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Our Top Tips for First Time Buyers

Fact One

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.

Top Tip:

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.

first time buyers
first time buyers
Fact Two

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.

Top Tip:

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.

first time buyers
Fact Two

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.

Top Tip:

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.

Fact Three

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.

Top Tip:

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.

OR

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.

first time buyers
parents helping first time buyers
Fact Four

Parents in the UK are spending £6.5bn a year to help their children get a foot on the property ladder, up from £5bn last year. This makes them the equivalent of the 9th biggest mortgage lender in the country. The average parental contribution for home buyers this year will be £18,000, down 17% from last year's £21,600, according to Legal & General (L&G)

Top Tip:

Parents may well find that due to the economy tightening, their lack of disposable income, will mean their ability to help could be restricted, unless they were to unlock value from their own property.

Try to remain independent and avoid co-dependence when buying a property. How? A. Start saving as soon as you can and whilst your own commitments are low. B. Use the tools aforementioned and keep your credit score in check!

parents helping first time buyers
Fact Four

Parents in the UK are spending £6.5bn a year to help their children get a foot on the property ladder, up from £5bn last year. This makes them the equivalent of the 9th biggest mortgage lender in the country. The average parental contribution for home buyers this year will be £18,000, down 17% from last year's £21,600, according to Legal & General (L&G)

Top Tip:

Parents may well find that due to the economy tightening, their lack of disposable income, will mean their ability to help could be restricted, unless they were to unlock value from their own property.

Try to remain independent and avoid co-dependence when buying a property. How? A. Start saving as soon as you can and whilst your own commitments are low. B. Use the tools aforementioned and keep your credit score in check!

Info

Your home may be repossessed if you do not keep up repayments on your mortgage.
first time buyers

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Future Life Capital is a trading style of Flamingo Capital Limited. © 2018
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Future Life Capital is a trading style of
Flamingo Capital Limited. © 2018