For first time buyers, getting onto the property ladder may seem a daunting process, but there’s more help available than you might think.
With supply and demand at an imbalance, the average UK house price has been pushed beyond the reach of many first-time buyers.
August data from Land Registry shows an annual price increase of 8.4%, taking the value of the average UK property to £218,964. When you consider that first-time buyers would typically put down around 20% against their first home, it’s no wonder finding a sufficient deposit is becoming increasingly difficult – especially if you are currently renting.
Help is at hand
A report from Which? shows that just over half of first-time buyers (52%) had to rely on financial support from a parent or family member in order to purchase their home. This ‘bank of mum and dad’ has been a useful financial foot-up for many.
If you’re not able to put down a large deposit you may be able to find a mortgage rate of 90% or 95% – provided you can meet the lender’s affordability criteria.
Although the Help to Buy: mortgage guarantee scheme came to an end in December 2016, the Help to Buy: Equity Loan is still available. Here, the Government lends you up to 20% of the cost of your home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest.
Equity loans are available to first-time buyers as well as homeowners looking to move, provided it’s for a new-build worth less than £600,000.
The Help to Buy: ISA will help you boost your savings by 25%. For every £200 you save you receive a government bonus of £50. The maximum government bonus you can receive is £3,000.
Sound mortgage advice can take the complexities out of the home-buying process and maximise your chances of getting an affordable mortgage.