Don't be scared of buying a home
The property market is filled with terms, phrases and acronyms that can be convoluted, confusing and even downright scary – particularly for those who have never encountered them.
And it’s easy to see why as conversations with mortgage lenders, estate agents and solicitors become littered with terms such as ‘APRC’, ‘fixed rate’, ‘vendor’, ‘freehold’ and ‘gazumping’.
The mortgage process alone has been found to be “terrifying” for some first time buyers, according to the results of a recent survey, which also revealed 57% of Britons entering the market thought the process of getting a mortgage was too hard .*
Equally, for those at the other end of the property ladder – looking to move into a retirement scheme – the process can be just as worrisome with leaseholds, shared ownership and service charges added to the mix.
But there is no need for first time or retirement buyers to be scared of the market.
Edward Norman, partner at Roger Coupe estate agents in Cranleigh, said:
“Fears about buying property stem from the unknown and for first time buyers the whole process is new, so it’s understandable that much of the terminology – and figures involved – can cause concern.
“None of it is as scary as it seems, however, and one of the easiest ways to allay any fears is to understand the journey you’re about to take. Reading a guide to buying a house, such as the one produced by the Money Advice Service, will introduce you to each step of the process, as well as the terms you’re about to come across.”
Edward, who has more than 20 years’ experience in the property market, also recommends choosing the right agent to help you through the buying minefield.
“Experience is an asset money can’t buy but will help you immeasurably when navigating the market, especially if problems crop up that need time and expertise to solve – such as access rights, or leasehold renewals.
“The same goes when buying in the retirement market. Having someone who is a specialist in this sector – as Roger Coupe is – can guide you through this unique process with confidence.”
Know your property ABCs
APRC (Annual Percentage Rate of Change) – the total cost of a mortgage including all costs, interest charges and arrangement fees, shown as a percentage rate
Agreement in principal – the document showing
a bank, building society or lender is prepared to give a named person a
mortgage, subject to property approval
Completion date – the day when all legal work is completed, monies transferred, documents sent and keys released to buyer
Conveyancing – the process of moving the legal ownership of property from one person to another
Exchange (of contracts) – when signed contracts are exchanged between the buyer’s and seller’s solicitors. This is when the sale becomes legally binding
Freehold – the property is owned by the buyer outright, including the land it stands on
Gazumping – when a seller accepts a higher offer on their property, despite having already agreed to a lower one
Leasehold – the property is owned by the buyer for the length of a lease, typically 99 or 125 years, but not the land or building.
Stamp duty – the land tax imposed by the government when you buy a property priced at £125,000 or over. The amount goes up/down depending on the purchase price of the property