Getting onto the property ladder isn’t easy – with thousands of pounds needed to secure a mortgage deposit and (more often than not) a big chunk of your salary going on rent, financial life for the first-time buyer is tough.
But help is at hand, with a range of government schemes to support those wanting to buy.
And looking at industry figures just released, it’s working.
First-time buyers borrowed more money than ever before to get on the housing ladder last year.
A record £53.6bn of mortgage loans went to new property owners in 2016, a rise of 13.5 per cent compared with 2015 and the highest level since the Council of Mortgage Lenders’ data began in 2006. December’s borrowing of £4.8bn was also a record month for first-time buyers.
According to Situ Homes – the property portal bringing the leading estate agents from across the Midlands together to act as the voice of the regional market – 2017 could see new records set.
“Being a first-time buyer, particularly here in the Midlands where property prices continue to rise with demand outstripping supply, isn’t easy,” Andrew Oulsnam, Chairman of Situ, said.
“But the good news is there are a range of government schemes available to help, particularly for those struggling to find a big enough deposit. Mortgage rates remain at record low-levels too. What’s more, the government has also pledged to increase the number of new homes being built every year, which is great news for everyone.”
So, if you’re planning to make the move into home ownership – here are some top tips from the experts at Situ Homes to help you on your way:
Save, save, save
Money is power when it comes to mortgages and home buying. In most cases you will need a deposit of between 10% and 20%. The more you have, the better the range of mortgages you can access and the better rates of lending you can secure.
It’s that mortgage deposit that causes the biggest headache for first-time buyers. So, do your research and find out about the government’s help schemes. Help to Buy makes buying a new-build home possible with a deposit of just 5%, with the government lending you up to 20% of the property’s value as an equity loan. Then there is the Help to Buy ISA – a type of tax-free savings account aimed specifically at people saving to buy their first home. Shared ownership is a cross between renting and buying, aimed mainly at first-time buyers.
Considered buying with friends or family?
This is becoming more and more popular. You share the deposit, mortgage repayments and maintenance costs. The more people there are on the mortgage, the larger the mortgage you can
also secure. But there are risks – the largest of all being one person’s desire to sell their portion of the house, so make sure you weigh up the pros and cons.
Budget the costs – and then check them again
Make sure you budget for everything – mortgage arrangement and valuation fees, Stamp Duty, solicitors, surveys, removals, buildings insurance, furnishing and decorating – all cost. As a first-time home buyer, the most important thing to bear in mind is whether you can really afford it so a budget before anything else is a must. There are very strict affordability checks when you apply for a mortgage – checks which protect both the mortgage company and the purchaser. Know your finances and your limits and always work within them.
Together, the partners of Situ have 29 offices across Warwickshire, Worcestershire, Staffordshire, the West Midlands and the Cotswolds and head up five of the leading estate agents with a combined 130 years of industry experience.