Welcome to part 2 of our 5-part guide to buying your first home in England.
Last time we looked at why it’s important to get a mortgage in principle (AIP) from a lender before you start viewing properties, and what you need to do to apply for an AIP (click here if you’re at this stage of your house buying journey).
In this second instalment, we’re going to explain the next key stage that follows once you’ve secured a mortgage in principle: Viewing properties and making an offer.
Understanding your house buying budget
The first thing to be clear about when you’re looking for a property to buy is how much you can afford. Don’t forget, your lender’s mortgage isn’t the limit. Your actual maximum budget is the value of your mortgage combined with your deposit (any savings you have to contribute). Let’s illustrate with an example:
Let’s say that you’ve been offered a mortgage in principle for up to £165,000. This is the maximum amount the bank is willing to lend you, based on its assessment of your finances. Now, in addition to this £165,000 mortgage you also have £40,000 in personal savings set aside for buying a house. The maximum you can offer on a property therefore is £205,000. This is the combined total of your mortgage and your personal savings.
How can I find a property for sale in England?
There are two main ways you can search for property to buy in England:
- By registering your details with local estate agents in your search radius.
- By looking at property websites online such as Rightmove and Zoopla.
An estate agent is a property specialist who acts as a mediator between seller and buyer in the early stages of a property transaction. Properties for sale in England are typically listed with an estate agent, and it’s them you will need to contact if you see a property you would like to view.
By registering your details with estate agents, you’re essentially asking to be notified when any new property matching your criteria comes onto the market. However, nowadays it’s typical for estate agents to list the properties they have for sale on popular property websites like Rightmove or Zoopla, which are essentially property search engines offering a range of properties from a variety of estate agents.
As desirable properties can sell quickly, it’s a good idea to set up email alerts so that you are notified whenever a new property matching your criteria comes up for sale. That way you can better your chances of being among the first people to contact the estate agent and to secure a viewing.
Your property checklist – things to consider when viewing a property
The first time you view a property you may be surprised at how little time you have to look around. Property viewings are typically around 10-15 minutes in length, so it’s vital that you come prepared and use the time wisely. You can of course ask for a second viewing, but there’s no guarantees that an offer from another buyer won’t be accepted in the meantime so try to ask as much as you can on the first viewing.
Assess the room sizes of the property to see how they compare with expectations – do they meet your needs? Also look for signs of potential issues such as damp, as this could affect your quality of living or involve costly remedial works to fix.
Here are just some of the questions you may want to ask the estate agent during your viewing:
- How old is the building? (Unless you’re buying a new build).
- Why is the seller moving? (Again, irrelevant if you’re buying new).
- When was the boiler installed and last serviced?
- Are any of the white goods included?
- (If buying a flat) what is the lease length and service charge?
- Has the property been extended in any way?
- Who is responsible for the common areas? (If applicable).
While these questions aren’t exhaustive they’re good starting points for understanding more about the potential home you are buying and any additional costs or charges you may be liable for. Some of the answers may also allow you to negotiate a little on the asking price.
Making an offer
When you are sure you have found the right home for you, you will need to make an ‘offer’ on the property. This is the amount you would like to pay for the property, and it doesn’t necessarily need to be the price the property is advertised at. You can offer less than the full asking price, but bear in mind that your offer may be rejected, in which case you’ll have to decide if you’d like to increase your offer to a higher amount or pay the full asking price, if the seller is holding firm.
It’s no bad thing to go in under asking in the first instance just to test the waters. You never know what the seller will agree to and the estate agent has a legal obligation to put forward any offer you make. You may find that if the property has been on the market a while, the seller may be more open to offers lower than asking.
When weighing up your offer you might also want to take into account any works you want to do on the property, or things that would need to be addressed – for instance if the property needs double glazing or if the gutters need replacing. It can also be a good idea to check the sales history of the property (which you can find on Rightmove and Zoopla) and also compare the price that similar properties on the same road or in the area have recently sold for.
Remind the agent of your position
Being in a ‘strong position’ can also help when you’re negotiating a property price. Be sure to remind the estate agent if you’re a first time buyer or you have nothing to sell, as this is attractive to sellers, and might make the difference between your offer being accepted above a bid from another buyer.
Finally, don’t let your heart rule your head. Decide what the maximum you are willing to pay for the property is and try not to be seduced into a bidding war. Most importantly, never offer more than you can actually afford. You’ll be expected to exchange contracts on the property within weeks of your offer being accepted, and once that occurs you are contractually tied in, so always stick within your budget.
Need free and impartial mortgage advice?
In part three of our home buying guide we’ll look at what happens once you’ve had an offer accepted and you’re ready to proceed. Until then, if you’d like advice on getting a mortgage, contact Threshold today.
- Home buying guide, part 1: Establishing affordability
- Home buying guide, part 3: Applying for a mortgage
- Home buying guide, part 4: Solicitors and exchange of contracts
- Home buying guide, part 5: Completion day
Your home may be repossessed if you do not keep up repayments on your mortgage.