Getting on the property ladder for the first time is an ambition for millions who want to own their home.

The trouble is, buying a property is a complex and arduous task, especially in the current financial climate with a recession and increasing borrowing costs. 

As a result, first-time buyers are getting older; the average age in England now stands at 34, according to the latest English Housing Survey. However, falling house prices and a calmer property market are set to shake things up – perhaps in the favour of buyers.

Here, Which? details 10 crucial steps you’ll need to take in order to make your first property purchase in 2023. 

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1. Work out what size deposit you’ll need

The cost of living crisis is tightening budgets, making it harder to save up for that crucial deposit, but decreasing house prices mean the required sum may be easier to reach.

You’ll usually need to aim for a deposit of at least 5% of the property price; that means you’ll need a 95% mortgage. For example, if you wanted to buy a house worth £200,000, you would put down £10,000 of your own money and borrow the remaining £190,000.

If you can afford it, having a bigger deposit means you’ll be offered a mortgage with a lower interest rate – seeing as mortgage rates rocketed towards the end of 2022, there are substantial benefits to paying as little interest as possible.

You can use our deposit calculator below to discover how long it might take you to save enough to buy your first home:

2. Factor in the extra costs 

Remember to budget for the additional costs of buying a property, such as conveyancing fees and surveys, as well as the cost of things like a removals company . These can add up, so make sure you factor them into your budget. 

In addition, first-time buyers purchasing a property costing more than £425,000 will be required to pay stamp duty.

3. Give your deposit savings a 25% boost

Any chance to top up your savings is not to be sniffed at; lifetime Isas allow first-time buyers to benefit from a 25% government bonus on their savings.

If you’re under 40, you can earn up to £1,000 in each tax year that you save up to £4,000 of your own money.

You have to have had the lifetime Isa for at least a year before buying your first home, and the property must be worth £450,000 or less.

However, be warned that if you withdraw your savings for any reason other than buying a home (or in retirement once you’ve reached 60 years old), the 25% bonus will be removed, along with 6.25% of your own cash.

    4. Find out how much you can borrow

    If you have a deposit and budget in hand, it’s time to gauge how much you’ll be able to borrow.

    The size of a mortgage loan is usually calculated at a maximum of around four and a half times your annual salary. If you’re buying a home with someone else, both your salaries will be taken into account. So, if you earn £40,000 a year between you, you might be able to borrow around £180,000.

    As well as your income, potential lenders will also look at the size of your planned deposit, your credit score and monthly outgoings.

    Use our mortgage borrowing calculator to get an idea of your borrowing power.

    5. Look into first-time buyer schemes and other mortgage options

    There are options out there to help buyers get on the ladder. The government’s First Homes scheme allows first-time buyers in England to get a 30% discount when buying a new-build home. 

    The maximum amount First Homes can be sold for is £250,000, or £420,000 in Greater London. To qualify for the discount, you’ll need to take out a mortgage of at least 50% of the purchase price of the property.

    Help to Buy equity loans may have ended, but if you’re a prospective first-time buyer who opened a Help to Buy Isa before they closed to new savers in November 2019, you will still be eligible for a bonus from the government up until 2030. You could potentially earn a tax-free boost of up to £3,000 when you save £12,000.

    Joint mortgages, shared ownership, sole proprietor deals and guarantor mortgages, where a family member uses their savings or property as collateral for your loan, are other options to explore.

    6. Get a mortgage agreement in principle

    It’s tempting to jump in straightaway and start looking at properties, but there are benefits to getting a mortgage agreement lined up beforehand.

    An ‘agreement in principle’ (AIP) clarifies your budget for house-hunting, and proves that you’re a serious buyer.

    The AIP, which usually requires a ‘soft’ credit search, is essentially a statement from a lender detailing how much they’d be willing to let you borrow. It is not a guarantee, but it is a key step in helping buy your first home.

      7. Search for your first home 

      With an AIP in place, now is the time to delve into the world of property searching. 

      Registering with estate agencies could mean you’ll see properties before they are listed online.  

      Make sure to view properties in person in order to get the best possible understanding of their potential. Do your research into the local property market and the area you’re interested in. You can also check out our comprehensive house viewing checklist to ensure you know what to look for.

      For more detailed advice on this part of the process, check out our full guide on how to buy a house

      8. Make an offer 

      Once you’ve found a property you want to buy, you’ll be in a position to make an offer.

      House prices are forecast to fall in 2023, with experts predicting drops of anywhere between 2% and 15%. The shift in the market is positive news for first-time buyers, who have struggled to keep up with years of price increases.  

      Last year ended with the majority of sellers having to settle for less than their asking price, so don’t assume a lower offer won’t be accepted.

        9. Apply for your mortgage

        After you’ve had your offer accepted, you can return to your mortgage lender to formally apply for your home loan.

        You’ll need to decide which type of mortgage you want, whether that’s a fixed-rate deal, a tracker mortgage, a standard variable rate mortgage or other mortgage type.

        Mortgage rates are set to remain high during 2023, so make sure you keep up to date with the cheapest deals.

        10. Play the waiting game and get ready to exchange

        Once your offer has been accepted, a conveyancer will need to sort out the legal aspects of the move, and commission a house survey to ensure there are no significant issues with the property.

        The process can take several months, especially if the seller is in a property chain.

        When the pieces of the jigsaw all fit, your conveyancer will work with the seller’s solicitor to set a date to exchange contracts and complete the purchase.

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