The ultimate guide for first-time buyers￼
We demystify the process of buying your first property and all the obstacles that first-time buyers should avoid.
Are you thinking of getting on to the property ladder? If yes, you are in the right place. For a long time, it’s been a tradition for Brits to buy a property as soon as they have the required savings. Evidently, renting may not be considered a high-yield investment. In fact, depending on one’s lifestyle and personal circumstances, it may be more efficient to buy a property and pay your mortgage instead of a monthly rental.
First-time buyer: the term explained
Generally speaking, people who have never owned a property anywhere in the world are regarded as bona fide first-time buyers. But why does this matter? If you fall into this category, the main advantage for first-time buyers is that they get to pay less stamp duty, ultimately saving money during this strenuous process. Stamp duty is a tax imposed by the government in England or Northern Ireland on property or land purchases. There is no set amount; stamp duty is calculated on the part of the property price falling in each band.
What sum are you entitled to for your first mortgage?
Factoring in data from our clients over the past three years, borrowers can get mortgages up to 4.5 times their income with a repayment rate of around 3,5% at the time of writing this article. These are dependent on your credit score, employment, savings, and several other factors. We would advise that you get in touch with a mortgage broker to get more details on mortgages and rates. To purchase your first home, you will need a deposit of at least 10% of your property purchase price and a good credit score. There are also some government schemes available allowing you to put down just a 5% deposit. Your mortgage value will help you set the budget for your first home purchase.
Deciding on the area
Once all the above requirements are in place, you’re ready to start your property search. As we’ve mentioned in our renting guide, you will need to dedicate a lot of time to select the right area. Some key considerations include crime levels, transport links, schools, and development applications, just to name a few. Being good on paper may not be enough, though. You are encouraged to spend time in the area, during daytime and nighttime, to experience the local vibe, the community, and the overall dynamics.
Kicking off the property search
Once you have a clear idea of the area you’re keen on, you can start to search for properties on websites such as Rightmove and Zoopla. We would highly recommend that you get in touch with local estate agencies so you can stay in the know when new properties pop on the market. If you’re interested in a specific property on the market, it’s more efficient to pick up the phone and call the real estate agency rather than email them. It goes without saying that viewing the property in person is paramount. Virtual viewings can easily hide flaws and small details that can impact your decision inadvertently.
Negotiating the price of your dream home
After you’ve inspected and selected your ideal property, it’s time to place an offer. At this stage, you will be dealing with experienced and highly-skilled negotiators representing the real estate agencies. To secure a good price you need a strategy, information, and, quite often, patience. Effective negotiations require extensive market insight and long experience working with estate agencies and negotiators.
Placing an offer for your first home
Once you’re happy with the price of the property, you can put an offer. Further, you will need to submit a bank statement with your deposit, your mortgage in principal (you can get one from your broker or your bank), and your solicitor’s details. Please note that it’s necessary to hire an effective solicitor (not necessarily an expensive one) to handle the legal and administrative work associated with buying property.
Buying your first property is a big step and a substantial commitment that will affect your everyday life for years to come. So, you can rest assured that you’re making the most out of your mortgage and savings, you can work with an experienced property advisor who will alleviate some of the burdens from the initial stages of this complex process. Xenofon Property Find is a trusted property finder with over 10 years of experience working with first-time buyers to help secure their dream home without the hassle. To learn more about our services, get in touch today.