The plight of first time buyers is back in the news as the Government has launched yet another new initiative aimed at helping them get onto the ladder.
The Prime Minister David Cameron has announced a scheme that is aimed at helping around 100,000 first time buyers around the country who aren’t able to raise the 20% deposit typically required to buy a home.
Under the plans, the home buyers would be able to secure a mortgage on a newly built home with a 5% deposit. It is also hoped this will kick-start the housing market and help developers to get stagnant sites moving again.
With this in mind, I have put together a five-point plan for first time buyers to help make the move a little smoother:
1: Perhaps before you set your heart on a home, speak to an independent financial adviser (IFA) to find out how much you may be able to borrow. You don’t want to find your perfect house only to be unable to borrow the required amount.
2: Work out a plan of all the costs you will need to pay. On top of a mortgage payment every month, you will need to pay bills such as gas and electricity, buildings insurance, council tax, TV licence and water. If you’re buying a flat you may also have a service charge to consider each month.
3: Shop around to find the best deal. Find out which developers in your area are offering Government-backed deposit schemes which could help you get a foot on the ladder. You could also consider repossessions and properties sold at auction. While this is a riskier option as you cannot get a survey done before you buy, they are often cheaper.
4: Alternatively, speak to the Bank of Mum and Dad. Parents often help their children buy their first home and there are various legal issues to consider before going ahead.
5: Once you have found your home and had an offer accepted, select a solicitor to deal with the conveyancing. Many first time buyers may find moving a daunting experience. Try to minimise this stress by finding a good solicitor who will keep you up to date, move quickly and who is upfront about their fees. Look for a solicitor who has the new Conveyancing Quality Standard from the Law Society.
For a limited period we are delighted to offer a 10% discount on legal fees for first time buyer readers of The Observer. Contact us on 08442 451 000 for further details or to obtain a quote.
By residential conveyancing solicitor and Stephensons’ Partner, Tom Bridge