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Our Top Tips for First Time Buyers
In 1960 the average First Time Buyer was only 23 years old and paid a deposit of £595 (equivalent to £12,738). To save such deposit it took 2 years and 1 month. Today the average First Time Buyer is 30 plus and pay a deposit of £20,622, with a saving time of 5 years and 1 month.
Although, the statistics above may stunt ones ambition to ever buy a home, there are many positive developments in the way of help.
Do you know you can now get a mortgage with just a 5% deposit? Or that you can increase your maximum affordability with the new Help to Buy Equity Loan? AND by saving your money in a Lifetime ISA (launched in April 2017), the value will be increased by 25% each year?
These aids make what seems impossible, entirely possible.
1/5 of First Time Buyers are single compared with just 3% in the 1960s, 84% married and 13% in a relationship. Being a single and First Time Buyer is difficult but not unheard of.
Consider Tenancy in common. If you co-own a property as tenants in common, each co-owner owns a specific share of the property. This is typically a 50% share each, however it is possible to hold unequal shares.
Alternatively, Shared Ownership, you buy a proportion of the property and pay rent on the remainder, typically to a local authority or housing association.
The cost of buying includes more than just the price of the property and consequent mortgage there are legal fees, valuation fees, stamp duty etc.
Get in whilst it’s hot! In November 2017 stamp duty for first time buyers was abolished on properties purchased of up to £300,000.
The first £300,000 of a property of a purchase price of up to £500,000, the difference charged at 5%. However, if the property purchase is over £500,000 stamp duty is paid in accordance with the normal rates.
Tax Relief at its finest.
Nevertheless, some mortgage products include free valuations and/or free legals so it is important to make sure you know exactly what the contract entails and what incentives are offered.