Buying a property is an exciting time however it can be stressful too, especially when you are a first-time buyer. The number of factors involved in purchasing your first home can feel overwhelming. This blog post takes you through the process of buying your first home, including saving your deposit and applying for a mortgage.

Saving a Deposit

Generally, you will require a 10% deposit plus a mortgage. The amount you will need to save as a deposit for your first home will depend on several factors, such as:

  • Typical property prices in your area.
  • You and/or your partner’s income. This will determine the amount you can borrow from the bank for your mortgage.
  • Debt and committed outgoings. It is advised that you pay off outstanding debts and reduce committed outgoings. This will not only assist you moving forward with your savings but will also increase the amount available to you on the mortgage.

First-time buyers can benefit from the government Help to Buy schemes which offers a bonus of up to £3000 which will be claimed by your conveyancing solicitor during the property transaction. The Help to Buy schemes have been running since 2013 and have supported close to 117,000 first-time buyer purchasers. For more information on the Help to Buy schemes and how to apply, read our Help to Buy ISA blog post.

Saving for a deposit for your first home can be a lengthy and somewhat daunting process which has resulted in an increase of gifted deposits.  A gifted deposit is any amount that somebody (usually the bank of mum or dad) gives a home buyer towards their deposit or gifts them the entire deposit. More and more people are relying on gifted deposits to get a mortgage. Find out more about the gifted deposit and how a gifted deposit is dealt with during your property transaction by reading our gifted deposits blog post.

You will also need to budget for costs associated with purchasing your property such as legal fees, survey costs, removal costs and the cost for any works required in your new home. First-time buyers will pay no Stamp Duty on the first £300,000 for properties worth up to £500,000 which will save you a considerable amount of money.

Finding a Mortgage

The mortgage market is incredibly competitive, and it can be hard to understand what exactly is on offer. Most first-time buyers will benefit from taking independent advice from a mortgage adviser before buying their first home. The mortgage adviser will analyse your finances and assess the level of mortgage repayments you can afford to work out roughly how much you can borrow. This will identify what you can afford which is recommended before you go house-hunting. The broker can get an AIP (agreement in principle) issued from the proposed lender, which will give the agent and seller of a property you would like to offer on piece of mind.

Whichever mortgage you apply for, your lender will want to know you can continue to make your repayments. The lender will request proof of income and information about your outgoings such as debt, bills and other costs such as travel or childcare.

Property Search

You’ll no doubt have plenty of requirements from your prospective new home. A good start would be to look at properties that have sold in the areas you’re most interested in. This will inform you of what property types, sizes and styles you can afford in the different areas you may be looking in.

If you want to buy a house, it’s likely you’ll buy the freehold, meaning you own the property and land it sits on. If you’re buying a flat, you’ll be buying leasehold, or buying into a share of the freehold. Leasehold ownership of a flat is simply a long tenancy, the right to occupation and use of the flat for a long period. It is possible to extend the lease to the property which is advised as the shorter the lease becomes it depreciates in value. Lenders also have lease length requirements when considering lending money on a property. You can find out more about lease extensions here.

Naturally, new build homes are an attractive option for first-time buyers because of the government Help to Buy schemes available and the convenience of moving into a brand-new property which requires no renovation – something which can be very costly. For further information about new build homes, read our new build home blog post.

Conveyancing Process

The legal process of buying and selling is known as conveyancing. Due to the complexities of conveyancing, it’s important that you choose a solicitor who has considerable experience in this field. Our team of expert conveyancing solicitors have decades of collective experience in this specialist area and are committed to delivering a smooth and stress-free service.

Use our easy flow chart to track the progress of your property purchase.

Preparing to Move

Moving home is statistically one of the most stressful things you can do in life. Making sure you’ve packed everything and like most people having to move it in one day and unpack is hard enough without having to think about all the other things you should be doing. That’s, why we’ve created a handy moving home checklist to make sure moving is that little less stressful.

If you would like to discuss purchasing as a first-time buyer in further detail, please contact the team via our main switchboard number 0121 778 2371 or alternatively email info@lplawfirm.com.

 

 

 

 

 

 

 

Help To BuyIn 2013 the Coalition government led by David Cameron and George Osborne created the Help to Buy schemes. The schemes include Help to Buy: Shared Ownership and Help to Buy: Equity Loan which helps hard-working people like you take steps to buy your own home. The Help to Buy scheme makes it possible to buy a home with just a 5% deposit whilst Help to Buy: Shared Ownership deposits are typically much lower than buying traditionally.

