3 Things to Expect as a First-Time Buyer

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3 Things to Expect as a First-Time Buyer

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3 Things to Expect as a First-Time Buyer

3 Things to Expect as a First-Time Buyer

Buying your first home is a major achievement but is one of the most significant investments you are likely to make. It can be a very overwhelming time, so you should consider the following:

Stamp Duty Land Tax (SDLT)

As a first-time buyer, you can claim SDLT relief in England: this means you do not need to pay any SDLT if the property you buy costs £425,000.00 or less. If you are purchasing with someone else, then to claim this relief, both of you must be first-time buyers (i.e. have not owned any property or had a share/interest in a property anywhere in the world).

The situation is slightly different in Wales, as they do not offer any relief. However, no Land Transaction Tax is payable if the property costs £225,000.00 or less.

Arranging Finances

If your savings are spread across different investment schemes or savings accounts, check with the provider whether they require any notice to draw down the funds. In addition, if you are using a Help to Buy ISA or Lifetime ISA, ensure that you continue to comply with the criteria/regulations and do not withdraw any funds from the account, as this will jeopardize the bonus.

As part of standard source of funds/wealth checks, you will need to provide your Solicitor with evidence that the funds are available and how they were raised. The more prepared you are, the quicker your Solicitor can perform the source of funds and wealth checks.

Prepare for Additional Fees

When buying a property, there are more fees than just your deposit. These include stamp duty land tax, legal fees, mortgage broker fees and searches. However, the following third-party fees are also applicable:

  • Mortgage Fees

    An arrangement fee is often included under your offer and is paid to your lender for setting up your mortgage product. There may also be a valuation fee payable to the bank to have the property valued to satisfy the lender that they can lend money for this property.

  • Survey Fee

    Although the lender will conduct a valuation, it is mainly for their lending purposes and is likely to be a desktop valuation. It is strongly recommended to have a structural survey carried out to get a clearer understanding of the property's condition. Different levels of surveys/investigations are available, depending on how in-depth you want the property to be checked.

  • Land Registry Fees 

    Once the transaction has completed, an application is made to the HM Land Registry to register you as the owner. A fee is payable for doing this, and the amount depends on the purchase price.

  • Leasehold Fees

    Management companies often expect service charges to be paid in advance and may require a Notice to be sent to them with your details. They will charge a fee for this. Each management company sets their own costs, and this information only becomes available during the conveyancing process. Ground rent may also be applicable, particularly in older properties.