The best of both worlds: an impossible dream?
Buying a house and getting married are two of the biggest events in life, and feature high on the list of life goals for both men and women.
However, our research has shown that it’s become difficult for us to have both, with only 50% of those we surveyed able to afford to get married AND buy a home together.
So which to prioritise? Three quarters of those we surveyed said they’d favour getting on the property ladder over getting hitched. In this guide, we offer some tips on planning and budgeting, which may be helpful if you’ve got your heart set on managing to do both:
Choose the property
With house prices reaching £186,325 in England and Wales and £506,724 in London, it’s tough to find the money for that all-important deposit.
Jess Davies chose to buy a house with her boyfriend, Mike, before getting married. She is 29 and lives in Norbiton, South West London.
“We bought a house together in 2014, got engaged in 2015 and are getting married this August. Although at the time of buying a house we had been together for eight years, we wanted to buy somewhere before getting married. We couldn’t afford both, and getting on the property ladder was just much more of a priority. We felt we were wasting money renting and really wanted a place that was truly our own. Our attitude was, we’ve been together so long, what’s another couple of years of waiting to get married versus another couple of years of paying rent – and someone else’s mortgage instead of our own?
“The majority of our friends are in the same position, in fact we only know one couple who haven’t made the same decision to put off marriage and buy a home first. When it came to getting a mortgage, we found a good mortgage advisor and took the time to fully understand our options. Buying a house for the first time can be overwhelming, so having someone you trust who can honestly and realistically advise you on your finances, what you can afford and how to make the most of your money is invaluable.”
Chestertons’ top 10 tips for prospective homebuyers:
1. Unless you are one of the lucky few cash buyers, you should arrange your mortgage finance before you start your property search. This will enable you to find out how large a deposit you will need to put down and how far your total budget will extend. Without doing this, you will not know what you can realistically stretch to and could waste time looking at places you can’t afford.
2. Research your target location in terms of pricing and neighbourhood amenities. There’s plenty of information on the internet, but you can’t beat actually spending time in the area where you’re planning to move to; have a coffee or a meal, shop in local stores, visit the library and commute in and out using public transport so you’ll get a feel for the options. If you drive, it’s worth checking out parking options at peak times, too. Also check out major development, regeneration or infrastructure projects planned that will impact the area – Crossrail or Thameslink services, a new connection to the London Underground network, or a major station upgrade such as those at London Bridge or Euston if HS2 goes ahead as planned, will all add value to your home over time.
3. Check your target property thoroughly, taking time to visit at different times of the day to check whether the peaceful daytime paradise location becomes a night-time hell. Also, ask the property owner as well as the selling agent questions about the house and neighbourhood.
4. Remember to factor in all costs involved in your move – stamp duty, legal and agent’s fees, survey, mortgage arrangement fee, removal charges.
5. Likewise, calculate your likely occupational costs – eg mortgage payments, utility bills, telephone, council tax, building and contents insurance, any immediate repairs/maintenance work, additional furniture, white goods etc.
6. Check your seller’s move status by staying in regular contact with your solicitor. This can help to speed up the whole process and avoid any unexpected shocks.
7. Don’t necessarily rely on the lender’s valuation survey – if the property is old then a more detailed Homebuyer survey is advisable – or even a full structural survey. A higher outlay at this stage could save a lot of money later on.
8. Carefully read any documents associated with your purchase. This includes the mortgage offer, checking, for example, interest rates and any early repayment penalties. Also, find out what will remain in the house (assuming a resale property) in terms of fixtures and fittings.
9. When you have a completion date, don’t forget to speak to the telephone and utilities companies regarding continuing supply to the property and setting up payment accounts. You will also need to arrange to pay the council tax.
10. Particularly in London, it’s very important to check whether you are buying the freehold, a share of the freehold, or a leasehold – if it’s the latter check the length of the leasehold you are buying (ideally 50-99 years), as well as finding out the freeholders name and contact details. Also ask about ground rent and service charges that may be payable, and whether there’s a property manager in place.
Location, location, location
Daniel Killick, Manager of the Kew branch of Chestertons, says: “Think about your commute. Don’t discount Zone 1, as there are still a few pockets of great value to be had – Hoxton, Elephant and Castle, Vauxhall or Bermondsey, for instance, are all in or within walking distance of Zone 1 stations.
“If you are planning to look for value further out, look for an up-and-coming property hotspot such as Brentford, which is undergoing transformative regeneration with lots of new homes being built, and which is exceptionally well connected to Waterloo and the City, Heathrow and the M4 for weekend getaways. Think about what works for you, but also what will work for prospective buyers viewing your home in five or ten years’ time. Big regeneration projects or major new transport links such as those in Tottenham Hale, Croydon or Old Oak Common will lift house prices steadily in the run up to and the months and years after completion, so always try to factor these projects in and get ahead of the curve if you can.
“If you are planning on living in your new home for more than five years, it’s wise to work out how much you’ll spend on your commute as this figure could be put towards a purchase in an area/zone that you may have discounted as being too expensive. Such calculations can be alarming and figures can easily tot up to thousands of pounds a year. Don’t forget the time your commute takes could be better spent with your loved one!”
What to consider when choosing a mortgage
“First up, speak with a mortgage advisor and do your research so you know exactly how much you can borrow and whether you can afford the monthly payments,” explains Nimish Patel, Sales Manager of the Greenwich branch of Chestertons. “Take financial advice, cut down on unnecessary spending if you haven’t already and save as much as possible.
