Top tips for first time buyers

Buying your first home can be overwhelming. At MSB, we’re here to offer practical tips and insights to help first-time buyers navigate the process smoothly. MSB Associate Helen Schofield tells us more about the legalities, credit scores, house prices and more.

 

What are your top tips for first time buyers?

• Get your finances in order.  Don’t move funds around in your accounts as we need to see statements for all accounts where funds have been transferred to/from prior to completion, so the more you move them, the more statements you will have to provide. Be transparent and proactive in providing documents as we can’t complete until we are completely satisfied with the paper trail of funds.
• Budget for your fees. It’s important to budget for various expenses when buying a house, including legal fees, survey costs, mortgage broker fees and insurance, then you know what to expect and can save accordingly.
• Make use of the technology offered by your conveyancer because it can speed up the process. So, complete your ID check via a secured app, correspond by email and make use of DocuSign if you will struggle to print and post documents.
• Consider how you will hold the property following completion if you are buying with a partner. Will you need a deed of trust to protect individual interests and your deposit funds?
• To avoid delays, it’s recommended to instruct the surveyor early in the process. This ensures that the survey can be completed promptly, allowing the purchase to progress smoothly.
• Avoid taking out any credit agreements prior to completion as it can impact your mortgage and affordability.

What are the challenges that most first-time buyers face? 

Not knowing or understanding the process. Speak to your conveyancer if you have any queries and compile a list of questions you have after receiving your report on title. Pick up the phone and speak with your conveyancer if you need support. MSB solicitors send a helpful flowchart to clients to explain the conveyancing process and will shortly be launching an app where clients can check the progress of their transaction and see the outstanding steps to completion.

What is the average cost of a house in the north of England?

Most of the sales in North West over the past year were semi-detached properties which on average sold for £242,816. Terraced properties had an average sold price of £167,578 and detached properties averaged at £425,330.

North West, with an overall average price of £240,206, was similar in terms of sold prices to nearby Yorkshire and the Humber (£236,592), however, was more expensive than North East (£189,838) and cheaper than East Midlands (£262,816). The most expensive area within North West was Cheshire (£306,311) and the cheapest was Lancashire (£200,024).

In the past year house prices in North West were 3% down on the year before and similar to 2021 when they averaged at £236,336. (Taken from Rightmove)

How much deposit do first time buyers need to put down?

This is dependent on the lender. Some will accept 5% but it is most common for 10% deposits to be required.

Has it become harder to buy properties over the past 20 years? If so, why?

There are a lot of additional requirements of lenders now that conveyancers must comply with, and the funding checks we have to carry out have become more in-depth and stricter. This doesn’t necessarily make it more difficult to purchase a property but it can lengthen the process depending on the complexity of a transaction and the nature and source of the deposit funds.

What kind of research do first time buyers need to do?

• Instruct a mortgage broker so that you can access the best interest rates available to you from multiple lenders.
• Compare conveyancers in your area and instruct based on rating/reviews rather than price. Ask to speak with a member of the team once you have a quote to see if they can meet your expectations.
• Look at the previous sales history of the property you are buying and those local to it to see if the property is a good investment. You don’t want to commit to buying a property that requires a lot of remedial work if you will find yourself in negative equity once you have put thousands of pounds into the property and can’t make it back or make a profit when you sell.
• Look at the different ways property can be held if you are buying with a partner, i.e. joint tenants and tenants in common, and whether you will need a deed of trust to protect individual interests and your deposit funds.
• Get a survey. It may cost you about £600 now but could save you thousands of pounds later on and can be used to negotiate a lower purchase price.

Should they improve their credit score. If so, how?

• Don’t take out any credit agreements prior to completion as it can impact your mortgage and affordability.
• Keep a consistent payment streak on any credit agreements you already have.
• Make use of a credit score website where you can track your credit score and follow advice on how to improve your credit score. Credit Karma offer a free service which is easy to use and provides user-specific advice.

MSB offers expertise in various areas including sales, purchases, re-mortgages, new builds, shared ownership, leasehold matters, transfers of equity, co-habitation agreements, wills, and deeds of trust. Contact us today for more information.