Citystay Property Agents know that buying your first property can be a daunting prospect; so, we have put together the following guide to help you through. With this guide and our local knowledge we are confident that you will be able to retain the excitement that buying your first home brings.

The first step is often to get to know about mortgages:

Mortgage: A loan taken out to buy property or land. The money borrowed is the capital and the lender will charge interest on it until it’s repaid.

The loan is secured against the value of your property until it’s fully repaid. This means a mortgage provider can sell your property to recover the monies owed if repayments are not kept up.

It is therefore important for you and your lender to be satisfied that you are able to keep up repayments throughout the term of the mortgage. To this end potential lenders will undertake financial, employment and credit checks among others, on anyone wishing to set up a mortgage.

Be Solvent

The Cambridge property market can move very fast, so to save disappointment have your finances in order and a mortgage offer in place

This means keeping up repayments on any credit cards and loans and paying off any outstanding debt. Good money management will attract a wider choice of potential mortgage providers which you can then choose from to set up a mortgage offer in principal.

Budget for a Deposit

The usual minimum deposit required is between 5-10% of the cost of a property.

Use a monthly budgeting tool to assess your current spending and which items are essential and which can be cut back on to save each month for your deposit.

Build Your Credit History

Check your credit score with via such as companies as Experian and Equifax, with the aim of being able to demonstrate to potential lenders your ability to manage money. Keeping up with credit card payments is a good way to show this. So make sure you are ding so and that your credit score is good.

Gifted Deposit

You may be fortunate enough to have a parent / relative assistance gifting you the monies for a deposit. This will require an accompanying letter from the givers confirming it is a gift. Proof of the source of such funds should be requested.

Instruct a Solicitor Early

Instructing a good solicitor when buying a property is vitally important and doing this early on will help the transaction to move as quickly as possible.

The solicitor will help you to take care of all the legal and administrative details so it is key that you use a solicitor that you trust and feel comfortable with. Citystay Property Agents work closely with trusted solicitors who we feel will give our clients a very good service. Ask your Citystay Property Agent for details

Get Your Paperwork Sorted

Send all the requested paperwork in the form of ID, payslips and bank statements to your mortgage broker and solicitor as soon as you can. This will speed up the process once you have had an offer accepted.

Having your paperwork pre-organised can set you in a favourable position if competing with other bidders who have not done so and therefore appear as less serious buyers.

Contacting a Mortgage Consultant

At your earliest opportunity you should take time to speak to a professional mortgage consultant. Citystay Property Agents work closely with specialist mortgage consultants who have access to the wide range of mortgage products including some not readily available elsewhere. Ask Citystay property Agents to put you in touch and you will be able to choose a mortgage and lender that are right for you.

Your mortgage consultation will consider all of the following:-

• Your maximum borrowing limit and which lender is likely to agree to it.
• Discuss acquiring an Agreement in Principle (AIP), subject to I.D. and Credit checks ,be careful not to negatively affect your credit rating. Your mortgage consultant will be able to explain this in more detail.
• Assess the affordability by going through a detailed budget planner with you.
• Which type of mortgage suits you, i.e, a Fixed Rate or a Variable Rate.

Fixed Rate

With a fixed rate you know exactly how much you will have to pay each month. It does mean ,however, that your monthly payment will stay the same during the fixed period, even if other interest rates decrease.

Fixed terms are typically for two, three or five years and in some cases longer. Most lenders charge a penalty fee, an ”early repayment charge” (ERC) if you repay the mortgage before the term ends.

Interest on fixed rates tends to be slightly higher than variable rate mortgages.

Tracker variable rate mortgages are tracked to a rate such as the Bank of England base rate and move in line with their changes. So, if the Bank of England puts the base rate up by 0.25%, your mortgage rate will rise by the same amount.

Discount Variable mortgages are linked to the lender’s SVR, rather than the Bank of England base rate. SVRs are set by each lender and therefore can change even if there has been no change in the Bank of England rate.

Variable rate mortgages can offer the lowest initial interest rates but can fluctuate hence monthly repayments payments can go up and down and are thus more difficult to budget for.

Some lenders combine different types of mortgages, e.g. a fixed and a tracker.

Remember that your home may be repossessed if you do not keep up repayments on your mortgage.

Deposits

This is the amount of money you are putting in from your own sources, whether that is your savings and investments, equity from the sale of a property or from parental assistance in the form of a cash gift. Proof of the source of all funds for a deposit is required.

The amount of deposit you put down will determine the amount of your mortgage. the Loan to Value percentage (LTV) is the amount of money you borrow against the value of the property. The more you have as a deposit, the less you will need to borrow. The lower the LTV the lower the interest rates. However high arrangement fees or having to revert to a higher interest rate during the deal period should also be taken into account.