“Once you’ve figured out a budget that works for you both, discuss the key features you are looking for in a property. If you are interested in a particular location, check online and see how far your budget can go. If it won’t stretch far enough, broaden your area of search.”
Henry Knight, Managing Director at London mortgage broker Springtide Capital, provides his tips on finding the best mortgage for you:
“Having a deposit is only a small part of getting a good deal on your mortgage. Your credit score and the lender’s lending criteria can still delay or halt your application - not ideal if you are looking for properties in popular areas where there is lots of competition and a need to move fast.”
“If you haven’t already, you should also check your credit score by applying for a basic credit report (Experian offers a free snapshot). This will reveal any issues and allow you to correct them so they don’t stop you borrowing. You can maintain a healthy credit score or improve a low score by sticking to the following tips:
• Request any credit errors on your report to be corrected
• Make regular payments (direct debits), don’t miss any payments
• Show that you can manage credit, paying off the same amount (or paying the full balance) every month for at least twelve months
• Close any store cards and credit cards you no longer use
• Try not to max out credit cards and credit limits; use less than 50% of your credit limit
London Help to Buy scheme
To reflect current property prices in London, the Government has increased the upper limit for the equity loan it gives new homebuyers within Greater London from 20% to 40%.
From 1st February, 2016, Barclays, Lloyds, Nationwide and Leeds Building Society all offer London Help to Buy loans on the condition that:
• You contribute at least 5% of the property price as a deposit
• The Government will give you a loan for up to 40% of the price
• You qualify for a mortgage of up to 55% to cover the rest.
The introduction of the scheme will help the capital’s hard pressed households either to move or to get a foot on the housing ladder. However, how much it will help is debatable: the scheme only applies to new build homes up to a maximum value of £600,000, ruling out pretty much everything within Zone 1 and many areas within Zone 2. You will also require a mortgage meaning you will have two loans to repay.
Here’s how it would work with a new-build home worth £600,000:
• Purchase price of a new-build home = £600,000
• Minimum 5% deposit = £30,000
• H2B equity loan (40% of purchase price) = £240,000
• Mortgage loan = £330,000
Finance your wedding
Another recent Chestertons survey revealed the age-old tradition of the father of the bride paying for their daughter’s wedding is unfortunately now a thing of the past, with just 6% of couples having their wedding paid for in full by the bride’s father, compared to around 40% of couples in the fifties. Our research also shows couples are choosing to marry later in life, prioritising investing in property first.
Julia Minton, 27, bucks the trend and chose to marry husband Ed before they bought a house. They live in the Barbican area of London and are now in the process of buying a flat in the city.
“Our main priority was to get married, so the thought of buying a house always came second for us. We were also not in a financial position to buy a house at the time. Buying a house is a very big financial commitment, particularly in London, so we had to wait until time was right. Not buying a house straight away meant we could save for a bigger deposit as soon as we got married.
“I think most people probably prioritise getting a house over getting married. Weddings are extremely expensive and I think people prefer to channel their money into property first.
How we saved on our wedding...
“We didn’t do anything really clever, but we did shop around a lot to get the best price on everything. I also did a lot myself, for example I made our table decorations and bought all the alcohol in bulk which we carted it to the venue ourselves. Every little helps with a wedding!”
Meghan Fay, Wedding Planner at Extraordinary Day Events, says:
“There is no denying that weddings can cost a huge amount of money – averaging £20,500 – however there are three tips that truly can save couples thousands of pounds:
• First, couples can create a wedding website which is free or low cost to build and reduces the amount of stationery that needs to be printed. Information such as accommodation and travel logistics, confirmation of attendance etc can be put on the website rather than printed and posted.
• Second, finding a spectacular venue that has beautiful chairs, crockery, cutlery and glassware can greatly reduce rental costs.
• Finally, switch Champagne for a cheaper and often tastier alternative such as Prosecco, or just dispense with the bubbles altogether and serve wine to your guests to raise in toasts!
“Every couple has a budget, and whether it is six figures or low five figures, it is always about finding the best value for the money they have to make their own wedding day amazing. Couples tend to work in two different ways. About 50% of couples have a very specific budget and we stick to that. The other half have a vision for their wedding day but no idea how much it costs. For those couples, the first thing we do is create an estimated budget which will match their vision. If the agreed budget and vision match, we begin planning! If not, we discuss their priorities to find ways to decrease wedding costs but still plan a wonderful wedding.
“I have found that a lot of couples are usually getting married, buying a new house, and even changing jobs all at the same time. It seems that when a couple decides to get married, they are truly ready to plant roots and they look for their dream home and job all at the same time. Also, couples don’t seem scared to take on everything at once although this can lead to a lot of stress!”
Helen Davies, from The Wedding Concierge, www.wedding-concierge.com, says:
“In terms of a choosing a house over wedding, without exception, every single one of my customers have chosen to buy a house and furnish their home before getting married. However, here are some top tips for how brides and grooms-to-be can cut costs during their wedding planning, so they might have both.
“The key to managing a wedding budget effectively is to prioritise. Identify those things which are of vital importance to you and are the things you absolutely cannot live without and focus on finding quality suppliers who offer and excellent service and great value for money. This way, you might be able to achieve savings which you can squirrel away and spend on the less important things, as your budget allows.”