According to a Nationwide Building Society Study, the UK’s average house price is again on the rise, in real terms, having peaked in 2007. The average UK house price is now approximately 6 times the average UK salary at about £228,000. Of course, in London and parts of the South East of England, this is much higher.
How then, does a first-time buyer get onto the housing ladder?
Here we make a few suggestions;
Unless you are fortunate enough to have secured a significant deposit, it’s likely that you may need some help scraping together sufficient money to meet a significant deposit. Until recently, this would have been at least 10%, with most lenders not offering a 95% Loan to Value (LTV) option.
In April this year the government introduced a 95% Mortgage Guarantee Scheme. This is a temporary measure introduced by the government in reaction to the lack of 95% mortgages available in the market. The government will provide sufficient guarantees to lenders so that 95% mortgages can be offered again.
Another way to get on the ladder is by participating in the Government’s new Help to Buy Equity Loan Scheme. The scheme, which launched at the end of 2020 is available to first-time buyers only. Applicants must be buying a new property from an approved housebuilder.
Another route to getting on the home owning ladder is to buy just part of a property whilst renting the remainder at an agreed rent. Known as Shared Ownership, this reduces your borrowings and the deposit you need to save. It also enables you to buy more of your home at some time in the future, known as staircasing, or sell the home and use any increase in equity, over time, to use as a deposit for another home.
Guarantor or Family Mortgages remove the need for the buyer to have any deposit at all. Instead, a family member will put a sum of money (for example 10% of the purchase price) into a savings account with your lender. After say 3 years, if all mortgage repayments have been met, the savings are returned, plus interest, to the family member. This is usually only available to first-time buyers and new homes, shared ownership or equity homes and interest-only mortgages are excluded. For more details, click here.
Whatever your circumstances, it’s worth having a chat with us. There are lots of ways first-time buyers are being helped by the government right now.
Related articles:
Download our Free First Time Buyers Guide
Recent posts
Here are the lowest fixed mortgage rates of the week, available to first-time buyers, home movers, buy-to-let, and those remortgaging.
Call us for more information: 01628 507477 or email: team@mortgagerequired.com.
Almost half of young adults are worried about their credit history stopping them from renting or buying a property, according to data from Loqbox
How to add value to your property this summer
12 days ago
Different seasons can have a noticeable effect on property prices.
Research from Zoopla shows that spending out on certain features can fetch up to £29,000 during the summer months.
Monday 22nd June saw Keir Starmer resign as Prime Minister and Labour leader. The resignation does not directly impact mortgage rates, as changes were taking place before this announcement. However, it could influence mortgage rates indirectly through financial markets and future government policies.
Homebuying reform to cut homebuying times by around four weeks, and save first-time buyers around £650, says the government.
Buying your first home is a huge milestone, but it can also be a complex process. There are several factors a first-time buyer should consider before making an offer on a property, including understanding the difference between leasehold and freehold and checking council tax bands.
We’ve detailed some questions you can ask your estate agent to help you make an informed decision.
Signs it's time to remortgage
21 days ago
Remortgaging means switching to a new mortgage deal. This will either be with your current lender or a new one.
Getting advice and moving to a new deal when the time is right can mean lower monthly mortgage payments, better interest rates, or releasing equity from your property.
Here are some signs it may be time to remortgage.
According to Nationwide Building Society’s latest House Price Index, house prices dropped 0.6% month on month in May – the first monthly decline this year.
More information
Trusted by