Other Costs

Solicitor’s fees, valuation and survey fees, lender product/mortgage arrangement fees and Stamp Duty Land Tax (SDLT) which can be checked on a stamp duty calculator, buildings insurance, contents insurance, and if you are living in the property the council tax rates and utility bills

Your Citystay Property agent will help you think through:-

• What you can afford?
• Where in Cambridge you want to live?
• What the local amenities are – e.g. schools, shops, transport links, medical centres, parks, gyms, and restaurants etc.
• What you require from the property itself – e.g. period or modern, outside space, parking, accessibility etc.

There are many reasons for buying a property in Cambridge and each individual’s requirements vary. Citystay property agents are adept at helping individual purchasers to balance their budget, location and size of a Cambridge property enabling you to find the right property for you.

Environmental & Exterior Issues

• Flood risk – visit the GOV.UK Flood Map for Planning Service site to find flood risk information on the property.
• Development plans – visit the Greater Cambridge Shared Planning site to see if there developments planned that may positively or negatively affect the area.
• Noise – check whether the property is near busy roads, trainlines, factories, etc., or is under a flight path. If you can, visit at different times of the day, when noise levels may be more evident – especially at rush hour!

The following points should be considered to help you choose the right property for you: –

• Type of property – what is the best type of property for you – a new build or period property, a detached house, apartment, bungalow, etc.?
• Accessibility – do you need to consider any mobility difficulties, e.g. is there a lift or only stairs?
• Size – is the property going to be big enough if your family grows?
• Freehold or leasehold -leasehold properties restrict the number of years you are able to occupy a property. They are more popular in apartment blocks and thus bought by first time buyers who are likely to be younger, rendering the restriction less impactful.

Selecting a solicitor that you feel comfortable with is very important and it is advisable to begin your search early on in the process. Citystay Property Agents work closely with local, trusted solicitors who we are confident will give our clients the best service. Please ask your Citystay Property Agent for details.

Your solicitor will: –

• Receive your formal instruction and verify your identity.
• Check that the seller’s contract bundle details match your (the buyer’s) expectations. The contract bundle received by your solicitor from the seller’s solicitor will include: draft contract, official copies of Land Registry Title documents, lease (if applicable), management information pack (if applicable), the seller’s property information and fixtures forms, building regulation documents etc.
• Check property boundaries, access and any restrictions.
• Advise you of their assessment of the results of any survey report.

• Undertake searches, assessing results and raising additional enquiries if necessary. Searches include: the Local Authority planning department for future plans or preservation orders affecting the property, the surrounding environment to check for contamination, church repair (chancel) liability; the water and drainage connections and any location specific searches such as a coal mining search.
• Raise enquiries / request clarification on aspects of the property / transaction, e.g. building regulations or planning permission documentation for works completed on the property.
• Act for your mortgage lender making sure all their financial and administrative requirements are fulfilled.
• Negotiate exchange and completion dates.
• Manage the transfer of monies to all relevant parties, including land registry & stamp duty.
• Register you (the new buyer) with the Land Registry
• Undertake post-exchange searches to ensure the property is clear of any legal charge
• Any other legal work that may be required, e.g. a declaration of trust if there is to be a distribution of shares in a property for example.

Citystay Property Agents provide the ability for you to search for properties by various criteria and will contact you when new properties come to market that match your requirements. On our website you can search for properties in a variety of ways, access a plethora of useful information about properties and the process of buying a property in Cambridge. Having a database of potential buyers, Citystay Property Agents are able to match properties to buyers, sometimes prior to fully marketing the properties online.

Keep in touch with us in order to make sure you hear about properties at the earliest opportunity, prior to others.

An organised, optimal shortlist will include the following: –

• Further information from estate agents on each shortlisted property.
• Being dynamic: removing sold or ruled out properties and adding new properties matching your criteria as they come to market.
• Prompts to arrange viewings, as this is the ultimate test of if you will like a property. Brochures and website pictures and floor plans are nice, but are no substitute for seeing the property itself within its environment, without such things as staged, wide angled photography that can be deceptive.
• A checklist of questions for a viewing (see later).
• Comments after viewing of house and neighbourhood.
• Second viewings: As favourites begin emerge, arrange second viewings to see these properties at a different time of day to your first visit, providing  you a fuller understanding of the property and the area.

