- New research1 reveals nearly six in ten aspiring homeowners think they would be able to borrow up to ten times their income for their mortgage
- Three quarters mistakenly believe LTV stands for “Long Term Value” and refers to expected house price increases over time
- Three in five think “exchange” is when you hand over keys on moving day and 43 per cent expect to get any fees already paid refunded if a chain collapses
- Recent new homeowner and Jungle Queen Georgia “Toff” Toffolo shares the top things she wishes she’d known before buying her first home
A new study from Santander Mortgages has revealed striking misconceptions and knowledge gaps among aspiring first-time buyers as they prepare to make the biggest purchase of their lives.
The research – which surveyed 2,000 non-homeowners – suggests first-time buyers need some help to be better informed about the homebuying process to protect themselves from stress, legal headaches, and disappointment. The findings come as Santander launches over 1,000 free in-branch educational events across the UK to offer support on a range of topics – from property viewing to finding a removal company – for those looking to buy their first home.
Top misconceptions among first time buyers
| % of would-be buyers that believed statement to be true | statement |
| 76% | LTV stands for “Long Term Value” and refers to the projected amount your property is expected to increase in value over the mortgage period |
| 71% | The seller is obliged to tell you about any problems with the property during a viewing |
| 63% | Mortgage interest rates are lower in parts of the UK where house prices are cheaper |
| 62% | “Exchange” happens on moving day and is where you exchange keys |
| 57% | A mortgage lender will let you borrow up to ten times a single or joint income |
| 56% | Buildings insurance is optional when buying a property with a mortgage |
| 45% | It is only your responsability to insure the new property once you have moved in |
| 43% | If a chain collapses any costs already paid (e.g. legal fees or surveys) will be refunded in full |
| 39% | The interest rate agreed on your mortgage will stay the same for the entire life of your mortgage |
| 26% | Once a seller has verbally accepted your offer, they are legally obliged to sell you their property |
| 23% | House deposits are refunded after the first year of purchasing a property |
| 22% | The estate agent will pay for the survey of the property |
| 8% | Stamp duty is the fee for registering a property with the postal service |
But while aspiring new homeowners may lack some knowledge about various aspects of the homebuying process, they are typically prepared for the financial costs associated with getting on the ladder. In fact, on average new buyers are overestimating the typical fees involved for solicitors, surveys, removals and land registration. And while 58% admit they do not know what stamp duty actually is, new buyers are aware that it is an added cost that they must factor into the purchase.
Miguel Sard, Managing Director, Santander Mortgages, said: “The home buying process can sometimes seem very complicated and old fashioned, with lots of confusing jargon to get your head around.
“While first-time buyers can access a raft of help and advice when it comes to picking the right mortgage, we want to go one step further, helping first-time buyers on the road to homeownership in as many ways as we can. From tips on budgeting to avoiding solicitor scams; buying insurance to having a kettle at the ready on moving day; our new events are designed to arm buyers with everything they need to know to avoid potential pitfalls and get the home that’s right for them.”
The events are being run in Santander’s 614 branches across the UK. They are open to anybody, no matter what stage of the homebuying journey they are at, and participants don’t need to be an existing Santander customer to register. To book a place at an event in a local branch simply visit: https://www.santanderevents.co.uk/events
Made in Chelsea star and previous winner of ITV’s I’m a Celebrity Get Me Out of Here Georgia 'Toff' Toffolo recently purchased her first home in London and has experienced some of the pitfalls and lessons of the house buying process first-hand. Commenting on the findings, Toff said:
“Buying your first home is the most exciting thing, it’s so easy to get swept up in the thrill of having something that is ‘yours’.
“When I was buying my first home, I wish I’d known more about the whole process. I would have nightmares that moving day would never come, and I’d be living amongst cardboard boxes forever – I thought I’d be drawing a Christmas tree and decorations on corrugated cardboard rather than decorating a lovely a new home!
“The new events from Santander are a great way to find out all you need to know before you’re thrown into it headfirst.”
Santander recently published an in-depth report on the UK’s first-time buyers, The Future of the Homeownership Dream (PDF - 13.81 MB) which explores the challenges of being a first-time buyer today. The bank has also introduced a number of measures to support first-time buyers including free Homefact surveys, 40-year mortgage terms and accepting gifted deposits from family or friends.
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Notes to Editors
- Research conducted by Opinium between 20 August and 30 August 2019 among 2,000 economically active UK adults aged up to 40 who do not own their own home.
The information contained in our press releases is intended solely for journalists and should not be used by consumers to make financial decisions.
Notes to Editors
Santander UK is a financial services provider in the UK that offers a wide range of personal and commercial financial products and services. It has brought real competition to the UK, through its innovative products for retail customers and relationship banking model for UK SMEs. At 30 June 2019, the bank has around 24,000 employees. It serves around 15 million active customers, via a nationwide branch network, telephone, mobile and online banking; and 62 regional Corporate Business Centres. Santander UK is subject to the full supervision of the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) in the UK. Santander UK plc customers’ eligible deposits are protected by the Financial Services Compensation Scheme (FSCS) in the UK.
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