Diary of a First Time Buyer (Part one)
Posted on 15 June 2019
Buying my first house
It was back to reality. Two years travelling had come to an end, and we were now back in the UK. The travelling had been great, but now in our late twenties we were ready to put down some roots. But, this was easier said than done. We had little savings, and neither of us had had any proper understanding of what was entailed in purchasing a property. No money. No experience. So how were we to get going on achieving our dream?
We knew the essential first step was saving up for the dreaded deposit. We planned to save enough for a 10% deposit of the total house price. Some of our friends tried to convince us that 5% was sufficient - which, to be fair, had worked out perfectly for them. But we felt that a 10% deposit would give us better options for mortgage rates. We would also have slightly cheaper monthly repayments.
A visit to the bank turned out to be a very important first step. Was there a scheme available that would help us start saving? We discovered the government’s Help to Buy ISA: for every £200 we put in the government would put in £50. This seemed like a good deal to us- and it is! What we particularly liked was the fact that we could have one each. This meant that we could be getting an extra £100 a month – as long as we each put in £200. The bank informed us of other options available including lifetime ISAs, but as we were both first time buyers it made sense to go with the Help to Buy ISA. An important point is that the Help to Buy ISA closes to new business from November 2019, although this is not quite bad as it sounds! If you get in by November 2019, you'll still be able to save in it until 30 November 2029 – and the bonus will be added as long as you use it for a deposit by 1 December 2030. Bear in mind also that the most you'll get on the bonus is £3,000. Furthermore the bonus is only available for properties with a purchase price of £250,000 or less, or £450,000 if the property is in London.
As you would expect, there are quite a few websites that will give you all the information you need on ISAs, but I would advise to take the time and really think about what would be most beneficial to you. Associate Solicitor, Laura Godfrey, has written a really useful blog that highlights the differences between these two ISA’s. You can read her blog online at Pardoes.co.uk/news-and-media/blog.
Anyway, back to us. With the accounts all set up, we began saving. We were careful to set out a budget and have a target of how much we wanted to save each month. After about a year and a half of saving we finally had enough to meet our 10% deposit target. Now came the scary bit…. actually finding and purchasing a house!
The experience of finding our own house proved to be exciting, daunting and hard work all at the same time. But we were determined were also quite methodical. We knew the area we were moving to fairly well and carried out online searches checking crime rates across specific areas. We also checked schools, retail/ community facilities, leisure amenities and transport links. One needs to find out what kind of community you are moving into: this matters every bit as much as the number of bedrooms or the size (or not) of the garden.
Next, a visit into the town centre to the main estate agents. We spoke directly to six different agents from six different companies. We wanted to get as much diversity as possible and to know exactly what each was offering. Just like the buyers on ‘Location, Location, Location’ we came armed with our essential set criteria - garden, parking, a minimum of two bedrooms, a terrace type property etc. Estate agents actually liked our ‘fussiness’, as it helped them quickly pin point properties they thought would be of interest. We also spent a great deal of time on Right Move, Zoopla and Purple Bricks.
Properties now chosen, we arranged to view nine properties in one day. BIG mistake... HUGE! By the time we had got to the fourth viewing we had forgotten about the first, and by the end of the day could not remember what we’d seen and what we hadn’t. We couldn’t even remember what we liked. Lesson learned: if you have too much to take in, the act of remembering and selecting becomes all that bit more difficult. Everything is a bit of a blur: half remembered bits and pieces of each property. I would strongly advise to book no more than four appointments per day. This gives you the time to really look at each property and to reflect on what you saw and felt afterwards.
Over the next few weeks, we viewed around twenty different properties, and eventually found one we liked! It was an older style property on the outskirts of town and, whilst not ticking all the boxes, it did tick the main ones. It was significantly cheaper than others we had seen, and although there was no parking, there was nearby street parking. We knew we would have to compromise, and this seemed okay as compromises go. A garage would have been nice, but not having it wasn’t the end of the world.
Making an offer they can’t refuse
After a second viewing (something I would strongly recommend) we agreed to put in an offer. Feeling empowered as first-time buyers, we negotiated a deal with the estate agents and managed to knock £7000 off the asking price. Flushed with success, we got rather carried away - even thinking about furniture options and paint samples!
You can find out how we got on with this property (spoiler alert it did not go as planned!) and some advice on choosing a mortgage lender and a chartered surveyor in next week’s blog.
Posted in: Buying & Selling Your Home