Survey Reveals Lack of Knowledge among First Time Buyers
First time buyers in England are often confused about the buying process with new research revealing that two thirds think that an estate agent or a surveyor carries out legal searches.
The survey of people who are planning to buy their first home in the next three years found that just 33% correctly identified what a conveyancer does, leaving 67% believing that it was the responsibility of the surveyor or the estate agent to carry out searches such as environmental, water/drainage and chancel repair liability.
The research from home move comparison site Really Moving also found that over a third, some 36%, think someone else will pay for a survey on a property they wish to buy and 37% think the exchange is the day they get keys and move in.
The firm said that misunderstandings about the costs involved when buying a home could lead to first time buyers being unprepared and underfunded, ultimately leading to transactions falling through.
While most first time buyers are now exempt from paying stamp duty, many are unaware what it is. Some 24% think stamp duty is paid by the seller, a further 8% believe it is a payment the buyer makes to the seller, with a further 7.5% believing it’s a charge from solicitors.
When it comes to paying solicitors fees, most survey respondents vastly over estimated how much they will be charged for conveyancing. When asked how much solicitors fees are likely to be on a £250,000 property, 69% guessed around £1,500 when in fact the average is £550.
The research also found confusion about jargon commonly used in the home buying process. Only 60% said they planned to secure a mortgage in principle in advance of offering on a property and only 55% understood the true meaning of ‘exchange’, with 37% believing it’s the date they collect the keys and move in.
‘Failure to grasp the fundamentals of the home buying process will create big problems for first time buyers and could lead to unexpected costs and transactions falling through,’ said the firm’s chief executive officer Rob Houghton.
‘Buying a property is rarely straightforward, but it is in the best interests of first time buyers to ensure they are as well prepared as possible, with a good understanding of the different roles of the professional involved, who pays for what and the likely costs,’ he pointed out.
‘First time buyer activity is surging this year, thanks to changes to stamp duty and the huge popularity of Government schemes such as Help To Buy, so it’s more important than ever that they are going into the process with their eyes open,’ he added.