To get the most out of a viewing, there are a number of checks you should make yourself and a number of questions you should ask. The following checklist, we trust, will be helpful as a guide: –

• If the lights are on in the daytime, turn them off to see how much natural light there is.
• What is the shape of the room/ how will your furniture fit?
• Is the floor level? If not, is this due to the age of the property or is it something more sinister such as subsidence?
• Check mobile phone reception in all rooms.
• Is there enough space to cook in the kitchen?
• Are there any rooms that can only be accessed by walking through others?
• Parking: if it’s off-road, are parking permits required? Are there excessive parked cars due to locality, e.g. near a station or tourist attraction?
• If there is a garden, is it private or overlooked ?
• Utilities: are all taps, drainage and hot water working ok?
• Can the heating and oven be demonstrated as working?
• Are light switches and power points sensibly located and working?
• Are all timber frames in good repair (see loft if possible)?

• Are external walls cracked or discoloured?
• Roof: are there any slipped tiles, or crooked or damaged chimney?
• Are any ceilings cracked or stained?
• Is all double glazing intact?
• Are all external doors secure and working?
• Are any floor or walls behind furniture or under rugs discoloured or damaged?
• Is there any woodchip wallpaper or Artex ceilings, as these can be difficult to remove.
• Are there any signs of damp, such as smell, peeling wallpaper or stains?
• Which parts of the garden and which rooms get the most sunlight and when?
• Is there any noise from busy roads, bus routes, trains, flight path, etc.? Remember this can differ vastly at different times of the day and week.
• If you can, speak to other residents in the area, not just immediate neighbours, to gain a balanced view.
• Use some local amenities, including restaurants, shops and the park.

Price

Estate agents should tell you if there have been other offers, but not what they are. You may wish to offer less than the asking price due to similar properties being sold for less, work being needed on the property, and / or it has been on the market for a long time. In such cases your offer has to reflect what you think the true value is in order to be taken seriously and avoid drawn-out negotiations, by the end of which other offers may come in.

Cambridge is a price-sensitive market and an honest and transparent agent such as Citystay Property Agents will advise on if it is prudent to offer the asking price or exceed the asking price to secure the property you are seeking. Typically, offering above the asking price would only be prudent when the market is buoyant, properties are attracting many offers and are being purchased quickly.

Sealed Bids

Short-term let rentals can be more lucrative than longer term rentals. Landlords can benefit from a higher rental return and the flexibility of extending tenancy contracts on a weekly or monthly basis at your discretion. Short-term lets can also come with increased periods of vacancy, which is why it is recommended landlords also consider long term tenants.

To make the offer, contact the seller’s estate agent, who will manage the process. The offer you submit will be subject to satisfactory survey reports, the terms of the contract and your ability to proceed, including a pre-arranged mortgage offer in principle.

If your offer is accepted in principle, you should to ask for the property in question to be removed from the market and not shown to any other potential buyers. It is worth noting, however, that the seller is not obliged to agree to this.

Sale Agreed

Sale agreed is the stage at which your offer has been accepted (subject to contract). Both parties have up until the exchange of contracts to pull out of the agreement, should they wish to do so before the contract becomes legally binding.

At sale agreed your solicitor will begin work on all the legal aspects of the sale and will receive the memorandum of sale from the vendor’s estate agent to confirm acceptance of the offer. You / your mortgage adviser will begin your formal mortgage application.

Exchange of contracts

The formal exchange of contracts agrees the terms of the sale and makes them legally binding to both you and the seller.

For this to take place you will have already: –

• received a final report from your solicitor
• finalised and signed your mortgage documents
• sent your deposit to your solicitor
• made sure you understand the terms of the contract and asked your solicitor if you were unsure about anything within the contract.
• made sure that you understand which fittings, fixtures and appliances will be included in the sale
• signed your copy of the contract

The terms of the sale are now legally binding, which means that your deposit is non-refundable if you change your mind. The vendor is obliged also to sell to you the property at the price you have agreed.

Exchange has now taken place and you can await the completion date with excitement!

At Citystay Property Agents we understand that although exciting, moving properties can be very stressful. The more prepared you are, the less stressful it will be. We are pleased, therefore, to offer the following tips on how to prepare for the day to minimise any anxiety involved.

Planning your move

• As soon as you know the date of the move, book a removal company, if applicable. Citystay Property Agents have secured favourable rates with reputable local removal services. Contact us to find out more.
• Arrange for children and pets to be looked after if necessary.
• Book any necessary time off work, both for the move and a brief settling-in period if possible.
• Although not always possible, having the luxury of moving over the course of a few days can make things easier at each end and provides a good opportunity to decorate or clean your new home while it is empty.

