For many people, owning their own home is the ultimate goal to aspire to. However, and understandably so, rising property prices have put many people off – until now perhaps.
Figures from the Office for National Statistics have shown that the average house price growth in the UK is starting to slow down. The April 2015 House Price Index has indicated that the average price of a house increased by 5.5% in the year from April 2014. This rise was slower than the 9.6% average rise between the months of March 2014 and 2015. Those who are looking at taking a step towards buying their first home will be particularly cheered by this news, as it shows how average house price growth slowed across the majority of the country, particularly in London, where the average price increase dropped below the UK average for the first time in nine years.
While house prices in the UK are still far from ideal, the slowing of the average price growth may prompt a lot of first-time buyers to kickstart their efforts to get on the first rung of the property ladder. If you’re one of these fresh faced first-timers, then read on for our six tips on how to survive the house buying process for the very first time.
Save, save, save
All first-time buyers will already know that this is the main step towards securing the ultimate goal of owning your very own home, but we’re here just to re-iterate its importance. Of course, there’s the deposit for your house, but don’t forget about the other often hidden costs of becoming a homeowner. There will be conveyancing fees for the solicitors who sort out all the legal paperwork, paying for a survey (absolutely essential, to ensure the house of your dreams isn’t falling apart) and possibly stamp duty, if you’re buying a house that costs more than £125,000, and this list isn’t exhaustive! Very rarely can you come up with a fixed sum to cover your moving costs and then save this specific amount – it doesn’t work like that. There are usually costs that you hadn’t anticipated, and it’s best to be prepared by saving more than you think you’ll need.
Do your research
In today’s internet-fuelled world, you’ll find plenty of useful information provided by housing industry experts, mortgage advisers and other first-time buyers who’ve already trodden the path you’re now attempting to negotiate. Learn as much as you possibly can about all things mortgages and houses, including what the latest interest rates are, and what to look out for when you visit a house for sale for the very first time. There’s no denying that this is the boring bit, but it certainly is important. You wouldn’t go into an exam unprepared, so why enter the house buying process without being equipped with the knowledge to get you through it?
Keep it cool
Even if from the moment you step over the threshold you absolutely love a particular house, remember to keep your cool and not lose your head. Avoid thinking of it as your dream house and definitely don’t start measuring curtains in your mind or talking with your partner about where you think the couch should go. Not only will this give signals to the seller that you could be an easy win, but it will make it so much harder if you run into problems.
If you’re looking with a partner, friend or even a family member, make sure you have some time alone with them away from the seller or the estate agent to either look around yourself, or simply discuss your thoughts. Often, someone objective like a family member or friend can see things that you, blinded by first-time buyer excitement, may miss. You may not have noticed the damp in the master bedroom or even the fact that a busy bus stop is right outside.
Stick to your guns
This doesn’t mean you should snap your metaphorical wallet shut and refuse to even approach the asking price on a house, (this is no time to be cheap!) but don’t be afraid to do some good old-fashioned haggling when it comes to the price. Yes it may feel a little awkward but everyone does it; it’s just part of the process. If other houses in the area haven’t sold for as much or if the survey has revealed a few defects, then haggling is a must. Remember that this is the biggest investment you will make in your entire life, if you never ask you will never know! And if you have really fallen head over heels in love with a home, don’t give it up! Unless of course the ceiling is caving in, then maybe you should walk away.
Whether it’s the pride talking or our desire to not spend more on third-party help when we’re already spending so much, but many of us think we can do it all ourselves. Maybe you do have the wherewithal to negotiate a favourable price, do the research, find insurance and even do all the legal work, but let’s face it, many of us will need help. Speaking to a mortgage adviser is just one of the simplest steps you can take to ensure that your journey towards home ownership is as smooth as possible. They will help to find the right mortgage to suit your earnings and outgoings, and will guide you through the process from beginning to end.
Sure, going with your dad’s mate who once did a bit of conveyancing or doing it all yourself might save you some money, but how can you be sure that it will all be done correctly? Professional conveyancing solicitors will know exactly what needs to be done, and will know what red flags to look out for. They will conduct local authority searches to find out if a new motorway will go right by your new home, water and mining searches, they will check with Land Registry and legally negotiate with the other side. So yes, you may save a few quid by cutting back, but it probably won’t be worth it in the long run.
Don’t give up hope!
Every single person or couple who have ever bought a home will be able to tell you their own horror story about the process. We don’t say this to put you off; we tell you this so that you won’t give up when the going gets tough. Problems crop up all the time; from small hiccups like paperwork delays to larger issues like offer disagreements, but that doesn’t mean the whole thing will fall through.
