Getting onto the property ladder for first time buyers can be a daunting task. From saving a large deposit to finding a new home and then having to deal with estate agents, mortgage brokers and solicitors are a few of the challenges that need to be overcome.
The good news however, is that there are a number of schemes and options available to help first time buyers get onto the first rung of the property ladder. It is worth exploring these even if you are not considering buying your first home yet: you might find you can do that sooner than expected!
Help to Buy & Lifetime ISAs
These government backed ISA schemes allow you to save money and the government pays a bonus of 25% on the amount you save. This boost can help you buy your new home that much sooner. Various banks and building societies offer these ISAs and you can speak with them to discuss the eligibility requirements and benefits.
Reduced Deposit
Traditionally people think a 10% deposit is needed to buy a property. However, many mortgage lenders offer mortgages which require only a 5% deposit. So you could find you already have already saved enough to start house hunting! Speak with a reputable mortgage broker about the mortgages available.
Shared Ownership Homes
If you can’t afford to buy a property there are some schemes where you buy a share of your home and pay rent on the share you are not buying. These are called shared ownership schemes and are offered mostly by housing associations which are usually private non-profit making organisations. If you are able to buy a share in a property, of say 40% it would mean you require a smaller deposit and lower mortgage to buy your home. You will then pay rent on the remaining share which will be owned by the housing association. Many of these schemes allow you to buy additional shares until eventually you own 100% and become the outright owner! Speak with your local housing association directly (or go through your local council) and Help To Buy agent for the available schemes in your area.
Help To Buy Equity Loans
The government provides loans of up to 40% of the value of your new home on some new build developments. These loans are interest free for a period of 5 years and can be paid back at any time. These allow you to buy sooner, again with a smaller deposit and lower mortgage from traditional mortgage companies. Speak with local developers to see if they offer these schemes and a reputable mortgage broker to advise on the benefits for you.
Stamp Duty Land Tax (SDLT) Relief
Anyone who has never owned a residential property before (anywhere in the world) may be eligible for first time buyer’s relief. This relief means an eligible purchaser may pay no stamp duty for any property purchase up to £300,000 in value, and a reduced rate of stamp duty for any purchase between £300,000 and £500,000.
Conclusion
It is never too early to start thinking about getting onto the property ladder. With preparation and awareness, you might just get a foothold on property ladder much sooner than you first thought!