Prior to move day

• Clear out opportunity: throw away, recycle or donate everything you don’t want or haven’t used in years, leaving you less to move and stress about.
• Pack up: don’t overload boxes as they will be harder to transport. Label each box carefully with its contents, the destination room in the new home and if  it is fragile.
• Dismantle furniture: bag up screws and label accurately.
• Have an “essentials” box, containing bed linen, towels, toiletries, mobile phone chargers, a small toolkit and any medicines required on your first night in your new home.
• Plan remaining meals: use up the food in your fridge and freezer in the week before the move.
• Prepare a handover for the new homeowner: include such things as location of white goods manuals, heating instructions, location of fuse board and stopcock, your new address and phone number for forwarding post. A welcome card and a bottle of wine are a nice touch!
• Contact relevant service providers and regular deliveries.
• You may also wish to set up a redirect service via the Post Office.

The day of the move: as you leave

• Check and double check: carefully check your existing home before you leave for anything left behind. Check the attic and every cupboard in every room.
• Essentials kit: your bag of essentials should be packed and to hand. Keep this with you throughout the move.
• Clear the fridge: take any food that is worth keeping in a cool box and eat or dispose of the rest.
• Removal company: if you are using one, double check the removal company has two correct addresses and your phone number.
• Shut down: switch off all appliances and the heating.
• Meter readings: check and make a note of your meter readings.
• Keys: lock up your old house and leave the keys wherever specified, usually with your estate agent.

Moving day: arriving at your new property

• Collect your keys: your estate agent can only release the keys upon confirmation from the seller’s solicitor that they are in receipt of funds. You will need to bring photo ID with you to collect your new keys.
• Account for every box: check with the removal company that each box, bag and item of furniture is unloaded and placed in the allocated room, and that nothing has been damaged in transit.
• Removal lorry: double-check the removal vehicle before it leaves to make sure that nothing is left inside.
• Power and water: check all your utilities are working. Make sure you have electricity and hot water.
• Stock up on essentials: put any food you have brought with you into the fridge or freezer, and make a trip to the local shop to stock up any essentials, such as milk and bread.
• Do not rush: take your time unpacking to avoid damage.
• Take a logical approach: get the larger items of furniture in place first, and focus on the most important tasks first, such as building your bed.
• Tidy as you go: flat-pack boxes and stack them neatly as you empty them.
• Meet the neighbours: introduce yourself to any neighbours you see on the day.
• Meter readings: take meter readings and make a note of these.

Common Issues

Delays getting a mortgage

• Buyers need to be prepared for what they must provide to a lender well in advance of the application. It is necessary for buyers to evidence their income, their expenditure and their affordability, both now and in the future. You should speak to a mortgage and protection consultant to fully understand what is required so you have time to collate all the necessary documentation and avoid unnecessary delays.
• Citystay Property Agents work closely with trusted mortgage consultants who can help you  establish how much you can borrow, what all the costs are likely to be, including Stamp Duty, and how much it will cost you on a monthly basis.

Estate agent and solicitor

• Choosing an experienced and recommended solicitor, not just the cheapest, can help avoid any problems.
• The estate agent you are working with when buying a property will have been chosen by the seller and will be working on the seller’s behalf. Courtesy and professionalism will help to keep the process running smoothly. If you are beginning to feel pressured, then let your solicitor know.
• In extreme cases, where you feel you have a genuine complaint to make against your solicitor or the estate agent, you can raise it with the relevant ombudsman.

Seller and other buyers

• Even if you have met the seller and have a good relationship with them, they can still change their mind without notice. They may suddenly decide not to sell, or your offer may be gazumped by a higher bid from another interested buyer.
• Buying a property can be very emotional, but you cannot force the seller into a decision. Likewise, you may not want to enter a bidding war.

The lender’s valuation is less than the price agreed

• The property is deemed to be worth less than you are intending to pay for it, the lender may decide not to lend you the money you have asked for. In such a circumstance, the first thing you should do is to talk to the seller’s estate agent, and try to negotiate a lower price in line with the valuation.
• If your revised offer is rejected and you still want to buy the property at the agreed price, you will either have to come up with the extra money as part of the deposit or you may need to find a different lender. However, any new mortgage provider may agree with the initial lender’s valuation and the same outcome could reoccur. You then need to decide whether you want to proceed with the purchase. There may be good reason that the property is said to be worth less.

Getting caught in a chain

• In lengthy chains, a sale several links up or down the chain may need to be finalised before everything else can begin to fall into place.  Although not always feasible, there are solutions:
  • A seller within the chain may move into temporary accommodation so their buyer can proceed with their purchase and the chain is not broken. Our sister company, Citystay Ltd, are the leading providers of such accommodation within Cambridge.
  • Another option to keep the chain going may be for a buyer in the chain taking out a bridging loan so they can buy their new property before selling their current one.
  • These solutions are not always feasible, and chains can sometimes reach an impasse, resulting in the whole process needing to begin afresh.

