CONVEYANCING

First Time Buyers FAQs

A first time buyer is deemed to be someone that has no dependent sale of their own, AND has NEVER owned residential property previously (UK or abroad). They must also be buying the residential property in question with a view to living in it themselves.

If there are two buyers and BOTH are first time buyers then the transaction is deemed eligible for first time buyer concessions (eg Stamp Duty allowances).

To be eligible for first time buyer status BOTH purchasers must qualify as first time buyers.

The most common benefit available to first time buyers is Stamp Duty concessions.

Stamp Duty relief is available to first time buyers. First time buyers will be exempt from Stamp Duty Land Tax (SDLT) up to value of £300k, and will pay at 5% on values from £300k to £500k.

Mortgages are not concessions as of law (eg SDLT), but more financial products aimed by banks and building societies at the first time buyer’s market. These will often include various incentives such as preferential interest rates, free surveys, and even higher loan to value (LTV) percentages.

When you apply for your mortgage the (lengthy) forms will include a declaration of truth. So, banks know you are a first time buyer because you tell them you are!

As with all purchases, a first time buyer will be expected to pay a 10% deposit on exchange of contracts. A first time buyer will, by definition, be the ‘bottom of the chain’. They will have to find the whole 10% in cash to pay on exchange of contracts. Other’s further up the chain can reply on the deposit being paid to them to cover (in part perhaps) their own ongoing deposit. As such, deposits can go up the chain with (in part at least) cash not changing hands.

This will differ from lender to lender and you should check your eligibility before committing to buy your first property so that you know what you can afford.

You can apply for a mortgage directly with the lender, or via a mortgage broker. Increasingly, the mortgage application is becoming a paperless online process.

A mortgage broker is like a financial advisor that specialises in mortgages.

Check out our key stages section of our site! The 6 key stages before exchange of contracts and then completion are:-

All solicitors will need to formally engage you as client’s, ID you, and have you agree to their terms and conditions before the legal process starts. At Qlaw, we refer to this initial process as onboarding. It is now done electronically through our amazing client APP!

The contract pack is the first part of the legal process of any conveyance. The contract pack is produced by the seller and their solicitor. It includes the actual (draft) contract for sale, plus various forms that the seller must complete called the ‘sellers property information forms’. As a first time buyer you will generally have to wait 1-3 weeks to receive these from the seller’s solicitor (via your own appointed solicitor). View our ‘Contract Packs’ section for more information.

Once your solicitor has received the contract pack, the next stage is usually to obtain searches. These will be the same whether you are a first time buyer or have bought and sold many properties before. View our ‘Searches’ section for more information.

A survey is a detailed report prepared by a surveyor about the physical state of the property you intend to buy. This report is what it is, and will be no different because you are a first time buyer.

A survey is a detailed report giving a ‘warts and all’ view on the state of the property you intend to buy. A mortgage valuation is simply a surveyor confirming in writing that the property is worth what you are paying for it. The mortgage valuation is done for the benefit of your lender (not you). The survey is for your benefit.

YOU appoint your surveyor (NOT your solicitor).

First time buyer – do I have to have a mortgage valuation?

If you are taking a mortgage, yes you do! The mortgage valuation is a condition of the mortgage and it is to satisfy your lender that the property is worth what you are paying for it. Horrible as it sounds, this is so that they can repossess the property if needs be (if you default on repayments) to recover their losses).

A mortgage is simply a loan that is ‘secured’ (legally attached) to your property. It allows your lender to sell your property if you default on mortgage repayments to recover the money they lent you.

Subject to the terms of your mortgage, if you fail to keep up repayments on it, you will generally thereby allow your lender to repossess the property to sell it and recover the money they lent to you (and any related losses they incur such as legal costs).

Conveyancing enquiries are the formal process whereby the buyers solicitor formally raises questions in writing with the seller’s solicitor (and the seller via their solicitor) about all aspects of the sale. The enquiries might be anything from something simple like is the washing mean staying, through to complex legal queries that the solicitors will iron out on your behalf.

The reason for enquiries is that the legal concept of ‘buyer beware’ applies to house buying. All enquiries must be complete before you exchange contracts. The reason is that once you have exchanged contracts, you are legally bound to complete the purchase whether you want to or not!

Exchange of contracts is the point at which buyer and seller become legally obliged to then ‘complete’ (ie move).

You will need to pay a 10% deposit on exchange of contracts.

You must insure your new home from exchange of contracts onwards!

Completion is the big day when you move into your new home!

Completion day is set at exchange of contracts.

You collect the keys from the selling estate agent. The keys will be released as soon as the seller’s solicitor has received your purchase money from your own solicitor.

There are two types of joint ownership of land in England & Wales. If you are buying jointly you should think very carefully about what type of joint ownership you choose. You will buy either as (1) joint tenants or (2) tenants in common. You can read more about these types of joint ownership in our dedicated guide.

A property chain is a series of linked transactions within which each sale and purchase is ‘dependent’ upon the sale below and above them. By definition, if you are a first time buyer you will be at the bottom of any chain (ie there will be no one buying your property as you don’t have one to sell)!

Yes, its OK to borrow money from parents. Your lender may want to know that this is happening as part of the mortgage application process. You should NEVER knowingly give false information in a mortgage application!

You can pull out of your proposed purchase right up to (before) exchange of contracts.

If you pull out of the purchase after exchange of contracts then you will be in breach of contract and be liable to be sued! As part of that you will almost certainly lose the deposit you paid to the seller.

If you want to know more about being a first time buyer and you haven’t been able to find the answer in these FAQs or any of our guides and posts, do please reach out – our expert conveyancing solicitors are here to help!

First Time Buyers

Buying your first home is an exciting time. But, the conveyancing process in England and Wales is less than perfect. So, if you’re a first time buyer, check our content on the conveyancing process, and those things that will impact you directly. Knowledge is power!

From what the estate agent does, to what surveyors do, through to your mortgage company and of course your conveyancing solicitor – it’s all here! We have covered off every aspect of the conveyancing process including: contract packs; searches; enquiries; mortgages; surveys; exchange of contracts; and of course the big day itself – COMPLETION!

It isn’t just you and your solicitor in the process either. Choose the right solicitor, the right lender, and the right surveyor. And, doing that (choosing the right professional help) starts with understanding what it is they each do in the process.

We hope you find the content on first time buyers helpful, but if you have any questions left – do reach out. Our team of expert conveyancing solicitors would love to hear from you.

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