Buying a House: A Step-by-Step Guide

Buying a house can seem like a complicated process but our 9 step guide is here to help. Whether you’re a first-time buyer or need a refresher for your next property, read on to find out the stages involved in buying a house.

Laura Whateley, Brean Horne Last updated on 29 July 2022.
Buying a House: A Step-by-Step Guide

Getting on the property ladder is a huge life milestone, but it can feel a little bit complicated or long-winded at times. Whether you’re a first-time buyer or moving on to your next home, below we explain the 9 main stages of buying a house to help you understand how the process works.

Work out what you can afford

The first stage of buying a house is working out exactly what you can afford to pay and how much you’ll need to borrow.

Using a mortgage calculator can give you an idea of how much of a mortgage you can afford on your own and with another person.

Aside from your mortgage, there are lots of other costs to factor in when you buy a house including:

If you would like professional support and advice during the house buying process, you may want to consider using a mortgage adviser. The cost of a mortgage adviser can vary depending on the size and type of mortgage you are applying for. The fees can also be based on commission or a fixed fee. Some advisers won’t charge you anything, but instead receive commission from the lender once you agree on a specific mortgage. You can also speak to a mortgage advisor directly from a lender whose advice is free but they will only be able to recommend the lender's own products specifically.

It’s also worth thinking about whether you’ll be able to afford the lifestyle you want once you’ve moved in. For example, if there will still be money in your budget to buy a car or take a holiday.

Get a mortgage in principle

Once you know how much you can afford, it’s important to apply for a mortgage in principle from your lender.

A mortgage in principle, also known as an agreement in principle, is a certificate that shows how much money a lender may be prepared to loan you.

You can apply for a mortgage in principle without a full credit check and it’s not legally binding. So you don’t have to follow through with the loan if you change your mind about buying. It’s also not guaranteed that a lender will loan you a particular amount.

Although it’s not binding on the lender’s part, getting a mortgage in principle shows sellers that you are serious about buying and could put you in a stronger position when you make an offer. A mortgage in principle can last anywhere between 30 and 90 days, depending on your lender.

It's worth noting some lenders will only allow you to get a mortgage in principle once you have found a property you are looking to move to.

Find your ideal home

Dedicate time to researching the types of properties and locations that you want to live in. It’s worth making a list of must-haves and deal breakers to help you get a clearer idea of what you want. For example, the number of bedrooms you need or whether property is leasehold or freehold?

Online property portals Rightmove and Zoopla can help you filter down suitable properties in different locations. Tools such as our Map My Commute tool can also help you find the ideal property location to live based on your daily commute time. It’s also worth registering with local estate agents for extra help with your search.

When you start viewing homes, keep an eye on local house prices and sale prices, this will give you an idea of the market rate for properties similar to the one you would like to buy. It will also help you negotiate at the offer stage if the asking price is too high.

It helps to visit new areas at different times of the day to get a sense of the local amenities, transport links and community.

Put in an offer

You can put an offer in through your estate agent and if it’s accepted you should ask for the property to be taken off the market.

In Scotland, you will need to make a formal, written offer, which the seller’s solicitor will handle. This will include information such as any conditions you would like to be met before the sale goes ahead. If there is more than one offer, a closing date is set for the seller to accept or reject offers.

In England, Wales and Northern Ireland, the deal is not legally binding until the exchange of contracts. In Scotland, this process is called missives. Once the seller has accepted your offer and its terms have been ironed out by both your solicitors, the contract will be legally binding.

Sometimes sellers pull out of a deal because another buyer has agreed to pay more money than you have. This is known as ‘gazumping’ and can be disappointing and costly if you have already spent money on house surveys.

It may be worth considering a home buyer insurance policy at this stage of the buying process. Should the sale of the house fall though, this type of insurance may cover some of the money you pay when buying a home or buy-to-let property, such as conveyancing fees and survey costs.

» MORE: Learn about the cost of buying a home

Apply for a mortgage

Once your offer is accepted, it’s time to apply for a mortgage though it doesn’t have to be with the same lender that gave you a mortgage in principle. You might decide to use a mortgage broker who can guide you through the process and suggest the most suitable mortgage products.

Mortgage providers have different ways of working out whether to approve an application and many consider the following:

Being extra careful with spending in the run-up to your mortgage application can help demonstrate how well you manage money. Avoid applying for other forms of credit for six months before you apply for a mortgage. Making too many credit applications can damage your credit score as it suggests you rely on credit and may not be able to repay what you borrow.

» MORE: Tips for applying for a mortgage

Hire a conveyancer

You’ll need to hire a conveyancing solicitor or a licensed conveyancer to handle all of the legal paperwork for your property purchase. According to the homeowners’ campaign group, HomeOwners Alliance, conveyancers tend to charge around £850 to £1,500 but fees can be higher for leasehold properties.

The conveyancing process takes around 12 to 16 weeks. In England, Wales and Northern Ireland, your conveyancer will get to work carrying out local authority searches and putting together contracts ready for exchange and completion. You can use a solicitor from anywhere in the UK; they don’t have to be based in the town or city where you live or are buying.

» MORE: Conveyancing fees

Get a house survey

Once the seller has accepted your offer, it’s wise to arrange a house survey – and your mortgage provider will expect you to have a mortgage valuation, though you may still prefer to have a more detailed survey.

A house survey provides a detailed inspection of the property. It looks at the property’s condition, overall value and highlights any major repairs or maintenance work that may be needed. For example, if the property has subsidence damage or the roof needs repairing.

Again, the system works differently in Scotland, where the seller has to supply a home report, Energy Performance Certificate and a property questionnaire before marketing a property.

» MORE: What home buyers need to know about getting a house survey

Exchange contracts

The exchange of contracts is a process that makes the property sale legally binding in England, Wales and Northern Ireland. That means that neither party can pull out of the deal without paying damages.

After an offer has been accepted, the conveyancers will collect information to include in the contracts before they are exchanged.

In Scotland, conveyancing will take place after the Missives process has been completed and you have agreed a contract with the seller. You may have to pay a holding deposit of between £500 and £1,000, but there are also financial penalties in the contract if you decide to pull out of the deal. This process can take between two weeks and several months, depending on the complexity of the negotiations.

When you exchange contracts, you’ll need to pay a lump sum called an exchange deposit which is usually around 10% of the property purchase price.

The exchange of contracts usually happens anywhere between one and four weeks before the completion date. But this can vary depending on those involved in the deal and if you’re part of a property chain.

Prepare for completion

The final stage in buying a house is completion day, known as settlement in Scotland. This is when the money is transferred to the seller through a conveyancer and the buyer can pick up their keys and move in.

Preparing for your completion day in advance can help make the process run more smoothly. For example, arranging for a house removals firm to pack up your belongings and transport them to your new home.

It’s important to stay in regular contact with your conveyancer so that you’re aware of any issues that may delay the move.

And be sure to have your paperwork and bank details to hand in case you need to confirm details about your mortgage agreement or the transfer of funds to the seller.

» COMPARE: Mortgage deals and rates

Image source: Getty Images

About the authors:

Laura is a journalist and author, writing about money since 2008. Including writing for The Times for 9 years. She believes finance doesn't need to be complicated. Author of Money: a user's guide. Read more

Brean is a personal finance writer at NerdWallet. She covers a range of financial topics and has written for consumer titles including Which?, Moneywise and The Motley Fool. Read more

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