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Posted on 24 January 2022

How do I buy a property in the UK?

How do I buy a house in the UK? There are two ways in which you can buy a property, you either pay one bulk payment of cash or you can acquire a mortgage. Wondering what a mortgage is and how to get one? We have you covered…

How do I buy a house in the UK?

There are two ways to buy a property:

Cash or by getting a mortgage

If you’re in the lucky position to have cash, then you can skip this paragraph.

However, be aware that estate agents will ask to see proof of your finances when you come to make an offer on a property. If you’re a first-time buyer then it’s very likely you’ll need a mortgage. This means that you borrow a lump sum of cash to purchase your home and pay it off in monthly instalments – a bit like a phone contract.

Value of your mortgage

The value of your mortgage, which has a direct impact on your house buying budget, will depend on things like your income, whether you’re buying jointly with someone else, the size of any cash deposit you have saved, and whether you’re using a ‘help to buy’ scheme. This is one of those times in the home buying journey when there’s no substitute for professional advice. You may be able to afford more than you think.

People who can help with your mortgage

There are a few ways to find out the size of the mortgage you can get. It’s a good idea to try a few as different banks and lenders offer different rates.

Your first stop should be a mortgage advisor at your bank. It’s very easy to call or pop into your local branch to make an appointment with someone who has access to your banking information. They’ll be able to tell you the mortgage your bank can offer you. The second way to get a mortgage is through a mortgage broker. This is someone who has access to a range of different banks. This means you’ll be able to find out the value and interest rates of mortgages from multiple lenders. You can find a mortgage broker online or your local estate agent will be able to point you in the right direction. Often, estate agents have an in-house mortgage broker.

Once you’ve found a mortgage deal that feels right for you, your broker or advisor will give you something called an Agreement in Principle (AIP). This is a letter to confirm the amount that they are willing to lend you. They’ll either post or email this to you. Now that you have your finances in place, you’re ready to buy a house in the UK.

Top tip

If you’re asked if you’d like an AIP (agreement in principle), please be aware that this involves running a check against your credit score. Each time your credit is checked this can negatively impact its value. So only ask for an agreement in principle once you’ve found your ideal lender.

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