Maybe you’re a first-time buyer looking to get onto the property ladder. Maybe you want a quick refresher before buying your next home. Either way, here’s a short step-by-step guide to the house buying process – from finding your dream property to getting the keys, and everything in between.
The house buying process explained
Step 1: Decide if buying is your best option
You don’t need us to tell you that buying a house is a big commitment. So, before you start scrolling through the property listings, take a moment and ask yourself these questions as a first step:
- Is your situation (and income) stable enough that you could see yourself owning a property for a long time?
- Can you afford the type of property that makes sense for your life over the next few years?
- How much mortgage will you be able to borrow, and how much of your income would your monthly mortgage payments be? Generally, mortgage lenders don’t want you to put more than 30% of your income towards your mortgage each month.
If you’re happy with your answers, consider getting a mortgage in principle (MIP) – you can get one for free with Habito.
An MIP is a certificate showing that a mortgage lender would, hypothetically, loan you the money you need. It’s not a formal mortgage offer and doesn’t involve a credit check like an agreement in principle (AIP), but it does show estate agents and sellers that you’re a serious buyer.
Step 2: Find a house you can picture yourself in (and make an offer)
It’s house-hunting time.
Whether you’re browsing properties online or using a real estate agent with knowledge of the local housing market, this stage of the house buying process can take anywhere from a few days to a few months – and sometimes longer.
Beyond arranging and attending property viewings, you may want to spend some time learning about the area. Check out the schools, transport links, shops, pubs, and other local amenities online or in person.
Then, once you’ve whittled down your shortlist to a select few, use a website like Rightmove or Zoopla to see how much other homes in the area have sold for. This will let you judge whether the asking price is fair and help you make an informed offer.
Found a house that ticks all your boxes? Make an offer through your estate agent. If your offer is accepted, congratulations! Take a moment to celebrate and catch your breath.
You’re just getting started.
Step 3: Set the mortgage ball rolling
Unless you’re buying in cash, you’ll need a mortgage to fund your property purchase. The mortgage application process can take anywhere from four to six weeks.
Here’s what it looks like:
- Documents and form-filling: This is the quick part. It should take you around a day or so to gather your documents and fill out the paperwork. If you’re using a mortgage broker, they’ll make sure you have everything you need before you submit your application.
- Submission and review: It can take a lender up to six weeks to review your application. They’ll carry out a credit check and an affordability assessment to make sure you’re able to repay the loan. They’ll also do a valuation on the property you’re buying to check that it’s worth what you’ve offered for it.
- Decision time: After your lender has reviewed your application, one of three things can happen:
- Your application is declined. Don’t worry if this happens – all is not lost. Here’s what to do if your mortgage is declined.
- The lender wants more information. If this happens, you may need to supply extra documents or answer a few more questions.
- Your application is approved. If all goes smoothly, you’ve got yourself an official mortgage offer!
Waiting for a mortgage decision can feel like an eternity, but the good news is, you’ve got the next part of the house buying process to keep you busy.
Step 4: Property searches and surveys
Once your offer is accepted, you need to hire (or, technically, “instruct”) a licensed conveyancer or a conveyancing solicitor to carry out the conveyancing and property searches.
Conveyancing is the legal process of transferring a property from one owner to another. It can take around eight to twelve weeks.
While your mortgage application is in process, your solicitor or conveyancer will carry out property searches. They do this by contacting different authorities for information about the property you want to buy, the land it’s built on, and the surrounding area.
Essentially, they want to check for anything that might affect its value or your experience living there. Like making sure it’s connected to the water and sewage mains, checking whether it’s on a flood plain or in a conservation area, and making sure the land your new house sits on isn’t contaminated from previous use.
Meanwhile, you’ll also need to hire a qualified surveyor to carry out a property survey. This is a detailed inspection on the condition of the property you’re buying. There are several different types of survey (here’s more detail about the different types of survey), but they all set out to do the same thing.
Your surveyor will check for structural problems – they’ll look at the bones of the house to find any problems with the structure, wiring, plumbing, roof, and insulation.
Although it's an extra cost, the benefits of a survey usually outweigh the expense, even if your future home is relatively new. For example, if your survey uncovers £10,000 worth of repairs, you could renegotiate the final sale price to account for this, or ask the seller to make the repairs before you push ahead with the purchase.
Step 5: Dot the ‘i’s and cross the ‘t’s
Once the conveyancing and surveys are complete, and everyone is satisfied that the house isn’t hiding any nasty surprises, it’s time to start finalising the arrangements.
At this point, you’ll be checking every detail of your mortgage agreement (even a simple typo can set the process back several weeks), preparing to transfer your deposit, and agreeing on dates between your solicitor and the seller’s solicitor for the exchange of contracts. Your solicitor will also check that all of the conditions of your mortgage have been met and that you haven't gone bankrupt since your mortgage was agreed.
This is also a good moment to arrange buildings insurance and life insurance if you haven’t already. You’re about to be responsible for a house, and most of us won't make a bigger investment in our lifetimes.
Step 6: Exchange the contracts
Until this stage of the home buying process, there’s always a chance that something outside your control will go wrong and make the sale fall through. But, once you’ve exchanged contracts and transferred the deposit, no one can back out. You’ll have a legal document in your hand confirming that you’ve bought the house.
To pay your deposit, you’ll need to contact your bank to arrange a special CHAPS (Clearing House Automated Payment System) payment. Most banks only allow you to transfer a limited amount each day (the limit varies but can be between £10,000 – £100,000) – but with CHAPS there’s no maximum. You’ll usually send your deposit to your solicitor, who will forward it to the seller’s bank.
With your solicitor, you’ll then sign and swap contracts with the seller and agree on a date for completion.
Step 7: Complete and take the final steps
You've made it to the final stage. Nice work. Compared with the earlier steps, completion and the last pieces of paperwork are pretty quick to process.
Before your agreed completion date, you’ll get a breakdown of all the money you need to pay to your solicitor. This is usually the fee they’re owed, any outstanding deposit, and the money for the stamp duty tax, which you'll have to pay within 14 days of completion.
After the exchange, the solicitor will have you sign the paperwork that updates the land registry and puts the title deeds in your name. Signing these legal documents is usually witnessed before the paperwork is sent to the seller’s solicitor.
Finally, your solicitor will contact your lender to have the money you’re borrowing transferred to the seller’s solicitor. This completes the purchase and clears the seller's mortgage, meaning their bank has no further claim to what is now your house.
And that’s it. You're now free to pick up your keys and start moving in. Welcome home!