Buying a property can be a brain-boggling process. Once you’ve found the sweet spot where your desires and your budget overlap, there’s the process to contend with – one that begins before you’ve even set foot in a property. And there are myths aplenty, which can make things a whole lot murkier. Getting clear on what’s really important can go a long way, which is why we’ve gathered up-to-date advice from two Rightmove experts on everything from whether location is still king to why a survey is a smart idea.
1 A mortgage in principle is a waste of time
False: While the answer to whether you need a mortgage in principle before finding a home is, no, it’s definitely better to understand what you can borrow in advance.
Rightmove mortgage expert Matt Smith says: “The downside of not having it means that you might not be in a great or strong position. You may find out that you actually can’t get the property you want from an affordability or credit perspective.”
Unlike a mortgage offer from a lender, a mortgage in principle is not binding, but it does show both the agent and seller that you’re a serious buyer – as well as giving you a clear picture of what you can afford. In this way, you’ll avoid the disappointment of finding the home of your dreams and realising it’s out of your price range. “It basically says that for that individual lender, you’ve passed their criteria, you’ve passed a credit check, and they’ve assessed your affordability, based on the information you have supplied,” Smith says.
Some estate agents may check whether you have a mortgage in principle before arranging a viewing, especially in fast-moving markets or in-demand areas. Rightmove offers a mortgage in principle powered by Nationwide and the application can be carried out in under 20 minutes.
2 You need a 20% deposit
False: The deposit is a common stumbling block for first-time buyers. These days a 20% deposit can be close to or more than a year’s salary – a seriously daunting sum. While 20% has historically been a good rule of thumb for a deposit, the industry has changed a lot to accommodate buyers who don’t have significant savings, or equity in an existing property.
Smith says: “There is a thriving market of lenders who are looking for business in that 5% deposit range.”
But if you’re in the fortunate position where a 20% deposit isn’t a stretch, Smith reckons it could be a smart move, depending on your circumstances.
“A 20% deposit results in a strong loan-to-value ratio, meaning it will open your choice of mortgage lenders and rates, reducing your monthly costs,” he says.
3 A home survey is a luxury
False: When you’ve fallen in love with a property, getting it surveyed might seem like an expense you can skip. However, Smith says getting a private home survey “is not a requirement, but it’s a good idea to give you peace of mind”. “While the survey report on the property might be overwhelming to read, it’s reassuring to have a skilled person looking out for key things that you might miss.”
Those things could include damp, structural faults, or the need to replace a roof. Not only is it sensible to be forewarned of the problems you could be inheriting from previous owners, knowing them can give you the chance to negotiate on the price or avoid a costly mistake.
4 It’s cheaper to go with a new build
It depends: There are a lot of advantages to new homes – fresh decor, up-to-date design and modern tech. These can save you money, as Bannister notes: “New homes are often much more energy-efficient than older homes, which can help to reduce outgoings on energy bills.” However, it does come with a premium. “You will often pay more for the home in the first place, in comparison to an older home, so it’s worth doing the maths to make sure it is the right decision for you.”
Another attraction with a new build is the potential of a green mortgage, where some lenders offer a lower interest rate for energy-efficient homes. These tend to be offered where properties have an energy performance certificate (EPC) rating of A to B or A to C, depending on the lender.
5 It isn’t a good time to buy a home in this financial climate
False: “While challenges remain, and mortgage rates are still elevated compared to the pre-pandemic years, conditions do seem to be better for the market,” Bannister says.
That said, you shouldn’t expect interest rates to drop significantly any time soon. “If you’re going to delay with the hope that rates will go back to the post-financial crisis (2008/2009) rates of 1% or 1.5%, that simply isn’t the case for the foreseeable future,” says Bannister.
He is, however, keen to emphasise that there is no perfect moment to buy a home: “Anyone looking to buy should consider their own circumstances and whether now is the right time for them.”
6 Location isn’t that important
False: The saying that gives Kirsty and Phil’s property show its name remains accurate. “Location is key,” confirms Tim Bannister, Rightmove property expert. “You can change a lot about a home but you can’t change its location. Explore the area you’re thinking of moving to. Speak with friends, family, your estate agent and any friendly locals. And, of course, research it online.”
7 You can start looking for your next home without putting your own on the market
It depends: While you can start looking without committing your own property to the market, be wary that if you do find your dream home, you may be up against it in terms of convincing the seller to accept your offer. Bannister says: “Both in the seller’s mind and the agent’s, your offer isn’t ‘proceedable’ as there is no evidence that you are actually able to pay the amount you have offered.”
It’s possible that having a conversation with the agent and working quickly on your end to get your property on the market could encourage the seller to consider your offer – but you may well be competing with other buyers who are ready to move forward. In cases where a seller is trying to move quickly, buyers who have their funding lined up are often more desirable – so it’s definitely worth bearing this in mind.
In the ideal scenario, you would already have an offer on the property you’re selling (or at least close to getting one) before you place an offer on a new one. Bannister says: “Managing the timing is an art, and circumstances are different for every buyer and seller, so have the conversation with the agent, be clear on what your circumstances are and maintain communication – you never know what might happen.”
With the UK’s largest choice of homes and helpful affordability tools, find out how Rightmove can help you make your move.
Your home may be repossessed if you do not keep up repayments on a mortgage secured against it. The information and opinions provided in this article are not intended to be financial advice and should not be relied upon when making financial decisions. Please seek advice from a regulated mortgage adviser.
Rightmove Group Limited (RMG), Firm Reference No. 491645, is an Appointed Representative of Rightmove Financial Services Limited (RMFS), which is authorised and regulated by the Financial Conduct Authority, Firm Reference No. 805415. This can be checked on the FCA register at www.fca.org.uk/register