Buying Your First Home – What To Consider
The Law Of... buying a house by yourselfWith less than 1 in 10 prospective first-time buyers believing they'll be able to purchase a property alone, those buying a home without the financial input of a third party are an increasingly rare breed.
Mark Underhill, a Conveyancing Operational Manager with Simpson Millar, examines house buying in the current market.
Priced Out the Market
The sheer cost of housing in the current market has led to first-time buyers, desperate to secure their dream home, seeking out financial assistance from other parties such as family or friends.Simpson Millar recently conducted research into home buying behaviour
and found that as little as 9% of first-time buyers thought they could afford to go it alone. Regionally, this figure falls to as low as 2% in Wales, 3% in the North East, rising to 11% in Scotland and East Anglia, and slightly higher still, to 13% in the North West.
Even couples are being hit hard, with only 4% of those surveyed saying they could afford to buy a home without the financial support of family or one of the Government's Help to Buy schemes.
This new data shows that the number of go it aloners looks set to continue to decline dramatically – after last week’s release of the English Housing Survey 2014-15
found that the numbers buying alone over the last year fell by half, to 14% from the 1994-95 figure of 29%. If the forward-looking Simpson Millar data (which surveys prospective first-time buyers) is borne out, or even proves to be optimistic on the part of future first-time buyers, we could see a decline of 50% or more in the coming years.
Whether going it alone or seeking assistance, it is imperative that first-time buyers do not enter the market blind.
So what considerations should anybody buying a first home take into account?
Going it Alone
If you're looking to purchase a property without financial assistance, then you will need to ensure your budget covers the additional costs associated with house buying. These include:
- Survey fees
- Mortgage arrangement fees
- Valuation fees
- Stamp Duty Land Tax (banded for properties worth over £125,000)
- Solicitor fees
- Removal costs and furnishings
- Home and contents insurance
The importance of securing the services of a good solicitor, one with a dedicated conveyancing department
, cannot be stressed enough, as it is they who will ensure the whole process runs smoothly, conducting legal searches to check if there are any influencing factors associated with your chosen property that might affect your willingness to buy, along with checking contracts and providing other services to ensure you remain protected throughout.
It is also worth considering the benefits of an income protection insurance policy, which will help with the mortgage repayments, should you lose your job or find yourself unable to work due to accident or illness.
Buying with Additional Financial Support
If going it alone is out of the question and you are among the 38% planning to take advantage of the Government's Help to Buy ISA scheme, or another form of supplementary funding, then the key consideration is to ensure you are legally watertight.
This means, in cases where friends or other financial partners are involved, having a legal contract drawn up to protect all parties, indicating what share of the property is owned by who. For Government Help to Buy schemes, a comprehensive understanding of its terms and conditions will safeguard you from any unexpected and unpleasant surprises further down the line.
A good solicitor can play a key role in facilitating these actions, giving you the peace of mind to know that you are going into the purchase of your first house with all the i's dotted and the t's crossed.
Mark Underhill comments:"Buying your first home can be a daunting prospect and with house prices at their current levels, you need to make a decision on financing the purchase which is suited to your means.""With the range of options now available to you, it pays to seek out independent legal advice before crashing head first into anything you might later regret. The key requirement is to protect yourself against any future anguish that might arise from jumping into a deal without first being aware of all its implications and the consequences they might hold."
Ease the Stress of Buying your First Home
Whether purchasing on your own or with financial assistance, first-time buying can be a stressful and confusing journey. To make that journey as smooth as possible, you should seek independent legal advice from a Solicitor such as Simpson Millar.
As Conveyancing professionals
, we can make sure you understand fully what you will be signing up for so there is no doubt in your mind as to where you stand legally. We are a full service firm so can offer further advice on any aspect of family law
that might affect you, such as:
- Moving in with a loved one
- Protecting your assets in marriage or partnership
- Handling disputes with ex-partners over children
- The ramifications of divorce or separation
We also offer pension and employment advice
, as well as covering all other facets of UK law.
With offices throughout the country, we provide expert legal assistance, wherever you are, whatever your needs.