to issue what is called an Agreement in principle, or preliminary credit decision. This is a big step, because once this document is issued, we know that the applicant has passed the risk assessment and there is a real chance of obtaining financing. If any document is missing, or the bank sees some irregularities, we will immediately contact you and determine what needs to be corrected.

5. Offer to buy an apartment and get the seller’s approval

Kupno mieszkania w UK

Once the bank has issued an agreement in principle, buying a property in the UK is as feasible as possible – situations in which problems arise after the issuance of this document are quite rare, and they usually follow fortuitous situations. It is at this stage that you should make the final decision on your future home. Again, we encourage you to use both websites and the services of real estate agencies – the more listings you check, the better.

Regardless of the path you choose, it all boils down to exactly the same thing – once you have selected an offer, go to inspect the property. If it suits your requirements, it’s time to make an offer to the seller, enter into negotiations and finally set the terms. Once this step is behind you, it’s time for paperwork again 🙂

6. Apply for a mortgage and start the conveyancing process

Once you’ve obtained the seller’s approval and pre-arranged the terms of the deal, it’s time to formally apply for a mortgage – once the bank issues a positive decision, you’ll get the financing you need to become a homeowner! Before applying, we recheck all available offers to make sure that the mortgage recommended to you will fit all your needs. As a whole of market broker, we are not limited to one or a few banks. This makes buying a home in the UK is Extend Finance as cheap as possible.

In order to buy an apartment in the UK, one more extremely important condition must be met – care must be taken to verify the legal status of the property. Although self-builds in the Islands are rare, there is still the question of the zoning plan in the area and possible encumbrances, for example, in the form of debts or unfinished inheritance cases. Unfortunately, the only way to analyze the situation is to use a lawyer (solicitor) to analyze the land records yourself. This process is called conveyancing. Although it can take up to several months to verify the legal status of a property, it usually takes much less time.

However, this is not the end of the formalities. Although not legally required, as a buyer you can have your property inspected, this is known as a homebuyer survey. However, buying a property in the UK is a big enough expense and a major enough decision that it is definitely worth spending a few hundred pounds on such a service, especially for older buildings and premises. If this topic is of interest to you, be sure to read the post entitled Building Condition Report.

7. Exchange of contracts

Kupno mieszkania w UK krok po kroku

The exchange of contracts de facto completes the purchase of a property in the UK – it is the final element of the whole process, and it is on this day that the final contract is concluded, from which it is extremely difficult to withdraw.

If the technical condition of the property is good, and the legal status inspected by the solicitor does not raise any objections, there is nothing left for you to do but to sign the contract and pay the deposit. Your solicitor, in cooperation with the seller’s attorney, will carry out the so-called exchange of contracts – from this point, the parties commit to the next steps and in the vast majority of cases succeed in moving to the next stage.

The exchange of contracts is highly formalized, but it is not the final stage of the process. Let’s now move on to a much more pleasant moment.

8. Completion date and move

It has happened – the purchase of an apartment in the UK is behind you. Once the lawyers have exchanged contracts, you and the seller will set the so-called Completion date, which is the day of the ceremonial handover of the keys with the completion of the entire transaction. From that moment on, the property is already yours and all that remains is to take care of the move. It is the lawyers who will take care of the transfer of funds from the bank.

If you are planning to buy property in the UK, you are cordially invited to contact us. Within minutes we will discuss all the necessary details and answer your questions. We have already helped hundreds of people and nothing stands in the way of you also fulfilling your dream of your own four walls!

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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.

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