Buying a property like a house is a long-term financial investment and commitment. Most often, buyers take mortgages to support their purchase decision. Based on the financial position of individuals, various schemes and options are available to avail of a mortgage.

To be approved for a mortgage, you must make an upfront payment known as a deposit. This is adjusted against the value of your property. The higher your deposit amount, the lesser you have to borrow; hence, your monthly payments would be lesser.

How to determine the deposit required for a mortgage?

The deposit amount is determined based on the cost of the property. The lender will assess your deposit based on how much you are eligible to borrow. Most often, 10% of the property value is required as a deposit. In some instances, it can be reduced to 5%.

It is better to opt for a higher deposit if that is possible for you –

– It reduces the Loan to Value, meaning you borrow less, and your monthly payments would be lower.
– It speaks as credibility for you with the mortgage lender and can help to get better deals and low-interest rates.

If you are a first-time buyer, you will have to front 15% of the property cost as the deposit. If your deposit is higher, the interest rate and monthly payment amount would be lower.

Does the deposit amount vary for certain categories?

If your record has bad credit, some lenders may ask for a bigger deposit. But there are some lenders who are willing to overlook bad credit scores and lend money with conditions. They consider certain exceptions and tailor-make mortgage schemes to help those whose financial history may be complicated.

If you are self-employed, that’s a cause of concern for moneylenders as they feel they may not be able to verify your income. They would ask for higher deposit amounts.

A greater deposit of at least 25% may be required if you are purchasing a second home. And you may be required to pay a higher rate of interest. The mortgage process is the same but with stricter criteria, and you would have to prove that you could afford both mortgages.

Is a no-deposit mortgage available?

Currently, the market does not support a no-deposit mortgage scheme. There may be a few specialist lenders who offer them sometimes. But you would have to show a spotless credit history. And the market would have to be very strong and stable for lenders to be confident in taking this step.

You could try for a guarantor mortgage if you can’t pay the deposit. Someone else has to make your payments legally, and his or her home would be secured for your mortgage. They would have to pay outstanding costs if the bank takes possession of your house and sells it.

The government has a Help to Buy scheme wherein first-time buyers can avail of a 5% deposit-only option. In addition, the government gives an equity loan to help you get started on the property ladder.

Searching for and narrowing down your ideal house can be a tedious process. The element of huge investment aside, the space is meant to be your safe haven and calm at the end of the day. Investing in a property is a huge long-term commitment, and there are many aspects to consider from all angles so that you get the best property and the best value for money.

When buying a property, the following affects the decision of a potential buyer –

– Personal budget, relevant especially for first-time buyers who are leaving rentals to own property
– Practicality, in terms of proximity to transport links like metro stations and other public transport, schools etc
– Size of the property
– Outdoor spaces, garage/parking facilities
– Council tax bands
– Interior décor may not be as important as the above because it can be changed or altered as per taste

But the most important and underlying factor is location.

How and why is location a decisive factor when buying a property?

As per the survey, 85% of participants responded that the location of a property is the most important and crucial factor in decision-making. It is also the one element repeatedly emphasised by real estate agents.

Location may be based on the kind of property you are looking for. Apartment seekers may want options that are closer to the city centre. And those looking for family homes would prefer the outskirts so that there’s more space at the same price when compared to city-limit options.

Location probably has the most significant weightage among the elements to consider because it is one aspect that cannot be changed about a property. It also affects all the other aspects like job opportunities, commute options, property value and, most important of all, your quality of life.

What makes a great location?

If you are interested in a certain property, chances are there may be others who find it interesting too. Although it depends on individual preferences and personal requirements, there are many location-based factors that impact lifestyle and property value.

Convenient and easy access to local markets and supermarkets, pharmacies, basic health facilities, retail shops etc. Most buyers consider if all or most of these are within walking distance or not.

Any location becomes more viable for buyers if there is convenient access to public transport options. Easy commute to office and work locations is the most important of it all.

With increased emphasis on health and mental well-being, most homeowners now place greater emphasis on proximity and access to green spaces.

When you consider a location, you should look at the benefits you would get as a resident. Also, look at the up-and-coming areas which have prominent urban regeneration projects. While these improve the quality of life of current residents, they also prompt property price escalation in future.

Although the housing market may be evolving constantly, the process of buying and owning a property does not undergo as many changes. It is a significant financial investment, and it is best to understand the process in detail before taking the leap.

It can take a minimum of three months to complete the whole process of owning a property. This includes the time from viewing houses and working with real estate agents and solicitors to mortgage valuations and conveyance.

Steps for buying property in the UK

The process may seem tedious and long; however, you can smooth it out a bit if you are aware of the steps involved and prepared for them.

1. Understand the costs

These are the different costs involved when you buy a property –

– Deposit
– Mortgage payments
– Stamp duty payment
– Solicitor fees
– Home Insurance

The government has a mortgage scheme that supports prospective buyers with a 5% deposit. So if you have this in hand, you could consult a mortgage advisor and AIP (Mortgage Agreement in Principle). An AIP gives you credibility as a buyer and shows that you are serious about your purchase. It also helps to speed up and give a smoother process down the line.

2. Conduct house search

There are multiple avenues for checking your options –

– Online websites where you can refine your search options based on house prices, school areas, train stations etc.
– Real estate agents like Glentree Estates are sometimes more aware of listings even before they appear online. Registering with one or two agents may be helpful in getting ahead of the curve. Also, they may be able to guide you better with their insights and important factors about a neighbourhood.
– House actions may have lower prices. Despite its appeal, the flip side is that there may be risks which you may not be able to understand without a proper survey of the house.

3. House viewings



Here are a few pointers and questions to consider while viewing houses –

– How much have similar properties in the neighbourhood been sold for?
– Are the electrical and water lines working well?
– How is the light and air circulation at different times of the day?
– Why is it being sold now?
– What is the history – how many owners, any accidents or incidents previously?

4. Make an offer

   Through your estate agent, inform the owner of your offer. You could offer lower than the asking price, but it means you should be prepared for a good haggle.

5. Mortgage valuation

   Mortgage applications may go on for six weeks or more. You need bank statements dating six months, employment proof and ID proof. The property will go through a mortgage valuation too.

6. Property survey



Hire a licensed building surveyor to conduct a property survey. It helps to identify issues that can impact the value of the property or any repair work related to rot or electrical wiring.

7. Involve a conveyance

   The conveyancer will handle the legal aspect of the property purchase and ensure that all the legal documents are in order. This involves handling land registry, planning permissions, stamp duty payment and checking contracts. The first step, however, is a memorandum of sale drawn up by the real estate agent, to be signed by the conveyancers of buyer and seller.

   Real estate agents such as Glentree can handle the legal aspects of property purchases so that you can concentrate on buying the house of your dreams.

8. Arrange home insurance

You could either take the help of online sites that offer advice on the best home insurance options or turn to an insurance broker or provider to get the best deal. It is best to have it in place from purchase completion. In fact, most mortgage lenders may ask about insurance before releasing funds.

9. Signing the contract

   By this stage, the legal representatives of the buyer and seller would have ensured that both parties were in agreement about the contract to be signed. A move-in date would be in place too, and you would have to give the deposit to your conveyancer.

   Once the contract has been signed and the deposit has been made, the house is legally yours. The deed will be transferred in your name, and you will receive the house keys.

   You can now plan and move in!

   You can contact us at Glentree Estates if you have any questions regarding the steps involved in purchasing property in the United Kingdom.