Buying your own home is undoubtedly one of life’s most exciting milestones, and yet research ranks homebuying and moving as some of the most stressful times of our lives. Debbie Clark identifies the biggest stressors faced by homebuyers, and how careful planning, professional guidance, and a clear understanding of what to expect, can help you to mitigate these factors as you navigate the homebuying process.
L&G surveyed 2,000 UK homeowners to shed light on the nation’s homebuying habits and the financial and emotional pressures of getting on the property ladder. It found that both moving house (48%) and buying a home (35%) are considered more stressful than a divorce or romantic breakup (33%). So, what is causing homebuyers all this stress and, more importantly, what can you do to avoid it?
Unexpected Costs
Shockingly, only 29% of homebuyers surveyed were aware of all of the costs included in buying a new home, with the average homebuyer spending £1,836 on unexpected costs. The most underestimated costs included legal and property fees (38%), surveying costs (29%), utilities (23%) and Stamp Duty (22%). The research found that younger buyers were particularly unprepared, with just 12% of young millennials (25-34) feeling prepared, versus 45% of those aged 55+.
The best advice we can give you here is to do your research thoroughly – including drawing on the experience of friends and family – and budget accordingly. Don’t underestimate how quickly costs, including removals and getting your first home set up, can add up, and build in a buffer so you can relax knowing that you are prepared for the unexpected.
Mortgage Confusion
L&G’s survey found that many homebuyers were confused by mortgage types and terms. A total of 39% of 25 to 34-year-olds struggled with equity-related terms, while 38% were confused by the concept of an “Agreement in Principle”. In fact, just 28% of homebuyers overall claimed to have understood all the terms clearly.
It is perhaps surprising then to learn that only 41% of buyers utilised the skills of a mortgage adviser or broker when buying their home. The use of a mortgage adviser peaked among older millennials and, in this instance, it is definitely worth listening to the voice of experience; brokers really are worth their weight in gold.
Not only will they help you to find the best mortgage rates, they will also explain the differences between fixed, capped, tracker, discounted and SVR rate mortgages and help you to identify which best suits your individual circumstances.
Exchanging Contracts
In L&G’s research, the wait to exchange contracts was (at 31%) identified as the number one most difficult aspect of homebuying. The reality is that there are all sorts of obstacles that can pop up during the conveyancing process. It is important to have a shared agreement of your ideal timeframe, but do be realistic and prepared to adjust this if necessary.
There will, unfortunately, be things you have little or no control over, so be positive about those you do. Firstly, choose your solicitor wisely – go with a recommendation over a cheap deal every time! Then, when the sale has been agreed, find out from the estate agent or developer who will be progressing the sale. Communicate with them regularly, and always remain polite.
Throughout the process, aim to be proactive, not reactive – ask what is needed from you and deliver it promptly. If you don’t understand something, ask; remember you are paying for the service – there is no such thing as a silly question. Finally, ensure that your finances are in order. Check (and double check!) the date your mortgage offer expires and ensure you can access, and transfer, your full deposit as soon as your solicitor needs it.
Financial Planning
The good news is that nearly two-thirds (63%) of survey respondents felt positive about their financial planning when buying their first home, but the financial decisions don’t stop there. It is imperative that you protect your investment. Consider what that looks like for you and, again, seek independent advice. While most buyers took out buildings and contents insurance, just 38% took out life insurance, 20% opted for income protection and only 18% bought critical illness cover. Understandably, extra outgoings feel like the last thing you need at an already expensive time but, should the worst happen, it pays to be prepared.
HOMES AVAILABLE on the market
Hackney Wick – Wickside
From £119,375*
Wickside is a new seven-acre neighbourhood currently under development in Hackney Wick by Southern Housing New Homes. The first homes to launch are within Bridge House; 25 contemporary one, two and three bedroom Shared Ownership apartments overlooking the canal and a new public square, with a strong focus on modern living, sustainability and connection to the surrounding landscape. Deposits start from just £5,969.
shnewhomes.co.uk/properties/wickside
0330 162 0616
*Based on a 25% share of the full market value of £477,500
PLUMSTEAD – Rockcliffe Square
From £85,625*
Located in a vibrant south east London district and designed with modern living in mind, homes at Rockcliffe Square include Manhattan studios, one, two, and three bedroom apartments. All properties feature fully integrated appliances, private outdoor spaces and access to a resident-only landscaped communal podium courtyard. Perfect for commuters, residents can enjoy a short walk to three stations – Woolwich, Woolwich Arsenal and Plumstead – placing Canary Wharf seven minutes away and Liverpool Street just 14 minutes away.
lqhomes.com/rockcliffesquare
020 8189 0426
*Based on a 25% share of the full market value of £342,500
LAMBETH – SO Resi at Oval Village
From £47,000*
SO Resi is offering 46 stylish studio, one and two bedroom apartments, available with Shared Ownership, as part of the wider Oval Village regeneration, transforming brownfield land into a new residential neighbourhood. Situated adjacent to the historic Oval Cricket Ground, residents benefit from peaceful parks and gardens, as well as the cultural buzz of the South Bank just a short stroll away. With three stations within a 10-minute walk, the development, on the site of a former gasworks, is also exceedingly well connected.
soresi.co.uk/find-a-property/oval-village
020 8607 0550
*Based on a 10% share of the full market value of £470,000
CAMBRIDGE – L&Q at Darwin Green
From £95,000*
L&Q is offering two and three bedroom homes at this impressive new development which, once complete, will include open green spaces, a central park, two new schools, retail units, a community centre, library, health centre and sports facilities. Homes are complete with a fully inclusive specification, meaning premium appliances, fittings and fixtures are all included as standard. All properties benefit from a private outdoor space, bike storage and allocated parking. To encourage car-free travel, a network of leafy footpaths and cycle routes will also be established throughout the development.
lqhomes.com/darwingreen
0333 999 8387
*Based on a 25% share of the full market value of £380,000
First Time Buyer is an exciting bi-monthly glossy which takes a stylish and comprehensive look at all the options available, setting them out in an entertaining and informative way, and helping potential customers navigate their way through what is often a daunting and complex process. We dispel the myths, reinforce the facts and arm the reader with the tools necessary to make their homeownership dreams a reality.
