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Government issues guidelines on how to buy a home

The government has issued a comprehensive guide on How to buy a home. The guide focuses on freehold properties and will be particularly useful to first time buyers.

It takes you through the various stages of the process, beginning with how to work out how much you can afford. It also looks at the various schemes available for people just starting out on the property ladder, such as Help to Buy ISAs.

There is also some useful advice on preparing to apply for a mortgage, including how to check your credit score before approaching a bank or building society.

Many people, even those who have bought properties in the past, may not be aware that they have to provide proof of identity as part of the anti-money laundering regulations.

The guide says: “Estate agents, lawyers and mortgage lenders are required by law to check your identity to prevent money laundering and fraud.

“At several stages during the transaction you will have to produce documents to prove your identity or address and information on your source of funds. This could include receipts from the sale of another property, savings, inheritance monies and financial gifts from family and friends.

“Checking this information is a legal requirement to help safeguard your transaction; failing to provide ID documents could slow down the process.”

The guide also offers advice on choosing a home, applying for a mortgage and the differences between buying an older property and one that is newly built or still at the planning stage.

Many people choose to sell their home as they get older and move into specialist retirement properties. The guide says that while this may have many advantages, buyers should be aware that such properties are likely to be sold as leasehold rather than freehold, meaning you may have to pay ground rent, service charges and event fees, or be subject to restricted sales clauses.

It says: “You should do your research carefully and make sure you and your legal representative check the small print in detail to understand current and future costs.”

The guide stresses that buying a property will probably be the largest purchase you will ever make in your lifetime, so it is crucial to get all the right information and the right kind of expert help, particularly from a solicitor.

It says: “Once your offer has been accepted, you need to select a legal representative. They play a key role in helping you purchase your home – they carry out the appropriate legal checks on the property, complete the legal work for your property purchase and, if you are getting a mortgage, ensure that it meets your lender’s requirements.

“They will identify any title or planning issues; advise you on which searches to have carried out and do the legal work of transferring the ownership of the property from the seller to you.

“You should instruct a legal representative as soon as your offer has been accepted, but if you have any special requirements (for example if you only want a home which you can run a business from), you might want to instruct a legal representative to check this for you before you put your offer in.”

The full guide is available at https://www.gov.uk/government/publications/how-to-buy-a-home/how-to-buy