Navigating the Options for First-Time Buyers.
Navigating your way onto the property market can seem daunting for first-time buyers. Having the right income, a good credit score and a decent deposit ratio can feel like a never-ending circle of hoops to jump through.
The Government, however, has been putting several schemes in place to enable the process and make it more affordable. Help-to-Buy and Shared Ownership initiatives can provide a ladder into owning your own home. At the same time, new homes are being built at the fastest rate seen in the last decade following an ambitious government target of 300,000 new homes each year until 2020.
Recent worries over a decline in house price growth is also positive news for those looking to buy their first home. Although growth can vary from area to area, by and large, a slowdown will mean lenders are looking at new and attractive ways to encourage people to buy. First-time buyers are key to this success, after all, they have no property to sell and so will be able to move quickly given the right package.
Deals from lenders have also improved. Ten years ago, just three mortgage lenders offered packages with a 5% deposit. In April this year, according to Moneyfacts April 2019 release, there were 60 lenders offering packages with a 5% deposit.
The same source also stated that although packages with a lower deposit may have higher percentage rates, the average two to five-year fixed rate deal rate has been dropping year on year, now coming out at around 3.28% and 3.73% respectively.
Figures in from UK Finance in March highlighted the average deposit figure for first-time buyers to be 24%, giving a loan-to-value (LTV) rate of 76%. Many will have taken advantage of Help-to-Buy schemes available with new build properties and saved a 5% deposit then utilised a Government loan to top up their deposit and access better mortgage deals. Others may have simply saved for that deposit or approached the kindly Bank of Mum and Dad. Whichever way, deposits are being secured and there are many more mortgage products available for first-time buyers.
If navigating your way through the options seems confusing, or if you would just like to chat through your options with one of our advisers to ensure you’re accessing the information you need in order to secure the right deal for you, then contact us for a chat or book a suitable time for us to be able to contact you.
Your home may be repossessed if you do not keep up repayments on your mortgage.