First Time Buyers are at a record high

New statistics released from the First Time Buyers 2018 report, produced by Yorkshire Building Society, have highlighted a significant increase in the level of First Time Buyers (FTBs).  Genni Cooper, Residential Conveyancing Solicitor, here reviews the report and explains the different options available for FTBs when it comes to purchasing a home. 

The report confirms that 367,038 mortgages were taken up by first time buyers in 2018; an increase on the 362,800 mortgages in 2017 and double that of 2008.  With this number, FTBs with a mortgage, now make up 50% of house purchases, indicating that purchasing a first property is a priority to the younger generation.

Government support for first time buyers

A number of schemes have been put in place over the last few years in order to assist FTBs.  It can be assumed that these are paying off with the increase in the number of FTBs purchasing.

These schemes include:

• FTB Stamp Duty Land Tax Relief – Introduced in 2017 and effective from the 22^nd November 2017, this relief provides that no stamp duty is payable (if the property is under £300,000) or a reduced amount is payable (if the property is under £500,000 but over £300,000 – 5% Stamp Duty Land Tax is payable) for a first time buyer if a number of conditions are met, including:
  • The property is a single dwelling
  • The property is under £500,000
  • All purchasers are individuals (i.e. not a company)
  • All purchasers are FTBs (none can have owned another property in the world)
  • You will occupy the property as your main residence
• Help to Buy Equity Loans – The Government will lend you up to 20% of the cost of a newly built property.  This means that a FTB would only need a 5% cash deposit and a 75% mortgage to make up the rest.
• 95% mortgages – These are available through some mortgage lenders and mean that a FTB is only required to produce a 5% deposit for a purchase (although not available to all FTBs).
• Incentives from Developers – for example, the developer offering to pay stamp duty (if applicable) or adding in flooring or upgrades for no added cost.

Genni explains, “A significant stumbling point however, is the level of deposit required in order to purchase a property.  This is due to a number of factors, including increasing house prices.  Many FTBs now need help from a family member or need to save for a number of years before they can consider actually purchasing.”

How can I save for a deposit for a home?

Even with this stumbling block, FTBs are not being deterred and are still looking to make this commitment.  In an article recently released by reallymoving.com, they have highlighted some helpful tips on how to save for that all important deposit.

“While giving up on those luxury items such as your daily coffee or gym membership will add up, they are not quite enough to save the full deposit needed,” continues Genni.  “Instead noticeable changes to your lifestyle are required, for example, moving back with your parents or looking at decreasing your monthly rental costs.”

Looking at regular monthly savings is another useful way to build that deposit.   Many banks now offer Help to Buy ISA’s, which offers a bonus incentive for regular savings.  There are also a number of Apps which help you monitor spending and savings.

What costs do I need to consider when buying a property?

It is important to remember that it is not just the deposit that is required to complete a property purchase, but surveyor’s fees, solicitor’s fees and other disbursements.  By knowing these costs, you will be able to create a sensible target and budget.   For more information on our fees, visit our online Conveyancing Estimate Calculator.

Genni concludes, “This is a positive sign that FTBs are as keen as ever to secure their first property.  We pride ourselves on our exceptional customer service and understand that purchasing a first property can be daunting.  We are therefore here to make the process as easy as possible and by using our experienced conveyancing team, that is one aspect of the process which can be smooth and as pain free as possible.”

If you are a first time buyer looking to buy your first home, you can contact Genni or the Residential Conveyancing team on 01329 222099 or email gennicooper@warnergoodman.co.uk.  

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.