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Common mistakes first-time buyers make

2nd March 2018

Assuming you can afford to buy in the first place

You only have to search online and you will find numerous articles about the enormous deposit first-time buyers require to get started on the housing market. You might have used an online calculator or even ventured into a High Street Banks for an idea of how much you can afford. Perhaps the figures you got back didn’t look promising.

However, that’s not always the case. If you were to walk along the High Street from one financial institution to another, you would find that each one has different affordability criteria so if you don’t speak to an independent adviser, you might be assuming you can’t afford when you actually can.

Many people will often turn to online mortgage calculators to determine what they can afford, but these tools are not always accurate.

Christine Ward-Foxton, Mortgage Adviser at Gale and Phillipson Mortgage Advice Centre says, “From my experience in working with first-time buyers, I would have to say that the biggest misconception people have is about how much they can or can’t afford. Sometimes, they have given up on looking in a certain area because they don’t think they can afford it or they have almost given up hope of buying a property altogether.”

Being a first-time buyer usually means trying to save for a deposit and often people don’t believe that they will ever be able to afford a property.

But luckily, there are options out there. “The Government launched the ‘Help to Buy’ scheme as a leg-up for buyers who can only gather a small deposit and recent government statistics have revealed that the Help to Buy ISA scheme is helping first-time buyers to get on the property ladder three years earlier than they otherwise would. If you save money into a Help to Buy: ISA, the Government will boost your savings by 25%. So, for every £200 you save, you receive a government bonus of £50, with a maximum bonus of £3,000 to those buying a home. In addition, the Government launched the Lifetime ISA in April 2017 which has an annual limit of £4,000 and allows money transferred from another savings account.”

“If you’re saving for a home through a Help to Buy ISA or know someone who is, it’s worth being aware that any savings in a Help to Buy ISA which are transferred to the new Lifetime ISA before 5th April 2018 will benefit from a top up of 25%. This could boost your savings by an additional £1,100. But anyone hoping to take advantage of this opportunity needs to ideally take action before the 1st March.

And while it’s natural to feel like there’s no point in saving if you’ve got no chance of buying a property any time soon, Christine otherwise. “Saving just a little bit of money each month is the first step to take. Although it may not seem like much to begin with, eventually this will equate to a sizeable chunk of money and, before you know it, you will have your deposit.”

Read our help to buy ISA guide here

Read our lifetime ISA guide here

Not carrying out enough research

Although you may feel like you’ve done a lot of reading up on what kind of mortgage you might be able to afford, you might also need to research the type of property you’re really interested in. What is your dream house? Have you considered what your make or break criteria are in buying your new home? Is it more important to have a 2 bedroom house in a popular area or a 3 bedroom house in a less popular area? Is it more important to have a garage or a garden? “Having a checklist to understand where you are prepared to compromise if you need to can be really useful” suggests Christine.

Not checking your credit score

“Before you apply for a mortgage, it’s always sensible to request a copy of your credit report. If you’re over 18 and have ever taken out credit, a credit reference agency is likely to hold a credit report on you. They use it, along with information on your application, to decide whether to offer you credit – usually by calculating a credit score for your application”, explains Christine. “Unfortunately, missed or late payments on a credit card, loan or phone bill could negatively affect your credit score – and the bank or building society may use this as a reason to reject your request for a loan.”

But by reviewing your credit score in advance, you can identify any potential problems in advance and potentially take steps to improve your score. Simple things like registering to vote or cancelling unused credit cards can improve your chances of getting the mortgage you want.

Read our tips on how to improve your credit rating here.

Not negotiating

Many first time buyers admit to not having any idea about how the process of buying a house actually works and who does what in the process. “Often people come to see me who have found their ‘dream home’ and we’ve worked out that they can afford it but they don’t know how to put an offer in. Most first-time buyers feel nervous or uncomfortable negotiating on a price for their dream property. Because of this, they may end up paying more than they need to for the property- which they will come to regret further down the line. Putting an offer on a house requires some negotiation and people are often unprepared on the basics of negotiating the offer. Spending a bit of time understanding how estate agents work, demand in the area and how much houses are selling for, and also thinking about your approach with the offer can pay off hugely”, admits Christine.


“The best lessons one could learn and never forget are those that have been learned in pain”. Most people have probably grasped that buying a home is usually a significant investment, but most first-time buyers learn the hard way how they have underestimated both the costs associated with buying a home and the length of time the separate stages take, especially when dealing with numerous parties in the process, i.e. mortgage advisers, lenders, solicitors, estate agents.

While saving for a deposit and securing a mortgage is one of the most important steps towards owning your own home, many first-time buyers forget to consider the additional costs that can incur once you have bought a property. Additional costs such as valuation fees, building insurance fee, cost of planning searches and solicitor fees are further things to consider in your calculations.

When it comes to buying a home, every experience is unique. For some first-time buyers, the process will run very smoothly and take only a couple of months. For others, unexpected circumstances will arise and slow things down – meaning that the process could take several months or more. However, being aware of common things that can go wrong or that can take extra time at the outset can help in generating more realistic expectations.

For more information read our first-time buyer guide here.

Being a first-time buyer can be very exciting. However, it can also be very confusing, particularly as you can be unsure when you need an estate agent, when to get in contact with a solicitor and when to make an offer. Take a look at our 12-step infographic on how to buy a new home.

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Gale and Phillipson Investment Services Ltd, Gale and Phillipson Advisory Services Ltd, Gale and Phillipson General Financial Services Ltd and Gale and Phillipson (SE London) Ltd are all authorised and regulated by the Financial Conduct Authority (Reference Numbers 431387, 142752, 195080, 195522).  Gale and Phillipson (Herts) Ltd and Gale and Phillipson Consulting Ltd are appointed representatives of Gale and Phillipson Advisory Services Ltd.  Gale and Phillipson (Surrey) Ltd is an appointed representative of Gale and Phillipson Investment Services Ltd. (Reference Numbers 615821, 811525, 703337). All companies trade under the name Gale and Phillipson and are registered in England and Wales numbers 05409822, 02232959, 03751076, 04077157, 08864945 and 04823391.  Registered office for all companies is Gallowfields House, Fairfield Way, Richmond, DL10 4TB.

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