Eight top tips for first-time buy­ers

It’s a huge, ex­pen­sive step but can be done - so soak up these ex­pert tips

West Sussex Gazette - - PROPERTY NEWS -

This year is ex­pected to be a par­tic­u­larly un­cer­tain one for the hous­ing mar­ket, which may be mak­ing first­time buy­ers feel some­what ner­vous. How­ever, some re­cent fig­ures may of­fer some re­as­sur­ance for those try­ing to make the jump onto the prop­erty lad­der.

Re­search from York­shire Build­ing So­ci­ety sug­gests the num­ber of first-time buy­ers get­ting on the prop­erty lad­der with a mort­gage in the last year, was at its high­est level since 2006. Across the UK, 367,038 first-time buy­ers se­cured mortgages in 2018, up from 362,800 in 2017, the anal­y­sis sug­gests.

There are also some steps first-time buy­ers could take, which may boost their chances of bag­ging a prop­erty. “Buy­ing a first home can be as daunt­ing as it is ex­cit­ing, but there are a num­ber of sim­ple steps peo­ple can take to pre­pare them­selves and make the process as smooth as pos­si­ble,” says Chrysan­thy Pispi­nis of Post Of­fice Money.

Here are Post Of­fice Money’s eight top tips for get­ting on the prop­erty lad­der...

1. Set a sav­ings goal

Three-quar­ters (75%) say that sav­ing for a de­posit is the big­gest hur­dle to home own­er­ship, with first-time buy­ers spend­ing four years ad­just­ing their life­style to save for their starter home, ac­cord­ing to a sur­vey of peo­ple who re­cently got on the prop­erty lad­der. So set­ting a sav­ings tar­get early is im­por­tant to keep­ing you fo­cused and on track.

2. Fac­tor in the ad­di­tional costs of mov­ing

Aspir­ing home­own­ers must not for­get ad­di­tional costs as­so­ci­ated with buy­ing a home, such as re­moval firms, es­tate agent fees and sur­vey­ors. It’s im­por­tant to con­sider these costs in ad­vance and save lit­tle and of­ten.

3. Take time to talk

Par­ents - as the ‘bank of mum and dad’ - are play­ing an in­creas­ingly im­por­tant role help­ing many first-time buy­ers onto the prop­erty lad­der, loan­ing on av­er­age £24,347, ac­cord­ing to Post Of­fice Money. But of the one in six first-time buy­ers fund­ing their home pur­chase from a parental loan, 87% have no proper agree­ment in place, its re­search also found.

There­fore, it’s im­por­tant ev­ery­one in­volved is clear about the na­ture of their agree­ment, so that ev­ery­one’s ex­pec­ta­tions are aligned. This in­cludes mak­ing it clear whether the money is a gift or a loan that needs to be paid back. Post Of­fice Money has a ‘bank of mum and dad con­ver­sa­tion guide’, which could help with such con­ver­sa­tions. (postof­fice.co.uk/dam/ jcr:93ea6a47-6444-4ac88a22-c091054a35­41/Mortgages-Ad­vice-Doc.pdf )

4. Cal­cu­late how much you can af­ford to bor­row

Once your sav­ings pot is up and run­ning, con­sider us­ing an on­line af­ford­abil­ity cal­cu­la­tor to get an idea of how much you’ll be able to bor­row based on your in­come and out­go­ings. Although this should be used as a guide, the in­for­ma­tion will help you fo­cus on prop­er­ties that are within your price range.

5. Know the (credit) score

Be­fore get­ting a mort­gage, you will be credit checked, so now’s the time to check your own credit re­port and en­sure all the in­for­ma­tion it con­tains is ac­cu­rate and up-to-date. A good credit score can be the de­cid­ing fac­tor in not only get­ting ap­proved for a mort­gage, but also the rate you are of­fered. Plan now to start pay­ing down any out­stand­ing debt, be sure not to miss any agreed pay­ments on util­ity bills or mo­bile phone bills, and try to make more than the min­i­mum re­pay­ment in the six months be­fore your mort­gage ap­pli­ca­tion.

6. Find the right mort­gage for you

There are lots of mortgages out there aimed specif­i­cally at first-time buy­ers, in­clud­ing some very in­no­va­tive deals.

7. Re­search af­ford­abil­ity hotspots

You may have your heart set on a pop­u­lar area - but so will many other buy­ers.

On av­er­age, new buy­ers will end up mov­ing 5.2 miles away from where they orig­i­nally in­tended. Con­sider widen­ing the net to make your bud­get go fur­ther, so you can buy more bricks and mor­tar for your money. You could try search­ing in up-and-com­ing ar­eas, which may be­come fu­ture prop­erty hotspots, rather than places where prop­erty prices have al­ready in­creased by a lot.

8. Know the lo­cal rate of sale

On av­er­age, it takes 102 days for a prop­erty to sell in the UK. Un­der­stand­ing the rate at which prop­erty sells in the area you’re look­ing to buy in can po­ten­tially help when mak­ing buy­ing de­ci­sions.

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