The pitfalls to avoid when buying a house

I am gearing up to become a first-time buyer. By autumn, my fiancé and I hope to be sleeping under our very own roof after a decade of renting. We’ve been saving hard and, thanks to a little help from our parents, we now have a good deposit and know we’d be at least £200 better off each month with a mortgage before insurance and fees.

We thought getting the deposit together was going to be the hardest part of buying a house but it turns out the whole process is hugely complicated.

And it doesn't seem to matter whether you're buying your first home, upsizing or downsizing, the way we purchase property in England and Wales is slow and frustrating (the legal process is different in Scotland and Northern Ireland).

Normally, when we make big purchases such as a computer or a sofa, we know exactly what we're buying. You go into a shop, view the product, check the price and head over to the till. But when we make the biggest purchase of our lives, we rarely know exactly what we're going to get for our money. We don't even know how long it's going to take to buy it.

Get help finding the best mortgage for you

Timely process

Huddersfield-based estate agent Emma Oxley says the time between putting in an offer on a house and exchanging contracts currently takes six to eight weeks on average, while fellow agent Chris Hope says it's more like 10 to 12 weeks in Swansea.

"The process is taking considerably longer than it was this time last year for buyers and sellers," says Hope, senior partner at Dawsons estate agent. "And it's largely because the Financial Services Authority (FSA) has come down hard on banks and building societies in a bid to reduce mortgage fraud."

It used to be that lenders were happy for the buyer to appoint the legal professional of their choice to do all the buyer's and the lender's conveyancing - the process that deals with the transfer of property ownership.

But because mortgage fraud is often perpetrated by fiddling details such as the buyer's income to secure a bigger mortgage (minor mortgage fraud), or by criminals setting up fake conveyancing firms and disappearing as soon as they receive mortgage funds from the lenders (major mortgage fraud), banks and building societies are restricting how many conveyancers can act for them by setting up panels of preferred partners.

Lenders say this is good for consumers as it adds an extra layer of quality control and reassurance. But in reality it seems to delay the sale process because conveyancers are having to adhere to stricter rules and rising demands.

"Conveyancers know they can't sign off a mortgage offer without checking it inside out now or they'll have to pay compensation to the mortgage providers," explains Hope. "None of the lenders have got their acts together to properly deal with the deluge of work that has to be done as a result of this," adds buying agent and property expert Henry Pryor.

Out of date process

It seems the way we buy property in England and Wales is out of date. Mark McLaren, principal advocate for consumer rights at Which?, says: "The process is difficult to understand. It would benefit from some standardisation."

There are moves afoot to achieve this. For example, The Law Society is consulting on the protocols behind property transactions, such as a property's fixtures and fittings list.

"It could be a move to create a more national set of protocols and establish national conveyancing rules. Consumers wouldn't directly notice the improvement upfront but it would help," says McLaren.

"Until there is a degree of certainty that a sale will go ahead earlier in the process, buyers and sellers will continue to pull out of sales. It's a mad system!"

Speeding things up

So, what can you do to make sure your property purchase runs smoothly? First, as soon as you start thinking about buying you need to sort out your finances. "Sellers are looking for buyers who can help them sell quickly," says Hope.

"We encourage all our buyers to speak to an independent financial adviser so they fully understand the legal and financial processes involved in buying a house and get their mortgage in place."

Instead of falling in love with a house, making an offer on it and then trying to arrange your finances, you will put yourself in a far stronger position if you get your finances in place first.

"Preparing for a mortgage starts early so make sure your documentation is in order," says Andrew Montlake, director of London-based mortgage and financial advice group Coreco.

"Lenders like to see your last three years' address history (no gaps), your last three months'payslips and bank statements, your last P60 and full details of any loans or credit cards. Providing this information on day one speeds up the process no end."

Once you’ve got your finances in order, you should aim to get a mortgage agreement in principle (AIP). Securing it in principle before you start looking for a property will likely speed up the buying process by proving to your estate agent and the seller your creditworthiness and that you are a serious buyer.

It confirms in writing how much a lender will be prepared to loan you, subject to it checking information such as valuations and surveys. Only then will you know exactly how much you can spend on a house.

Montlake suggests getting AIPs from no more than two lenders as too many credit checks can damage your credit rating. He also points out that some lenders move slower than others, especially if they have the best rates and have attracted lots of new customers.

Timings should be taken into account when deciding which lender to proceed with. Taking a slightly higher rate to meet your moving-in timeframe could make all the difference in securing your dream home, he says.

And if your lender allows you to instruct your own conveyancer, start looking for someone to act for you as soon as you are ready to put in an offer on a house. Your estate agent should be able to recommend a local firm.

Montlake suggests asking two or three for quotes on how much they will charge based on your offer price. For a list of Conveyancing Quality Scheme accredited firms, visit

Your Comments

You don't mention the part that lenders are making toward the delays. We were buying a second home, using the existing mortgage on our house, raising the mortgage from 24% to 50%. The interest rate and terms of the mortgage were agreed, then the well known building society/bank took almost 3 months to provide the loan. We nearly lost the purchase. We had already been with that building society for the previous 9 years. With this treatment to an existing customer, what chance has a new buyer got?
I think they have made redundant the capable staff and now the rest don't know what they are doing, Its good news that new lenders are entering the market.