Buying a house
Who is this page for?
Buying a new home but don’t know where to start? Don’t worry, we’ve got you covered. Our step by step guide will take you through everything you need to know about the home buying process.
For first time buyers, we have more detailed information on the process of buying your first home in our help and guidance section.
Finding your new home
The first step towards buying a new home is finding the perfect property for you. Your reasons for buying a new home could be very different to your neighbours'.
You could be relocating for a new job or need more space to start a family. Or if those children have flown the nest, then you might be looking to downsize your home.
When deciding what type of home to buy, first think about what’s most important to you. Next, create a list of the key features you’d like your new house to have.
These could include:
- Number of bedrooms
- Type of outside space
- Access to public transport
- Size of the kitchen
- How much work you’d be prepared to do to the house
Apply for a mortgage Agreement in Principle
Before you start looking for a house or flat, it’s a good idea to get a mortgage Agreement in Principle from a lender.
A mortgage Agreement in Principle lets your estate agent know you’re serious about buying and offers a chance to see how much you might be able to borrow for a mortgage.
Making an offer
Once you’ve found the ideal property, you can make an offer. Your offer can be above or below the asking price set by the seller. Depending on how popular the property is, there may be other buyers making an offer.
If there’s more than one offer, the seller may ask you to give your ‘best and final’ offer. This should be the last offer you’ll make at the highest price you’re willing to pay. The seller then decides which offer to accept.
Making an offer in Scotland
In Scotland, your solicitor will note your interest with the seller. Once all the interested buyers have noted their interest, the seller will set a date for offers.
When making an offer in Scotland, as well as the price you want to pay, you’ll also have to provide a date you want to move in, items you want to buy from the seller and any conditions you may have.
Arranging a solicitor and surveyor
Once your offer has been accepted, a solicitor handles all the legal work around buying the house. This usually goes on behind the scenes and includes contacting the local council to find any issues that might affect the property’s value.
A valuation survey will be carried out as part of the mortgage application to check it’s worth the price you’ve agreed. There are other surveys you can commission at this point:
- RICS condition report – Suitable for new-build and conventional homes. Provides ‘traffic light’ ratings for different parts of the building.
- RICS homebuyer report – A more thorough survey that includes a valuation of the property.
- Building or structural – Identifies every element of the house, defects, urgency and cost of repair. The cost of this survey varies – generally the more detailed surveys are the most expensive.
Porting your existing mortgage
Porting your mortgage simply means moving your mortgage deal from your current house to the one you’re buying.
When you port your mortgage, you’ll be re-applying for the same or similar mortgage deal. If you’re buying a more expensive house and need a larger mortgage, it may not be possible to port your mortgage.
Stamp Duty and moving house
If this is the second time you’re buying a house, you’ll need to pay Stamp Duty. How much you’ll end up paying depends on the value of the house you’re buying.
Until 30th June 2021, if you are moving house in England and Northern Ireland, you will not have to pay Stamp Duty on the first £500,000 of a property's purchase price. This then reduces to £250,000 from the 1st of July until the 30th of September 2021.
If your purchase isn't complete on or before these dates, you'll need to pay Stamp Duty at the usual rate, where it applies. Find out more about the changes to Stamp Duty.
What’s a property chain and how does it work?
Simply put, a property chain is when the purchase of your house is linked to a seller who’s also in the process of buying a house.
The person buying your home might not be able to complete until they’ve sold their home. Likewise, the person who is selling you their home might not be able to sell until they’ve bought a new home.
Property chains with lots of buyers and sellers can be complicated. When you’re in a chain, the purchase of your house can rely on the sale of the houses either side of your property in the chain.
How property chains can break down
During each stage of the buying process, there’s the potential for a sale to fall through, which can affect the rest of the houses in the chain.
On average, it can take 50 days to sell a house. When you’re part of a chain, it can stretch to six months on average. Complications can arise if surveys reveal structural problems or one party simply changes their mind and decides not to move.
The more houses in the chain, the more complex it can get. If the person at the front of the chain fails to get finance or pulls out of the purchase, it can mean all the other deals along the chain have to wait for a new buyer.
When a property chain collapses, you may lose any fees paid for solicitors, surveys and mortgage agreements. If this happens, contact your solicitor to find out what to do and what you may have to pay.
How to avoid a property chain
Buying and selling houses at the same time can be unavoidable when you’re looking to move. You may be able to avoid a property chain by:
Moving home: things to remember
Once you’ve had an offer accepted, the next important stage is the exchange of contracts.
After contracts have been exchanged, you and the seller are legally obligated to transfer ownership of the property. This is an exciting step, as you should now have a moving date.
When getting ready to move, there are a few things to remember:
- Post – Update your address at your job, bank, council, GP and any bills. You may want to use the Royal Mail redirection service too.
- Utility suppliers – Take a final meter reading and tell your gas, water and electricity suppliers at least 48 hours before you move.
- TV and internet – Update your new address to move your TV and internet to your new address (or cancel if they’re not available in your new area).
- Insurance – Buildings and contents insurance might be transferrable to your new home, or it may need cancelling and a new policy taking out.
For more information on what you need when moving, read our moving home checklist.
Calculators & tools
We have a range of mortgage calculators to help you:
- Find out how much you could borrow from Lloyds Bank
- See how much you could save if you make overpayments on your mortgage
- Get an idea how a change to the Bank of England Base Rate could effect your monthly payments
Important legal information
Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065. Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278.
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