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Home
Planning
Your journey to home ownership

Your journey to home ownership

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10 steps towards buying your first home

Work out your budget
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First of all, you should consider how much money you can put down as a deposit to be able work out the mortgage you'll require. Most mortgage lenders will look for a deposit of around 10% of the purchase price. In 2010, the average deposit was £28,770 [Source: NatCen]. You may have to pay stamp duty, which is a tax that is payable to properties above a certain value, although first-time buyers are exempt from this until 24 March 2012 if the purchase price for the home is £250,000 or less.

Having worked out your budget, you can start shopping around for a competitive mortgage deal. You can search for mortgages online, or speak to lenders over the phone or at a local branch. Once you've found the mortgage you want, it's a good idea to get a certificate from the lender stating that your mortgage has been agreed 'in principle'. Generally, this is not a binding offer to lend, but it will give you an indication that you could borrow the amount you need. These certificates can also be useful to have when you speak to estate agents.

Remember to factor into your budget the other ongoing costs of owning a property, such as utility bills, council tax and home insurance. You can use our Budget Calculator to help you look at your income and outgoings. Our How Much Can I Borrow? Calculator can give you an indication of the amount we may be able to lend and our HSBC Mortgage Finder lets you search and compare the mortgages we have available.

Your home may be repossessed if you do not keep up repayments on your mortgage.
- Useful links:
- Budget Calculator
- How Much Can I Borrow? Calculator
- HSBC Mortgage Finder
Research the area you want to live in

As well as researching local shops and amenities, schools and transport…

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As well as researching local shops and amenities, schools and transport links, you might also want to consider aspects such as green spaces nearby, council tax affordability and whether there are any planning developments in the pipeline. Find out what the availability of properties is like and shortlist the ones you can realistically afford.

Have a look at our Resources page to find out how you can get information on an area, such as local crime rates, council tax bands and schools.
- Useful links:
- Resources
Find a property

Begin your property hunt by registering with reputable local estate…

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Begin your property hunt by registering with reputable local estate agents and by visiting property-finding websites and newspaper property sections. See as many properties as you can to get an idea of what you like, dimensions and how prices compare. Go to viewings with a list of key questions and don't be afraid to request a second viewing if you are unsure. When you see lots of properties, it can be hard to remember what you thought of them, so you may want to compile a checklist of your requirements and jot down notes as you go along.

Go to our Resources page for a list of accredited property websites and a directory of estate agents.
- Useful links:
- Resources
Make an offer

When you have found the right property for you, make…

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When you have found the right property for you, make an offer through the estate agent. Make sure that it is 'subject to contract', meaning you can pull out if there are any problems. The agent is legally obliged to pass on all offers to the seller, and should let you know if yours has been accepted or rejected.

In England and Wales, the acceptance of an offer is not legally binding, meaning either party could still back out or the seller could accept a higher offer from someone else later on – this is sometimes known as ‘gazumping’. To help avoid this, you can ask for the property to be taken off the market once your offer has been accepted.

In Scotland, an offer states the amount you are prepared to pay and the date you wish to move in. If the offer is accepted, it is a legally binding contract.

Read more about making an offer and successful bidding in our Expert tips on property hunting article.
- Useful links:
- Expert tips on property hunting article
Instruct a legal expert

Once your offer is accepted, you'll need a solicitor or licensed…

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Once your offer is accepted, you'll need a solicitor or licensed conveyancer to handle the conveyancing. Conveyancing is the legal process of transferring a property from one owner to another. The seller will send a contract to your solicitor including information such as the price of the property and its boundaries; it will also state the proposed date of completion of the purchase. Your solicitor or conveyancer will check the contract, all associated legal documents including the lease if there is one, and find out about the property's history through planning and title searches. They'll also contact the local authority to ask about any planned roadworks or new developments that might affect the property. Legal fees can vary and are normally dependent on the purchase price of the property you are buying.
Apply for a mortgage

If you're using a mortgage to buy your property, you'll…

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If you're using a mortgage to buy your property, you'll need a formal mortgage offer from your lender before you sign the contract. To apply for a mortgage, you'll need to complete and submit an application. You'll usually have to provide proof of ID and address for each person applying, evidence of your income and copies of your bank statements as well as details of the property you are looking to buy.

