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Support for first time buyers

View profile for Kimberley Parr
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Clear communication makes moving house a breeze - Gemmas Story

With the cost of living increase being at an all-time high (at its highest rate in 40 years) stepping on the property ladder as a first time buyer may seem more daunting than ever.

For many first buyers, it is possible they will pay less in monthly mortgage payments than they currently pay in rent to their landlord.

It is therefore vital to keep the property market moving and accessible to first time buyers. First time buyers should not be deterred by the increase in inflation and should still aim to get a step on the ladder as soon as they possibly can.

At Stephensons we fully support home ownership and first time buyers.

Savings can be made to assist and facilitate the purchase of your first home. Being in the knowledge of them from the outset is important. Purchasers can then make plans early on and make informed decisions going forward.

Where can first time buyers make savings?

Lifetime ISA accounts  

You can open and use a life time ISA (individual savings accounts) to buy your first home. You must be 18 years of age and under 40 to open a lifetime ISA account.

You can save up to £4000 each year until you are 50 years old

You must make your first deposit into the account before you turn 40.

The government will add a 25% bonus to your savings, up to the maximum of £1000 per year. This is a considerable benefit and top up to funds first time buyers will need to save to raise their deposit for their intended new home. It is advisable to seek the full benefit of this type of account and the maximum cash incentive to open this type of savings account early on in to your saving journey.

Those aged 18, whom may live with parents that may not wish to leave their family homes so early on, should still consider opening a LISA account to take advantage of the government financial top up. It really will assist financially at a later date. A helping hand and uplift on existing savings that should be taken advantage of.

Full details of the scheme and any limitations can be found on the governments website.

Help to buy ISA accounts

For those with a help to buy ISA account, you can still contribute into this type of account until November 2029 and a 25% top bonus sum can be claimed until November 2030.

This type of account is no longer on the market and has been replaced with the Lifetime ISA account.

As a reminder, if you have one of these accounts, it is advisable to keep it and continue depositing savings into the account until you have reached the maximum saving limit of £12,000.

Savings of £12,000.00 would see a bonus return of £3000.

Full details of this scheme and its terms can be found on the governments website.

Mortgages and brokers (points to note)

Mortgage affordability rules (created in 2014) have recently been scrapped by the Bank of England.

This is deemed to be a positive move in the right direction and may well assist first time buyers. Many mainstream mortgage lenders have already altered their affordability calculators and criteria due to the rising rate of the cost of living. Many mortgage lenders are allowing for the rate of inflation and making allowances where needed to assist with lending to borrowers.

Mortgage lenders appear to be evolving to try and meet the current financial climate we find ourselves in.

The removal of the red tape created by the rules in 2014, will allow more freedom to individual lenders to assess the affordability of their own borrowers / lending.

First time buyers may find it  helpful to seek the advice of an independent mortgage advisor to arrange their mortgage. Mortgage brokers often have links to mortgages and products that are not available to consumers on the open market.

Some mortgage lenders only accept applications via a mortgage intermediary. Having a mortgage advisor can aid a smooth and quick application and can relieve some of the stresses over the same.  

The expertise of a mortgage broker may make the application process less daunting and more informative for first time buyers. Mortgage brokers will have a wealth of knowledge of each lenders lending criteria, so may well be able to place you quickly with the appropriate lender and product.

Obtaining a mortgage in principal can often be much quicker via a mortgage broker. Most estate agents will want sight of a mortgage in principal before accepting an offer on the property on behalf of the seller.

Not all mortgage advisors and brokers will charge an up front fee for their services. and not all mortgage lenders charge a valuation fee or product fee to first time buyers.

Many lenders will offer incentives to first time buyers. If such fees mentioned are applicable often these can be added to your mortgage loan, meaning no upfront costs need to be paid in this regard.

Stamp duty

If you are a first time buyer no stamp duty is payable on properties up to £300,000 (as at June 2022).

Legal fees

It is important to choose the right solicitor to act in the purchase of your new home at the right agreed fees. One that has experience and understands the concerns that first time buyers may have. First time buyers naturally may have more questions and concerns regarding their potential investment. Some buyers may well be nervous as to the process and commitment of buying their own home. At Stephensons we are here to help and guide all buyers through the legal process of buying a property patiently and with understanding.

Our conveyancing department are award winning and have strong highly rated client feedback and we aim to guide you through the process and limit any stress and anxiety you may feel. Upon instruction, you will have direct contact with your conveyancer and their assistant colleagues.

At Stephensons we are truly committed to providing affordable legal services to first time buyers to support the purchase of their very first home. We offer a discounts to all first time buyers, regardless of the type of purchase work you intended to instruct us on.

Our conveyancing new business team can offer initial guidance on matters and provide you with a discounted quotation of costs, for you to then consider. When contacting the team for a quote, please make the team member aware of that you are a first time buyer so we can ensure the correct quotation of costs is provided. Call us on 0161 696 6187. Alternatively you can use our online quote calculator to get an idea of your legal fees and one of our conveyancing specialists will call to discuss this with you.