New Build developers in the UK have seen a rise in First-time buyers purchasing homes. Naturally, New Build homes are an attractive option for first-time buyers because of the government Help to Buy schemes available and the convenience of moving into a brand-new property which requires no renovation – something which can be very costly.

The Help to Buy ISA pays first-time buyers a government bonus. For example, save £200 a month and Help to Buy add £50, up to a maximum of £3,000, boosting your ISA savings of £12,000 to £15,000. The Help to Buy equity loan is interest-free for the first 5 years. After this, borrowers are charged a rate of 1.75%, with this rate slowly increasing year-on-year in line with the Retail Price Index (RPI) plus 1%. Interest payments are paid on top of mortgage repayments.

It has been 5 years since the government launched its flagship programme and has supported close to 117,000 first-time buyer purchasers.  With 13,500 loans set to mature in 2018 adopters now need to decide how to pay back the government’s loan.

1 in 7 loans to first-time buyers has been to a purchaser across the South East, with average prices have increased by the equivalent of £67,260. With the exception of London, those in the East of England have seen the average value of their property rise the most. Just 8% of loans have been issued to purchasers in London, however, first-time buyer property prices have increased by over one third since 2013.

No doubt industry bodies will watch with interest to see whether adopters re-mortgage, sell up or pay back their loans from another source.

The popular Government-funded Help to Buy Equity Loan is available until 2021. The scheme was extended through a further £8.6 billion in Government funding.

If you would like to discuss the Help to Buy scheme in further detail, please contact the team via our main switchboard number 0121 778 2371 or alternatively email info@lplawfirm.com.

What is a Leasehold?

Leasehold flats can be in purpose-built blocks, in converted houses or above commercial or retail premises. They will also include maisonettes, which term is, generally, used for flats with their own separate entrances.

Leasehold ownership of a flat is simply a long tenancy, the right to occupation and use of the flat for a long period. This will usually be for 99 or 125 years and the flat can be bought and sold during that term. The term is fixed at the beginning and so decreases in length year by year. If it were not for inflation, the value of the flat would diminish over time until the eventual expiry of the lease, when the flat returns to the landlord (although an assured tenancy would then become a possibility).

The leasehold ownership of a flat usually relates to everything within the four walls of the flat, including floorboards and plaster to walls and ceiling, but does not usually include the external or structural walls. A garden can be included unless it is a communal garden for the building. What the leaseholder owns is often defined in the lease as the Demised Premises. The structure and common parts of the building and the land it stands on are usually owned by the freeholder, also known as the landlord. The freeholder is, normally, responsible for the maintenance and repair of the building. If so, the costs for doing so are recoverable through the service charges and billed to the leaseholders. The landlord can be a person or a company, including a local authority or a housing association.

The Process to Extend Your Lease

As the lease to a property becomes shorter it depreciates in value. Prospective buyers may overlook purchasing your property because the lease it too short. Lenders also require a minimum term on a lease for a prospective buyer to secure a mortgage.

There are two ways you can overcome the short lease problem, and these are set out below.

The Formal Approach

The Leasehold Reform, Housing and Urban Development Act 1993 (“the Act”) provides leaseholders with the right to extend their Lease; subject to certain qualifying criteria being met. A formal valuation will be required which will ascertain the cost to extend that lease. You will need a conveyancing law firm to organise the lease extension and liaise with the Freeholders solicitor. The legal fees are based on the complexity of the lease extension and usually start from £850 plus VAT.

The Informal Approach

If you do not want to go down the formal route you can approach your Freeholder informally to see if they are willing to grant a lease extension. However, please be aware that this may not result in the best deal for you. You also need to be aware of unrealistic ground rents which the Freeholder may require you to enter into as part of the ‘deal’.  The ground rent increases may seem suitable now, but they can be detrimental in the long run making your property unmortgageable or unsaleable in the future.

We have a specialist team with a wealth of experience in this area. We can provide you with more details about the process and a fee estimate without obligation.

Please contact one of our team who will be happy to assist you and make the process as seamless and stress-free as possible.

There is a multitude of benefits to buying a New Build home. Buying into such developments can be opting into a lifestyle rather than just purchasing a home, with fitness suites, shopping amenities and communal spaces becoming common features of new build developments. The developers will do solid research on an area and look at proximity to local schools and transport links.

When buying a New Build home, ensure you research the developer that you are purchasing from and ask to see the developer’s portfolio of work. Whether it is a well-known developer or a private developer, it is essential that they have a proven track record and you can see their work stands the test of time. New Build properties are generally built to the highest specifications using high-quality, new materials, which mean that they are more energy efficient, cheaper to maintain and have the latest safety and security measures in place. A 10-year National House Building Council Warranty (NHBC) comes with most new homes and acts as a guarantee.

