More than three in five homeowners were ‘winging it’ when they bought their home, research has revealed

By
Richard Jenkins
Monday, 9th May 2022, 5:47pm
More than three in five homeowners were ‘winging it’ when they bought their home, research has revealed

A study of 2,000 homeowners found 61 per cent were underprepared due to a lack of knowledge about the process.

And 62 per cent were confused by the jargon – with terms like ‘conveyancing’, ‘covenant’, ‘disbursement’ and ‘stamp duty’ among the most baffling phrases.

But 74 per cent of these admitted they are still unsure what some terms mean.

Solicitors were found to be the worst home-buying jargon offenders (52 per cent) followed by estate agents (28 per cent), banks (27 per cent), and mortgage brokers (27 per cent).

The research, commissioned by saving and investing app Moneybox, found 48 per cent of confused homebuyers were left feeling anxious, hoping they’d not missed or misunderstood anything important.

While 47 per cent said it contributed to feeling overwhelmed, with 31 per cent embarrassed at having to ask for terms and phrases to be explained to them.

And 30 per cent were simply frustrated at having to spend time figuring out what was meant.

Following the findings, the brand has created a quiz to help homebuyers test their knowledge of the jargon involved and find out more about it.

Cecilia Mourain, MD of Moneybox Home-buying, said: “When buying a home, many can be left feeling overwhelmed as there is so much to learn throughout the process, especially for first-time buyers.

“The language of home-buying was certainly never taught in schools and so it’s no surprise that many feel as if they are in the deep end as soon as the process gets underway.

“People shouldn’t have to feel like they are ‘winging’ what is one of the most significant financial achievements in life.

“We’re committed to doing all we can to make buying a home easy, from first step to doorstep.

“If you’re thinking of buying in the future, take our home-buying quiz now to see how prepared you are for the journey ahead.”

 

Surprises that lead to regret

The study also found that when buying their first home, 47 per cent felt they had been caught out or surprised by something they now wish they had approached differently at the time.

While four in 10 now feel they were ‘naïve’ about how long the process would take, and 36 per cent had no idea about the order of events when buying a property.

As a result, 28 per cent wish estate agents, solicitors and mortgage advisors had provided more support.

Among those who admitted to ‘winging it’, a third believe they were left out of pocket as a result.

It also emerged 66 per cent of those polled via OnePoll think buying a property is ‘far more complicated than it needs to be’.

Cecilia Mourain, MD of Moneybox Home-buying added: “While a little preparation can go a long way, we know that even the most organised people have found buying a home to be challenging at times.

“Our free mortgage service is here to help make the process of buying a home stress-free, with a dedicated team of expert mortgage brokers and individual case managers on hand to support you throughout.”

To get to grips with the language used during the home-buying process, Moneybox has also created a jargon-buster glossary.

 

Most confusing terms when buying a home according to homeowners

1.            Conveyancing – the legal process of transferring a property or piece of land from one owner to another.

2.            Covenant – a rule which states what can and cannot be done on the land.

3.            Disbursement – the payments or taxes that need to be made to a third party by your solicitor as part of the home buying process.

4.            Stamp Duty – a tax that you have to pay when buying a property in England or Northern Ireland (Known as Land Transaction Tax in Wales and Land and Buildings Transaction Tax in Scotland).

5.            Solicitor searches – enquiries your solicitor makes to find out more information about the property you plan to buy. There are various types of searches that your solicitor will carry out with the local authority and other parties.

6.            Freehold – a type of property ownership, where a person or organisation has outright ownership of a property and the land on which it is built.

7.            Mortgage in principle – an official estimate from a mortgage lender confirming that, in principle, they would lend you a certain amount as a mortgage. A MIP is not a guarantee of a mortgage offer.

8.            Tracker mortgages – a type of variable rate mortgage which “tracks” a base rate – usually the Bank of England’s base rate – meaning repayments could change monthly.

9.            Leasehold – when you buy a leasehold, you own the property, but not the land it’s built on, and only for a certain number of years.

10.          EPC – the Energy Performance Certificates that shows how energy-efficient a property is.

11.          Retention – when the lender holds back some of the funds until you’ve completed essential works.

12.          Equity Loan – an equity loan is a loan for a set amount of money, repaid over a set period of time that uses the equity you have in your home as collateral for the loan.

13.          Standard variable rate (SVR) mortgage – a variable interest rate which is set by the lender, rather than a tracker, which follows the Bank of England’s base rate.

14.          Land Registry – an official organisation that records information on who owns particular land and property.

15.          Affordability Rules – the rules which set out standards that mortgage lenders must meet when assessing affordability.

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© 2022 National World Publishing Ltd.

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