The lockdown imposed to restrict the spread of the Covid-19 virus has impacted all industries and all individuals. Home-buying is certainly not an exception - read on to find out how you might be affected, and what you can do to make the most of the pause in usual routine that can put you in the best possible position for when restrictions are lifted.
Take this lockdown as bonus time, giving you a chance to :
Find and organise your paperwork
- Eek out more savings for your new home
- Re-evaluate and refine your needs in a home
- Research, research, research! Understanding the market in the area you’re looking to buy in will give you a huge advantage when it comes to negotiating the price later down the line
Finding and organising your paperwork
Less than 1% of the human population enjoys dealing with paperwork, but as part of the home-buying process you will need to put aside some quality time to get reacquainted with your payslips, bank statements, and other essential documentation. Whether you need this now or in a few months, why not get it organised now when you’re locked in your home anyway?
Get your paperwork ready to submit to the lawyer and broker:
- create a digital folder (preferably using a cloud service such as Dropbox, Google Drive or iCloud), ready to start putting in the relevant files. Label the files as you go and put them into logical folders (eg. “payslips”) for ease of access
- where files exist in a paper version, scan them using your phone (some of the best apps for this include Adobe Scan or Genius Scan, available on Google Play & App Store). Once you’ve done that, you may as well stick them safe inside a physical folder and keep it safe. Some conveyancers and/or brokers will require paper copies, so save yourself printing them off again later!
- See our list of documents your mortgage broker may ask for to support a mortgage application:
- utility bills
- P60 form from your employer
- your last three months’ payslips
- passport or driving license (to prove your identity)
- bank statements of your current account for the last three to six months
- Council Tax statements
- insurance policies
- Bank statements to give evidence of general living costs such as travel, childcare and entertainment
- And also the following, if they apply to you:
- proof of benefits received
- statement of two to three years’ accounts from an accountant if self-employed
- tax return form SA302 if you have earnings from more than one source or are self-employed
- self-employed people should look to provide information alongside their tax return, which supports what the SA302 says about their income, such as bank statements
And that’s not all! Further down the line, your legal representative will also need some documents from you to finalise the legal process of buying a property:
- Proof of Funds (bank statements, letter of gifting if applicable)
- Proof of Identity
- You will need to give proof of who you are, which should be one of the following:
- Current Full Signed Passport
- Current UK or EU Photo Driving License
- Proof of address
- And you’ll need to give evidence of where you reside, which can be any of the following documents:
- Latest Council Tax Bill
- Bank/Building Society statement dated within the last 3 months.
- Utility Bill dated within the last 3 months (not a mobile phone bill)
- Current EU/UK Photo Driving License
Now that your paperwork is ready to go, let’s tackle the next big job: your finances.
Eek out more savings for your new home
If you’re considering buying your first home, you already have a handle on your savings. Now is a great time to look at this figure, have you already budgeted for additional costs of moving home? See our article for a reminder of the costs of buying a home beyond just the cash deposit.
If your savings and budgeting are already ship-shape, think about whether anything has changed since you last got a mortgage quote or spoke to a mortgage broker. Have you or your purchase partner received a recent pay rise? Have you finished paying off some debt or had any other changes that could impact your affordability? If so, now is the time to update all the involved parties. You can check out the Peculiar calculator to get an indication before you speak with a broker.
Now is also a great time to look ahead. If you are facing a delay to your home-buying plans due to the current social distancing measures, take this as an extra few months worth of savings to add to your kitty. A boost of anything from £500 up to a few thousand extra in savings could improve your affordability or mortgage interest rate (it depends on your circumstances and only a mortgage broker could advise you on this). At the very least it will certainly help go towards the extra costs of moving home, whether that means a bigger budget for your sofa or adding in optional property checks during the conveyancing process.
Finally, if you haven’t yet got round to it, check your credit record. It’s free to do and doesn’t take long. Above all, checking your credit score will not affect it, contrary to some popular myths. Being confident in your credit record will put you on a much better footing (and prevent any nasty surprises) when it comes to applying for a mortgage, as well as giving you time to remedy any problems that are revealed.
Reevaluate and refine your needs in a home
If you’ve followed the steps above, and something has changed, update your property search preferences. The same applies if you’ve realised that you really need a garden or that you only need to commute to the office twice a week. Chances are that there are fewer new homes coming onto the market, but by re-defining your search with the benefit of additional knowledge, you may find some homes that previously escaped your search limits. Are you sold on new-builds or are your recent home DIY efforts making you realise that an existing property might be better for your needs? (not to mention better value - according to research by Peculiar’s data scientists)
Once you’ve shortlisted some new and better homes, request a virtual viewing. It’s pretty clear that going to a property viewing is not an essential journey, so let’s stay at home and observe from the safety of our laptops and electronic devices. Depending on the estate agent, a virtual viewing may or may not be possible.
Here are some ways to get started.
Do your own “curb-side analysis” using Google Maps Street View
This is extra important as you won’t be doing an in-person viewing any time soon. Take a look around the surrounding area and houses, you might even get a glimpse of the neighbours! (although worth remembering these images could be up to 3 years out of date). If a floor plan of the home is not included in the listing, request one from the estate agent.
Check the listing for virtual tours or videos already uploaded
On some sites these are well hidden. Following brief checks on Rightmove and Zoopla, the UK’s top property listings sites, these are absent for the vast majority of properties - if this is the case, move onto the next point.
Request a viewing via the website as you would with a physical viewing
Make it clear in the request form that you would like to do a “virtual viewing”, and if appropriate, specify which video platform you would like to use for it. On most sites you’ll need to give an availability time slot just as you would for a normal viewing. The good news is that, given the circumstances, most sellers will have improved availability for virtual viewings.
Virtual viewings might be attended by an estate agent as well as the seller
Use the opportunity to see the home, take notes and ask questions, just as you would during a physical viewing.
If you think the home has potential to be in your top 3 - stay in touch with the agent and log your interest in a physical viewing as soon as it can be permitted.
Research, research research!
In the meantime, go to town on your research, using resources such as Land Registry, Citymapper and social media to compare prices on properties in your search area and investigate whether the location and neighbourhood could suit you. Keeping abreast of local developments and similar property prices will put you in the best stead when it comes to negotiating the price later down the line.
You could use the time (and your enlightened financial view) to consider your medium to long term plan for ownership of the property. Will you be looking to stay there? To rent a room out? To extend the property or to remortgage later down the line? Now is a great time to consider and read around these options. Always speak to a mortgage broker for tailored advice, but websites such as MoneySavingExpert.com and MoveIQ are good starting points for guidance on future property plans.
