3 in 10 Brits are actively avoiding the property ladder!
In June 2021, Money.co.uk did a survey asking people what their main concerns were to buying their first home or moving up the property ladder.
Having enough earnings or deposit were unsurprisingly top of the list.
What was a surprise to many was ‘faff’ and ‘hassle’ were more commonly cited than interest rates or too many outgoings!
These reasons are why it is estimated that up to 3 in 10 Brits are actively avoiding the property ladder.
Looking back on previous property transactions, I can say on behalf of nearly everyone who has bought property, that buying and selling property is most definitely both a faff and a hassle – but one that is ultimately worthwhile for most.
Why is it like that and what can you do to minimise the faff?
Well first, let’s look at what makes a property transaction so complex.
Buying a property involves quite a few stages that all have to happen at the right time. Those stages involve various parties who have tasks to complete before you can move on to getting the keys and moving in. Let’s look at those stages: –
- Making a decision to buy. This is the biggest financial commitment you are likely to make and not one to be taken lightly. Once committed to buying, you will need to begin to get a deposit together and a mortgage agreed in principle at least. You may well need to visit a lender or a professional mortgage broker. They will try to avoid jargon but it cannot be avoided. Be prepared to be asked a lot of questions and to present a fair bit of documentation such as bank statements and payslips. Don’t be afraid to ask questions yourself though. You can read our handy first time buyer guide that breaks some of that jargon down!
- Finding a property. Once you have an idea of how much you can borrow and how much deposit you can add to that, you can get an idea of what your maximum purchase price is. Now you can start looking at properties. Most will begin by looking at property websites like Rightmove, Zoopla, and On The Market. When you have selected a few properties to view you will need to contact the estate agents for those properties. They act on behalf of the people selling the property (sometimes called vendors) and although they want a nice smooth transaction they are not really there to act in your best interests. Estate agents will have their own jargon too so if you don’t understand what they are saying ask them to explain themselves again. It should be noted that using a good Estate Agent can make all the difference in terms of getting a deal through quickly and easily. It sounds tempting to do on your own, but we have always found a good Estate Agent helps.
- Secure your dream home. Once you have found the property you think you will be happy in, for a price you can afford, you negotiate the price with the estate agent. This can be very stressful. The best advice for many is to offer a little below the asking price but if rejected start increasing your offer with genuine reasons why it shouldn’t go much higher. All the while you should have a maximum ‘walking away’ price so if it goes above there then you walk away. Even in a market with a shortage of properties for sale other opportunities will appear at some stage.
- Start the legal work – if not done so already. With the property chosen and price agreed, now the work to get the purchase completed and the keys in your hand really begins. You will almost certainly need to engage some solicitors to do the legal work behind the scenes. This is called conveyancing. Properties all have a title deed listed on Land Registry – even flats that also usually have a lease agreement. This title deed (and any lease agreements) must be acceptable to lenders (and you of course). It is the solicitor/conveyancer’s job to check everything and ask questions on your behalf to make sure you don’t have any legal problems in the future.
- Get the mortgage sorted. Hopefully, you had your mortgage pre-approved much earlier. Now you can go back to your broker or lender to finish the application process and get the ‘full mortgage application’ submitted. Again, expect more questions, and be sure to ask anything that is worrying you so you are completely happy with what you are about to be committing to.
- Prepare for ‘exchange’. Things start to happen fairly quickly as everyone in the chain is doing similar things. Your solicitor is asking questions of the other solicitors and the people you are buying from. Your lender is asking a valuer to inspect the property and checking all your documentation before releasing your mortgage ‘offer’. The estate agent is trying to keep everything progressing smoothly and you are trying to keep tabs on all these activities! This is where a good mortgage broker is worth their weight in gold, making sure all parties are doing their jobs for you and bringing everything together like a conductor in an orchestra.
- Exchange of contracts. When everyone is ready, the legal questioning is done and your mortgage offer is released (to both you and your solicitor) the solicitors will look to ‘exchange contracts’. This is just jargon that means your solicitor gives your seller’s solicitor a contract to buy the property and your seller’s solicitor gives your solicitor a contract to sell the property. When all solicitors are happy with the contracts they have received they agree that the properties involved are sold. This is just a legal step – no money has been transferred yet. The solicitors set a date for the transferring of money and everyone relaxes as very little can go wrong at this stage.
- This is one of the last steps – although both a faff and sometimes stressful. On the day set by the solicitors at exchange of contracts, the solicitors receive the mortgage money from the lenders, add any cash deposits and start sending it on to the seller’s solicitors. When the receiving solicitor confirms receipt of the full agreed amount, they call the estate agents and tell them they can release the keys to the new owner, who may well have been sitting in a car waiting for the call to collect the keys with all their worldly possessions in a lorry.
- Move in. If you are one of those waiting with a lorry to unload, collect the keys, and go in by yourself. This moment won’t happen very often in most people’s lifetimes, so enjoy it! This is your new home! But take your time to check everything is as it should be, everything works as it should do, and give yourselves a pat on the back – you have done it!! You own your own home. No more rent. No more landlord. You can decorate it however you want. You can stay there for years.
Congratulations! You are on the property ladder.
It was a faff, it was a hassle – but I suspect that when you look back on it, you will reflect and think it was worth it. We believe so at least and given the sheer number of property owners in the UK, so do most people.
So, if you are aware of the process and you are ready to engage good professionals such as solicitors and valuers, then it needn’t be as bad as you fear. Lean on their experience and professionalism to help you through. A good, professional mortgage broker will be extremely helpful, like Coreco, as we have helped thousands of people along the journey from the very beginning, (finding out how much people can borrow), all the way through to getting the keys and often beyond. We are here to help irrespective of experience.
Get in touch with us for a free and no-obligation chat and start the next stage of your journey! Contact us now or call 020 7220 5110 🙂