First-time buyers remain a key part of the homebuying process in the UK. February 13-26 marks First Time Buyers Fortnight, an annual event designed to encourage and inspire young people in particular to get on to the property ladder.
Figures released in January by the Yorkshire Building Society showed a leap in the numbers of first-timers applying for a mortgage. That’s despite the government’s Help-to-Buy Scheme ending in December.
Meanwhile, research by Which? Magazine shows that having a larger deposit can save first-time buyers thousands of pounds in a fixed-rate deal.
The difference between a 5 and 10 percent deposit can be up to £2,500 on a two-year fixed rate, according to Which? research carried out in February 2017.
Add to that the increased number of deals on offer in the mortgage market to those looking to buy their first property and it points the continuing appeal and draw of the UK property market.
If you’re a first-time buyer dipping your toe into the property market for the first time, here are 5 important financial factors to consider:
1. Find your deposit
Unless you are fortunate enough to have the cash to buy outright, you will need a minimum deposit of between 5 and 10 percent to secure a mortgage on your chosen property. The bigger your deposit, obviously, the better. You can save more with the help of a Government-backed help-to-buy ISA. For every £200 you save, the Government will give you another £50. The most you can earn from the help-to-buy ISA is £3,000.
2. Work out your budget
Work out your budget before embarking on a house hunt. Total your monthly income and outgoings, work out your disposable income and ensure you can afford to pay not only the mortgage but also utilities such as council tax, gas, electricity and water. You might also have to factor in management fees in shared properties, such as for garden maintenance.
3. Add up all the fees
Now work out the actual cost of buying a property. Fees can include those for mortgage arrangement and property valuation, surveys, solicitors’ conveyancing and stamp duty if the property is above a certain threshold. Fortunately, with the help of Homeward Legal, you can fix your conveyancing fees in advance so there will no unpleasant surprises when the transaction is complete. And if the sale falls through, our “no sale, no fee” guarantee will ensure you are not out of pocket.
4. Think of all the extra costs
Having found your new home, thoughts must turn to how you will furnish the place. Do you need to budget for a removal firm to move you from your old home to your new place? Shop around for deals on removals and look for a company who will be flexible on moving dates just in case of any last-minute hiccups in the exchange of contracts.
5. Expect the unexpected
Unexpected expenses always crop up so be prepared by keeping some cash aside. What you won’t need to worry about are any unexpected extras with a fixed fee guaranteed by Homeward Legal. The price you are quoted is the price you will pay, detailing all likely additional disbursements and all legal fees for the conveyancing, giving you increased peace of mind while the sales process is underway.
Peace of mind with a fixed rate guaranteed
While First-Time Buyers Fortnight is drawing to a close for another year, the reality is that house–hunting remains an all-year-round activity.
Entering the property market for the first time is an exciting prospect. For increased peace of mind, call Homeward Legal on 0800 038 6699 to get a conveyancing quote or get your instant conveyancing quote here for all purchases, sales, remortgages and equity transfers.
If you’re a first-time buyer, check out Homeward Legal’s comprehensive First-Time Buyers’ Hub where every topic related to purchasing for the very first time is covered in detail.