November 1st 2024.
Are you dreaming of owning your own home? Well, you're not alone. With property prices soaring and the constant struggle to save up for a deposit, it's no easy task for first-time buyers in the UK. According to Gov UK, the average cost of a property nationwide is now a staggering £282,000, and in London, it's even higher at £689,245. But don't give up hope just yet, there are still ways to get onto the property ladder amidst these skyrocketing costs. In fact, Metro recently spoke to a property expert who shared some valuable tips and perks that first-time buyers can take advantage of.
One option is to choose a mortgage deal that offers cashback. Yes, you read that right. Some developments are actually offering cash incentives to encourage first-time buyers to move in. For example, at Royal Docks, some building associations are currently offering £2,000 cash contributions. And at East River Wharf, you can get up to £5,000 cashback if you use their recommended solicitor and broker and exchange within 28 days. Just imagine all the furniture you could buy with that money! With prices starting at £96,875 for a 25% share of £387,500, this is a great opportunity for first-time buyers to get their foot on the property ladder without breaking the bank.
Another option is shared ownership, where you can purchase between 10% to 75% of a property and gradually increase your share as you can afford to. This also helps to reduce the rent owed. However, it's important to keep in mind that the smaller the deposit you initially place, the more interest you may end up paying over the lifetime of your mortgage. But overall, shared ownership can be a great way for first-time buyers to get their foot on the ladder.
Don't forget about the stamp duty land tax relief, which will automatically be applied to first-time buyers. This is a helpful exemption that can save you a significant amount of money. And according to chancellor Rachel Reeves, there are plans to continue this relief in the future. Just keep in mind that this relief only applies to purchases up to £250,000, and after March next year, it will reduce to £125,000.
Saving up for a deposit can be a daunting task, but there are some schemes in place that can help. The Help To Buy ISA, which was technically abolished in 2019, is still available for those who successfully applied for it before then. And the Lifetime Individual Savings Account (LISA) is another option for first-time buyers. With this scheme, you can invest up to £4,000 a year, and the government will top up your savings by 25%. This can then be used towards purchasing a home up to £450,000 if you're aged 18 to 39.
But wait, there's more! The First Home Scheme offers discounts of 30% to local first-time buyers and key workers, while there are also schemes in place to help reduce the initial cost of a deposit. And for those who struggle to save enough for a deposit, the Mortgage Guarantee Scheme can help by supporting lenders through government-backed guarantees on 95% mortgages.
Finally, when buying a home for the first time, it's important to consider taking out a life insurance policy. While it may not be a legal requirement, it can provide peace of mind and financial protection for you and your loved ones. Some lenders even consider it a precondition for qualifying for a mortgage, so it's definitely worth considering.
In other news, research has revealed that the most popular London borough for first-time buyers is Brent in the northwest. With its lovely areas such as Willesden, Wembley, Kensal Green, and Queen's Park, it's no surprise that 77% of homes in this location were bought by first-time buyers in the first half of 2024. Other popular boroughs include Greenwich, Newham, and Tower Hamlets, showing that first-time buyers are making their mark in the London property market.
Are you a first-time buyer with a story to share? We'd love to hear from you. Get in touch by emailing us.
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