Damage to the property

• Buyers property insurance can be taken out from the date of exchange of contracts from which time, the seller should alert you to any damage that occurs, and claims can be made on the policy.

Survey issues

• A detailed survey may bring up significant issues that could affect the value of the property. These then will have to be discussed with your solicitor prior to any progression taking place. Such issues may not be insurmountable but will require addressing.

Legal fees

• You will require a property solicitor or licensed conveyancer.
• Solicitors might offer fixed fees, charged by the hour, or take a percentage of the property value so it is important to know what the fees are likely to be from the beginning.
• Citystay Property agents work closely with trusted solicitors who are transparent with their fees from the beginning.
• A good rule of thumb for seeking any professional service is to get three quotes.

Lender’s valuation fee

• When you have had your offer accepted, your lender will commission a surveyor to value the property to make sure it is worth what you are paying for it. Sometimes covered in the mortgage package, but if not specified you should enquire how much it will be. Usually  hundreds of pounds.

Stamp Duty Land Tax (SDLT)

• SDLT is a tax paid by the buyer of a UK residential property when the purchase price exceeds £250,000.
• This is likely on most purchases in Cambridge.
• The stamp duty rate ranges from 5% to 12% of the purchase price, depending upon the value of the property bought, the purchase date and whether you are a multiple home owner.
• For more information on these updated rates and for help calculating the amount of SDLT you might owe on residential properties, use GOV.UK’s stamp duty calculator.

Searches

Your solicitor or conveyancer will arrange the searches, assess the results and report on their findings to both you and your mortgage lender.

Searches are checks of: –

• the local authority planning department for future plans or preservation orders affecting the property
• the surrounding environment to check for contamination
• church repair (chancel) liability
• the water and drainage connections
• any location specific searches such as a coal mining search.

The cost varies depending on in which local authority you are buying. You will typically pay between £250 and £300 for searches.

Insurance and Income Protection

• Home insurance falls into two categories; buildings and contents. You can buy them together from one insurer or separately from different providers. Home insurance provides important cover for your buildings, contents and personal possessions against loss or damage.
• Buildings insurance is usually a requirement when taking out a mortgage and is usually required to be in place on exchange of contracts. However, extra insurance covering items such as contents, personal possessions and family legal protection will help to meet all your home insurance needs.
  • If you are buying a leasehold property, the freeholder of the building will often be responsible for buildings insurance and will pass the premiums on to you through the service charge. You will need to check this in your lease before you buy. Specialist landlord’s building and contents insurance is available if you plan to rent your property.
• Critical illness cover, life insurance and income protection: it is prudent to consider what will happen if you are no longer able to cover your mortgage repayments due to losing your job, suffering illness or injury / death. Citystay property Agents work closely with trusted financial advisors who can advise on this. Contact us to ask.

There are several schemes available that have been set up to make buying a home more achievable if you are finding it difficult to save for a deposit.

Shared ownership

• Shared ownership schemes provide buyers the opportunity to buy part of a property from the owner, and pay a reduced rent on whatever is outstanding.
• Under this scheme, the buyer will usually buy between 25% and 75% of the property, leaving the landlord, usually the council or a housing association, to own and collect rent on the rest. The owner’s monthly payment will partly cover this rent and partly go towards the mortgage taken out to buy their share in the property.

• Over time, the buyer can purchase an increasingly  larger share of the property until they own it outright. At this point they will continue to pay off the mortgage, but will no longer pay any rent.

Part exchange

• If you already own a home but are looking to purchase a new build property, you may be able to take advantage of a part exchange incentive that some developers offer. This will appeal to many people looking to move home, as it means you can buy a property even if you have not yet sold your existing one.
• In these cases, the developer becomes the buyer of your home, for which they pay a market-related price. The price should be based on independent valuations. The developer usually then sells your old property at a later date.

The new Leasehold and Freehold Reform Act is now law but yet come into effect. The current laws thus remain until the government decide when to implement which parts.

Once in effect, the Act will strengthen existing leaseholder and consumer rights by: –

• making it cheaper for leaseholders to extend their lease or buy their freehold.
• increasing the standard lease extension term to 990 years

• Giving leaseholders greater transparency over their service charges .
• Making it easier and cheaper for leaseholders to take over management of their building.
• Extending access to redress schemes for leaseholders to challenge poor practice.
• Speeding up the buying and selling of leasehold properties by setting a maximum time and fee for home buying and selling information.
• Diminishing the existence of leasehold properties by banning the sale of new leasehold houses.