Residential Property FAQs – First-Time Buyer

How long does the process of buying a house usually take?

In most cases, the average conveyancing for the purchase of a home will take anywhere between 8 and 12 weeks. It can take less time than this or a little longer, depending on the complexity of the property and those involved in any chain. The duration can therefore vary based on factors such as: the time in which the mortgage application process takes, whether any survey undergone reveals any problems or if there is a delay in getting property searches back.

Who do I need to consult when buying a house?

 Estate Agent – they deal with the marketing of the property.

 Lender (mortgage company) or Broker.

 Surveyor – to provide a survey (for you) and/or a valuation (for your lender).

 Solicitor – will deal with the legal processes involved.

Do I need to have a survey completed on the house?

Whilst it is not a legal requirement to have a survey on a property that you are buying, it could end up saving you thousands of pounds in the long run. A surveyor will look at the condition of the building and will highlight any issues or defects that need fixing.

If the survey reveals any problems, you can:

• Ask the seller to fix the problems before you proceed with buying.
• Alternatively, you can choose to renegotiate the sale price to account for the cost of fixing the issues yourself.
• If there were any major problems with the property, you may choose to pull out of the purchase.

There are three types of surveys available: a condition report (basic), a homebuyer report (suitable for buildings under 50 years old) and a building survey (very thorough).

A typical survey will cost you between £500 and £2,000 depending on how much detail you would like to go into. It is prudent to speak to a RICS qualified surveyor for further advice and information.

Please note: a survey is different to the mortgage lender’s valuation.

What is stamp duty and does it apply to me?

Stamp duty is a tax that you might have to pay if you buy a residential property over a certain price. You will have to pay stamp duty on residential properties costing more than £250,000 unless you qualify for first-time buyer’s relief. If you are an eligible first-time buyer, you will pay no stamp duty on properties costing up to £425,000, and a discounted rate on property purchases up to £625,000.

Are there any Government schemes that can help?

There are several Government schemes which can help you buy a home. These include Lifetime ISA (LISA), Help to Buy and Shared Ownership.

Lifetime ISA

• You can use a LISA to buy your first home (for a property costing £450,000 or less) or to save for later life.
• You must be aged between 18 and 39 to open a LISA.
• You can put up to £4,000 into the LISA each year, until you are aged 50. The first payment put into the LISA must be made before you are aged 40.
• The Government will add a 25% bonus to your savings, up to a maximum of £1,000 a year.
• If you are buying a house with another first-time buyer who also has a LISA, you can both use your LISA towards the same property.

Please note: there is a penalty for taking money out of a LISA if you’re not putting the money towards a deposit, or if you draw money out of the LISA after the age of 60.

If you opened a Help to Buy ISA before the end of November 2019, you can still use it for a deposit if you buy a house before December 2030.

Announced in the 2023 Budget, the mortgage guarantee scheme offers lenders the option to purchase a guarantee on mortgages where a first-time buyer has a deposit of only 5%. The scheme will run until the 30^th of June 2025 and compensated mortgage lenders if buyers cannot make payments and the house is repossessed. The guarantee applies to 80% of the property’s purchase price, protecting lenders from up to 95% of any potential net losses. The remaining 5% of the losses is the responsibility of the lender and this ensures that they retain some risk in every loan they arrange.

Shared ownership is where you buy a share of a home from the Landlord, who is usually the council or a housing association, and pay rent on the remaining share. You will need a mortgage to pay for your share, which can be between a quarter and three quarters of the home’s full value. You will pay a reduced level of rent on the chare that you do not own. Later, you can choose to buy a larger share in the property and ‘staircase’ up to 100% of its value.

If you are in need of advice on any of the above topics, or any Residential Property related topics, contact our experienced Residential Property department on 01892 510 222 or email info@bussmurton.co.uk