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First Time Buyer Masterclass

Date Published 13 August 2020

Buying your first home has always been stressful, let alone in the middle of a global pandemic. We at At Home Estate and Letting Agency have teamed up with two local independent experts to put together a First Time Buyers Masterclass to help you through the process.

Mortgage market

A lot of lenders have stopped their 5 and 10% mortgages, with many first time buyers struggling to raise a 15% mortgage. Some lenders are discounting bonuses, overtime, commission, or second jobs which is making affordability harder – especially for first time buyers.

One lender has returned to a 10% mortgage on an unrestricted basis, and as when one leads, the other follow, this should see the opening up of this market. The lenders had been nervous about the state of the market, but as the market has actually been really busy, it should lead to an increase in confidence from the lenders. It will be a surprise to see the 5% mortgages return this year, however.

As the first time buyer market has been affected, this has had a knock on effect on the first time seller market as well. Consequently, the first time seller properties are a fair bit cheaper than before lockdown. If you are able to raise the deposit, it is a great time to buy.

Should I go help-to-buy or resale market?

Help to buy: Equity Loan has the big positive that the Government will lend up to 20% of the cost of your newly built home, which you won't be charged interest on for the first five years of owning your home. However, the downside to new builds are often the higher costs of the property. When you go to upsize in a few years, you could find you have lost a bit of money if the market hasn't risen. In certain areas, there is as much as a 22% premium on help to buy properties. Help to buy is ideal for long term properties which you anticipate living in for upwards of five years. For first time buyers however, it could result in you losing your hard-earned deposit when you move on to the next property. If you can get a mortgage for one, a resale property typically represents better value.

If you are going help to buy, why is it vital to use an independent solicitor?

Quite often, the developers will offer you a fixed price solicitor. However, be cautious of these as they may tie you in to the developers, rather than protecting against any issues that may arise. The independent solicitor will be able to flag any causes of concern, to protect you should any problems crop up regarding your new build.

If the new build has a 10 year guarantee and NHPC licence, why would I need a Surveyor?
The new build flagging survey is actually the most prestigious survey, and they often find up to 300 issues to raise with every new build. This is despite the new build ‘premium'. The survey will give you bargaining power to negotiate either for the niggles to be fixed, or to receive a cashback/ discount to fix the issues yourself upon purchase.

Is it a good time to buy?

When lockdown was first introduced, many estate agents, lenders, surveyors etc were overly pessimistic regarding the outlook for the market. Since then, the market has actually remained strong, busier than anyone expected, with the primary issues revolving around the lack of 5% mortgages.

If the time is right for you personally, it remains a good time to buy, especially with the removal of stamp duty.

Why speak to a mortgage adviser?

Whilst a bank can you offer a free consultation, they can only tell you about their services. An online broker can only tell you about different mortgages and rates available. On the other hand, an adviser will tailor their advice to your situation to help you specifically.

Top tips for first time buyers before they apply for their mortgage

1) Register to be on the electoral roll
2) Sign up with a credit rating agency, to check you don't have any missed payments.

If you are ready to take your first step on to the property ladder, come and speak to;

At Home Estate and Lettings Agency –

Meaby and Co Solicitors

Nuven Surveyors