The process of buying a house can be an unpredictable and often long one, with some people completing their purchase in just a couple of months, while others find that it can take up to a year to complete. But don’t give up! Remember that you’ve scrimped and saved for months, endured countless meetings and phone calls and viewed dozens of houses just to find this perfect one. Trust us, it will all be worth it in the end.
The dust has finally settled on one of the most unpredictable General Elections in living memory, which saw the first Conservative majority government for nearly 20 years. While issues surrounding the NHS and immigration were certainly hot on everyone’s minds, those with ambitions of owning their own homes one day will be wondering if the new government will be able to turn those dreams into a reality. The newspapers are always reporting about the “state” of the housing market with increased doom and gloom, which is no doubt putting off many people. In fact, a report by Halifax found that 21% of first-time buyers believe it will be “virtually impossible” for them to secure a mortgage.
However, contrary to what the doom-mongering national press would have you believe, numerous measures have been taken to help people gain access to a mortgage, and this was something that the Tories were keen to emphasise during their recent election campaign. With certain promises being made, let’s take a look at exactly what the new Tory government will mean for those property buyers who find themselves daydreaming of paint samples and carpet swatches.
Help to Buy Scheme
The first phase of the Help to Buy scheme was originally launched by the Tory-Lib Dem coalition government in April 2013, and was designed to help people get on the property ladder. The equity loan part of the scheme is where you can purchase a home with only a 5% deposit, and the government will lend you the remaining 20%. According to the Department of Communities and Local Government, 47,018 properties have been purchased through the Help to Buy scheme in the first two years.
The Loan Equity scheme was due to end in December 2016, but in March 2014 Chancellor George Osborne announced it would continue until at least 2020, which is great for those who are hoping to get on the first rung of the property ladder in the next few years.
New Help to Buy ISA
While the paperwork can be stressful and the wait can be agonising, often the most difficult part of buying your very own home is saving up for the deposit. Building up enough savings to lay down a deposit may seem like a breeze in your head, but in reality it can be like trying to climb Everest. In an attempt to boost the savings of those trying to buy their own home, the government has announced a new arm of the Help to Buy Scheme, called the Help to Buy ISA. From autumn 2015, hopeful first-time buyers will be able to pop down to their bank and open a new account.
All you will have to do from there is make regular monthly contributions to the savings account. There’s no minimum amount, but you can save up to £200 every month. The best part is that the government will boost your savings by 25%, up to a maximum of £3,000. That means that if you manage to save £12,500 towards your first home, the government will bump that up to £15,000.
A problem faced by many first-time buyers is that many are simply out of their price range, but in their manifesto the Conservative party pledged that they would build an additional 200,000 top-quality Starter Homes over the next five years. These homes would be reserved exclusively for first-time buyers under the age of 40 and would be sold at 20% less than the market value. For any young people looking to break away from renting and get themselves on the property ladder, with the view of moving into a bigger house in the future, keeping an eye on the building of Starter Homes in your area will give you an idea of when to kick-start the mortgage application process.
For every person looking to buy a house, the subject of mortgage rates will be of constant interest. The thought of rising mortgage rates can worry homeowners but prior to the General Election, David Cameron reaffirmed his pledge to keep mortgage rates low. He claimed that the historically-low national cash rate in Britain, which is set by the Bank of England and currently stands at just 0.5%, was due to the deficit reduction efforts of the coalition government. While those who are trying to boost their savings won’t be particularly amused, the idea of continuing low mortgage rates will be music to the ears of anyone looking to make a move up the property ladder.
What does this mean for me?
In a nutshell, the outlook appears to be brightening for first-time buyers! All of the government plans mentioned above have been designed with you in mind, and aim to get you onto the first rung of the property ladder. With youngsters now being nicknamed “Generation Rent”, it’s no wonder that the new Tory government is keen to give people enough support to free them from the clutches of landlords and help them to lay some firm roots.
Buying a house can be nerve-wracking and stress-inducing enough as it is, so making sure you gain as much expert help as possible can help to alleviate some of those feelings. Knowing that you have that extra little bit of support when it comes to saving and weighing up the best mortgage deals is invaluable.
Don’t be tempted to go it alone. There are plenty of excellent professional mortgage advisers out there who will give you the best possible advice. Just enter your postcode, and mylocalmortgage.co.uk will generate a list of trusted mortgage advisers in your area.