Once your application has been approved, you'll need to pay any booking and valuation fees to your lender. They will send a Mortgage Offer Document to you and your solicitor. Once you have signed and returned this, the lender is committed to lending you the money subject to the terms and conditions stated in the offer documents, such as a satisfactory property valuation. It is a legal requirement that you have valid buildings insurance in place by exchange of contracts in case something happens to the property before you move in. You may also want to consider taking out life assurance to ensure any outstanding amount on the home loan would be paid off if you were to die.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Visit our Resources page, which
provides further information on applying
for a mortgage.
- Useful links:
- Resources
Get a survey

Before making you a formal mortgage offer, your lender will do…

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Before making you a formal mortgage offer, your lender will do a valuation to make sure the property is worth the agreed price and is suitable to lend against. But you may want to get a more comprehensive survey done too. This will make sure the building is sound and help to avoid nasty surprises later on. There are three levels of survey:
- Basic valuation: this is carried out on behalf of the mortgage lender. Fees are dependent on the purchase price of the property and range from £125 upwards.
- Homebuyer report: this is intended to provide an overview on the general condition of the property. Generally, a surface examination of the parts of the property that are visible and readily accessible is carried out, and services are inspected but not tested. Homebuyer reports tend to be carried out on properties less than 90 years old.
- Full structural survey: this is also known as a building survey and is a more detailed report on the property. It is carried out by a surveyor rather than a valuer. They tend to be carried out on properties more than 90 years old, listed buildings or buildings that have any unusual constructions. If the surveyor does not discover any major defects, they would be liable and you may be able to claim compensation.
If the survey reveals any problems, you may want to get a builder or other expert to assess what repairs would cost, and use this as a basis for negotiating a lower price with the seller.

Find out about HSBC survey fees. Our Resources page can direct you to a list of chartered surveyors.
- Useful links:
- HSBC survey fees
- Resources
Exchange contracts

When the buyer and seller are happy with the contract…

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When the buyer and seller are happy with the contract, they both sign copies of it and send them to each other through their solicitor or conveyancer. This is known as the 'exchange of contracts'. At this point, the sale becomes legally binding and, usually, neither party can pull out without paying compensation. This is also the moment when the buyer pays the seller the agreed deposit – usually around 10% of the purchase price. The deposit is usually transferred by CHAPS payment to your solicitor, which means they will receive it on the same day. You solicitor then forwards it to the seller's solicitor. The money is non-refundable if you back out of the sale. You are now responsible for the property, so make sure you have buildings insurance in place from the date of exchange.
Complete the purchase

On completion day, your solicitor or conveyancer pays the rest…

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On completion day, your solicitor or conveyancer pays the rest of the money from your lender to the seller. They will also sort out payment of stamp duty (for which you'll have to sign a form), their solicitor's fee and any other outstanding charges. Once all this is done, you'll get the legal documents that prove your ownership of the property and you can collect the keys to your new home. Congratulations – you are now a homeowner.
Move in

To keep costs down, some first-time buyers handle the…

Show more

Your home may be repossessed if you do not keep up repayments on your mortgage.

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Common questions

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Resources

Sources of further information when buying a home

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Planning your children's future

Giving them a great start in life

Need financial advice?

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Everyone's circumstances are different and what applies to one person may not be right for someone else. The suggestions above are based on a general assumption of each planning event and they are not intended to provide advice or recommendation on your individual financial needs.

* Lines are open 8am to 6pm, Monday to Friday (excluding public holidays).
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Planning

Your journey to home ownership

10 steps towards buying your first home

Work out your budget

Research the area you want to live in

Find a property

Make an offer

Instruct a legal expert

Apply for a mortgage

Get a survey

Exchange contracts

Complete the purchase

Move in

You may also be interested in...

Expert tips on property hunting

Common questions

Resources

Planning your children's future

Need financial advice?

Need to talk to us?

Start a live web chat

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