First Time Buyer? What do you need to think about?
By Chris Pease, Joint Senior Partner, Head of the Private Team and Head of Residential Property.
First of all, make sure that you can afford it! Planning your budget is the best way of making sure that you avoid looking at properties which it turns out you cannot afford. And remember it will not simply be a question of having enough money to buy the property you have found, you may also need to pay a fee to a surveyor, the mortgage company who are providing you with a loan, the government in the shape of stamp duty (SDLT) and last but not least, your solicitor.
It is always a good idea to talk to a mortgage lender or broker before you start house hunting to see how much you will be able to borrow. It is also possible in some cases to get pre-approval for the amount of a mortgage loan and get the final go ahead once you have found a specific property.
Even with a mortgage you will still need some savings of your own. The days of mortgage lenders lending 100% of the price of a property are largely a thing of the past.
It is likely that you will need at least 10% of the purchase price of the property you are buying in savings.
Lots of first time buyers put a foot on the property ladder by buying a flat. Bear in mind that this will be leasehold (for technical legal reasons there are very few freehold flats). Therefore your budget will need to take account of the ground rent and service or maintenance charge that will be due for the flat. The service charge covers the cost of things like buildings insurance and the general repair and maintenance of the building and any communal areas. How much is the service charge? Is it likely to increase and are there any large bills around the corner for major items of work?
It is also well worth checking at an early stage who is the landlord or freeholder of the building. Is it a company that specialises in managing leasehold properties? Have the flat owners clubbed together to buy the freehold and therefore manage the building on their own behalf?
These are all just a few of the points or questions you need to bear in mind.
If you have questions about your first purchase of a property, Chris Pease, Joint Senior Partner and Head of Residential Property team, will be able to offer advice and guide you through the purchase.
Please note the contents of this blog are given for information only and must not be relied upon. Legal advice should always be sought in relation to specific circumstances.