+ 10 Lessons of a First-Time Buyer

For the past five months, my boyfriend and I have been in an emotional whirlwind of failing to buy one property and (in the end successfully) purchasing another. While we had both said we wanted to buy a place together in the near future, it was my drunken clicking of the “arrange a viewing” button for a place we both loved that sped up the process slightly! Long story short, the flat we tried to buy between March-June ended up being a no-go, so I wanted to share my learnings with other first-time buyers, specifically in the bubble that is the London property market.

1) Be Head Over Heart, Not Head Over Heels

When Ned and I viewed the first flat of our dreams, where we saw warning signs we instead saw ‘quirkiness’ and ‘character’. It was only after a supremely negative mortgage valuation and a super-expensive but thorough homebuyers’ report that our cute coal vault/bedroom became quite obviously a barely legal spare storage cupboard.

We had so wanted to believe that all the little doubts in our minds were just first-time buyer nerves, but now we realize we should have thought with our heads and not our hearts. Ideally, walk around with the surveyor at the time of the homebuyers’ report. This really helped to bring the report to life for us. I’d recommend choosing Gerry Brown (gb[at]consultantsurveyor.co.uk). He’s pricey but we trust him 100%!

2) It’s Not Over Until the Fat Lady Sings

Our estate agent emailed us saying “I am just waiting for [the seller] to confirm the date for completion. When it is, I will email both solicitors and let them know that’s the agreed completion date.” This all sounded fabulous, but we didn’t 100% realize what was around the corner.

The day of exchange/completion came upon us, and ONLY THEN did we find out that our solicitor’s queries had been ignored and instead a proposal was put forward for an “indemnity policy”… roll on lesson #3!

3) Be Wary of Indemnity Policies

The flat we wanted to buy had works done to it that were never signed off by building control. This essentially made the second ‘bedroom’ invalid and brought with it the risk of the local council asking us, as the new owners, to be financially liable for either completely re-doing it and (even worse) stopping us from making any further improvements to that part of the flat. For example, even trying to apply to the council to make the room legal would have INVALIDATED our mortgage. This means we were effectively buying a 1-bedroom flat for a 2-bed price. Also, most policies only protect your mortgage lender and not you so be very careful when agreeing to one!

4) Don’t Hand Your Rental Notice in UNTIL Completion

At the end of May, we had no reason to suspect that the flat purchase would hit an obstacle. Yes, the seller’s solicitors were taking a frigging age to answer the pressing issues my solicitor had raised, but we thought was standard practice. We tried to create a buffer of over 3 weeks between us completing and the confirmed end of our rental contract.

This would have been great if we had completed the flat purchase. But instead, the estate agents had already found a replacement couple for our flat and so we effectively were due to be homeless. If you learn one thing from our mistakes, just cough up the extra rent and don’t make yourself homeless!

5) Consider Getting a ‘Mortgage Agreement in Principle’

Before we had even placed an offer, we got an “Decision in Principle” arranged over the phone for us with London & Country Mortgages. What’s great about them is they offer free, impartial advice and can serve as a broker with (seemingly anyway) your best interests in mind.

Yes, the estate agent will still ask to speak to you and go through details to substantiate your offer, but having this agreement a) helps clarify what your best offer can be and b) should put you  in a stronger position if you’re up against another buyer with no financial details ready to share.

6) Sign up for a 30-day free trial with Experian

I had no idea how many addresses were attached to my name until I had a free trial with Experian. It was also really useful to trawl through Money Saving Expert’s website for tips on how to boost your credit rating.

7) Instant Property Alerts Are Your Best Friend

A London property can be under offer in just a couple of days, so you really need to have your wits about you when searching for prospective homes. Some estate agents deliberately withhold their listings from Zoopla and Right Move, so it’s best to also sign up to the dominant agents in your area as well as the big search sites.

Other good sources of new properties are Tepilo (quality over quantity!), Prime Location and On The Market.

8) Know your LTV Ratio

A mere 1-5% difference in your loan-to-value ratio can open up vastly different interest rates from the big lenders. If you have any spare cash at your disposal (e.g. selling shares, waiting for a few more paychecks until you buy to fatten your deposit) my advice is to put as much as possible into the mortgage. Obviously, you’ll need to ensure you have money left over to actually maintain your beautiful new home, but it’s worth checking with the lender how even an extra £1000 deposit could change your mortgage terms.

9) Keep Your Mouth Shut

During one viewing, I was very open with the seller about our situation “oh yeah, we pulled out of our other property” and “we’re just in the process of sorting out a different mortgage now based on a different deposit”…. in hindsight, you should really be selective in terms of what you say to the seller as it can completely change their opinion of you. If in doubt, pipe down!

10) Be Cautious of Requests for Cold Hard Cash

We had placed an offer on a different property via Hampton’s in London, and as this sale was in a chain of 4/5 other properties, they told us in no uncertain terms that we’d need to be willing to put down a £5000 payment ASAP. This was without any guarantees of getting it back should something happen outside of our control, and zero paperwork to sign. In the end, not immediately pandering to their requests cost us the flat as another couple were willing to cough up, but I’m glad we were cautious and didn’t sign away a big chunk of our deposit without any guarantees.