It is possible to be a first time buyer inthe UK. Numbers are at their highest since 2007! Here’s how
to get on the ladder as painlessly as possible.
The Halifax have announced that the number of first time buyers is at its highest since 2007. They estimate that 326,500 people bought their first property in 2014, a rise of 22%.
They believe the result of this was from cheap mortgage rates and government schemes such as Help To Buy which only requires small deposits.
Help To Buy enables people to put down a deposit as low as 5%of the purchase price of a property and about 80% of those using the scheme are buying their first property. http://www.helptobuy.org.uk/
Also mortgage rates fell so it meant that a lower proportion of a person’s income needed to be spent on the mortgage than in previous years. Halifax stated that on average a person uses 32% of their income to pay their mortgage compared with 50% in 2007.
“Improving economic conditions and rising employment levels have boosted confidence among those thinking about getting on to the housing ladder for the first time,” said Craig McKinlay, mortgages director at the Halifax.
House prices have risen and the average first time buyer spent £171,870 in 2014 which is a 9% rise on 2013.
To work out how much you could afford, check out this house price calculator: http://www.bbc.co.uk/news/business-23234033
Some tips if you are a first time buyer:
It is tough to get on the property ladder for the first time, in the present economic climate, there is a distinct lack of return on savings, a huge chunk of money needed for a deposit, rental costs are absorbing any savings and the housing market is not as busy as it used to be.
However with good preparation it is possible to get there.
- Be realistic. Look at your affordability and be realistic about what you can get and where you can get it. It may not be your dream home, but if it gets you on the ladder, it’s easier next time round.
- Focus. Decide what you need from your first home and go in search of it, don’t wait around for an estate agent to call you.
- Improve your credit score. Try to pay off a credit card each month. Check out a credit agency like Experian to see what your score is and get help with trying to improve it.
- Be an easier customer for an estate agent. They work on behalf of the seller not the buyer, so if you can help them by giving them a clear idea of what you are looking for an doing what you can to make sure the finance is suitably in place, then they are more likely to pick up the phone to you first when an appropriate property comes on the market.
- Make sure you are on the electoral register. It does count on your credit score and the best place for students to register is at their parents address.
- Do spend the money on a good solicitor who can move things swiftly and effectively for you. Also make sure that you get a survey done, there can be many hidden dangers or problems that are unforeseen by the seller which could cost you so much more once you are the owner.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP TO DATE WITH YOUR MORTGAGE REPAYMENTS