Construction of the property you plan to purchase may not have started and you may commit to the purchase based on the viewing of a show home. This is what’s known as buying ‘off-plan’. Buying off-plan also gives buyers the opportunity to choose finishes throughout the property so that it is bespoke to the buyer’s personal taste – from flooring to tiles, to worktops and wardrobes. Investors often buy New Build homes off plan as this allows them to focus on generating capital growth without concerning themselves with maintenance costs. New Build homes are often a preferred choice for tenants who are looking for ease, convenience and the great locations that New Build homes typically offer.

There are Help to Buy schemes offered by the government, all aimed at helping buyers with the cost of securing and maintaining a New Build home. Naturally, New Build homes are an attractive option for first-time buyers because of the government Help to Buy schemes available and the convenience of moving into a brand-new property which requires no renovation – something which can be very costly.

Things initially move quickly in the world of New Build conveyancing. When you decide that you are ready to make an offer on a prospective property, the developer will require a reservation fee before accepting. Often, this is non-returnable. You should also make sure you have an agreement in principle from the mortgage company before committing to paying the reservation fee. Once this fee has been paid you will have a limited amount of time to exchange contracts – usually around 4 weeks. You should, therefore, have researched experienced New Build conveyancers and be prepared to instruct them as soon as the reservation fee has been paid. Developers can be strict when it comes to deadlines for the exchange of contracts, particularly if there is a lot of interest in the property. If these aren’t met, then you are at risk of losing your would-be home and your reservation deposit. The developers’ conveyancers will give your conveyancing lawyers notice of when the property is ready. Completion must then happen within a specified period.

Due to the strict deadlines and complexities of New Build conveyancing, it’s important that you choose a solicitor who has considerable experience in this field. Our team of expert conveyancing solicitors have decades of collective experience in this specialist area and are committed to delivering a smooth and stress-free service.


If you would like to discuss New Build conveyancing in further detail, call us on 0121 778 2371 to speak with a member of the team. Further, advice can also be found on our dedicated new build conveyancing team page.

What is a declaration of trust?

A declaration of trust is a document that confirms the proportions in which two or more individuals own a property.

If two or more people are purchasing a property together they may want to purchase as tenants in common. This declaration of trust for tenants in common records each person’s contribution and therefore the proportions of the property they own.

Unlike joint tenancy, tenants in common can specify their distinct share in the property. This document sets out the respective beneficial interest of each tenant in common based on their contributions to the deposit, mortgage and ongoing maintenance.

Creating this declaration of trust when purchasing is important when the property is sold as it ensures that each homeowner gets a fair portion of what they put into the property.

Why do I need a declaration of trust?

You need a declaration of trust when you are buying property as tenants in common with one or more people and you want to carve out distinct shares. Upon the sale of the property, you will receive back the same percentage of the proceeds as you put in of the distinct share. It is also possible to leave your distinct share to someone in your will, which is not possible to do if you are joint tenants.

When to use

Use this declaration of trust

  • If you are buying a property as tenants in common with one or more people and all parties wish to confirm how their contributions to the following are to be made:
  • purchase price;
  • mortgage payments; and
  • maintenance of the property

What it covers

This declaration of trust enables homeowners

  • To have a legal document which confirms the actual proportions in which owners own their homes
  • To confirm the actual amounts originally spent by each party in terms of a percentage amount
  • To confirm the proportions to be repaid to each homeowner when the property is sold
  • To specify the parties’ contributions for the payment of the mortgage and maintenance obligations
  • To prevent arguments as to who gave what at the beginning and who should get what when a property comes to be sold

The declaration of trust is a purely personal agreement and the obligations you have to your lender mortgage company will always remain joint and several, whatever you state in this deed. It will always remain a fact that if one of you fails to pay the mortgage, the other is/others are wholly responsible.

How many parties can enter into declaration of trust?

Any number of parties can enter into a declaration of trust.

What steps do you need to take before entering into this agreement?

Work out very carefully the proportions in which you and the other trustees will own the property and remember to include the costs of the purchase in your calculations, because they will reflect the proportions that will be used to distribute the sale proceeds when the property is sold.

How can you terminate this declaration of trust?

You can terminate this agreement by giving four months written notice to each of the other owners.

Further advice

Ask a lawyer

  • If you are joint tenants (which means when you die, your co-owner(s) automatically inherit your property and you cannot leave it by your will). It is possible to sever the tenancy and then complete a declaration of trust. If you are doing this and your shares are not equal, you will need advice from a lawyer
  • For further advice, if you are buying a house unequally and you have children between you.

If you would like to discuss the above further, please contact The Law Practice UK Ltd today.