Eight key things to think about if you are buying a home in 2025: Paperwork, credit checks and more

With a bumper crop of housing transactions currently going through the pipeline, experts explain some factors for house hunters to consider

The start of the year is often a time when many potential home buyers decide it’s time to finally put their plans into action. According to recent research from Zoopla, there’s a bumper of home transactions set to complete in the early months of 2025.

The property website saw the biggest pipeline of sales at the end of the year for four years in 2024. This could be a reflection of buyers and sellers returning to the market, having previously put off some moving decisions in the face of higher mortgage rates.

While there were initially expectations that interest rates - and thus repayment amounts on mortgages - could come down this year, January has seen financial pressures and government borrowing rates mean the Bank of England are more likely to hold rates for now to prevent another rise in inflation.

But when you’re starting out on looking for a new property, it can be easy to overlook some things that can be stumbling blocks later on.

Preparing in advance could help to ensure smoother sailing for some would-be buyers, so here are some expert tips to help house hunters navigate potential obstacles along the way:

1. Get your paperwork together

Self-employed borrowers may need to make particular plans when showing proof of income.

Ryan Etchells, chief operations officer at specialist mortgage lender Together, says high street lenders may want to see proof of income running back over the long-term, adding: “This can prove tricky for people who, for example, may have just started up their own business or for people such as freelancers, company directors or consultants, whose income may not be paid into their bank account on the exact same day every month.”

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As well as other documents, borrowers may also need to show their operating and travel costs as well as spending on office rental and supplies, he says. “Having all your documents ready will help with a smooth and stress-free mortgage application process,” Etchells adds.

2. Have you checked your credit records?

Remember that the major credit checking companies might hold information about you slightly differently, so it could be worth looking at the information held by more than just one provider.

Even if you have a “blip” on your records, Etchells says there are specialist lenders out there who may consider applicants.

He continues: “If you are rejected, it is not necessarily the end of the road for your mortgage application. You need to get (a) further understanding of your credit status and see what measures you can take to improve your rating before re-applying.”

There are also options for people with very little credit history, such as expats who may have lived abroad and recently moved back, he says.

Older borrowers will need to consider how changes in their income, if they decide to go part-time, and their retirement savings could be impacted by their mortgage payments.

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Some lenders may stretch the length of the mortgage into retirement age, says Etchells.

Some lenders will offer products specifically aimed at older borrowers, such as retirement interest-only (RIO) mortgages and lifetime mortgages.

Some options for older borrowers may affect the amount of inheritance left behind and there may also be other alternatives to consider rather than borrowing, such as downsizing into a smaller property.

4. Remember there is more than one route onto the property ladder

For some aspiring homeowners, 2025 will mark their first step onto the property ladder.

However, a stamp duty discount will become less generous from April, meaning that for first-time buyers purchasing a property in England and Northern Ireland, the “nil rate” band will reduce from £425,000 to £300,000.

Etchells highlights initiatives to help first-time buyers onto the property ladder, such as shared ownership schemes.

There are also some lenders who will offer low or no-deposit mortgages to first-time buyers, such as Skipton Building Society’s “track record” mortgage.

Other products available include Barclays’ “family springboard” mortgage, where family or friends put up savings as security.

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5. Do you know how much you can afford?

Ben Thompson, deputy CEO at Mortgage Advice Bureau, says that arranging a mortgage in principle will give buyers who are actively house hunting an indication of what they may potentially be able to borrow from a lender, enabling them to be realistic in terms of budget.

An agreement in principle could help to show that house hunters are “serious buyers” and on a good footing to be able to put in an offer.

Bear in mind though that a lender may change their decision or offer different terms when a full mortgage application is made.

6. Be prepared for hidden costs

Costs such as removal fees, decorating or reconfiguring your new property so it’s right for you, as well as legal fees, can soon add up.

“Making use of savings accounts might be worthwhile, as you can earn interest on this and save a little extra,” says Thompson.

7. Have you factored in insurance?

As well as the cost of insuring the property itself, Thompson says some borrowers may want to consider cover in case anything happened that stopped them from working.

He says: “Should anything happen that would prevent you from working, having the appropriate cover in place would allow you to keep paying the mortgage.”

8. Could you broaden your horizons?

House hunters may have their heart set on a particular area, or perhaps dream of living in a particular type of property. But in doing so, they may be overlooking a home which could, in fact, be “the one”.

Thompson suggests that buyers take inspiration from property shows where house hunters end up loving the curveball property, which didn’t exactly fit their initial specifications but turned out to be what they wanted.

Casting your net wider could make it easier to find a property within your budget. Thompson says that broadening your horizons “could help you uncover an area or property that you love and would otherwise not have looked at”.