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 responsibility 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.”
Santander recently published an in-depth report on the UK’s first-time buyers, The Future of the Homeownership Dream which explores the challenges of being a first-time buyer today.