First Time Buyer Guide

The property market is constantly changing, and it can be overwhelming for first-time buyers to navigate. As we start 2023, there are a few pieces of advice that can help, thinking about getting on to the property ladder a reality.

A Guide to Understanding Your Financial Position

First and foremost, it’s important to get a clear understanding of your own financial situation so that you can ensure you are in the best position to obtain finance if the purchase is to be with a mortgage. Your first step would be to get a credit report, this will give you a score that lenders will look at to see if you are a good investment.  Ensure there are no mistakes or issues with your credit score that will affect their decision.

Your deposit or down payment will determine the loan to value and your income will determine the level of mortgage you can apply for.  Our advice is to get in touch with an independent Mortgage Advisor who has access to the whole of the market mortgage products to ensure you can get the best deal.

It’s important to do your research and be well-informed about the market and the area that you are looking to buy in. What type of property you would ideally like to buy, what amenities you need and if you are happy to do work to the property or if you would just like to turn the key and move in.

As we enter 2023 we have seen the Bank of England base rate increased to 4% in an attempt to reduce the UK annual inflation rate which now sits at 10.5%.

Despite this new increase currently, mortgage rates have reduced, however this may change as the year goes on.

Coins stacks and a little house.

Despite the challenges this year, it’s important to remember that there are still many options available for first-time buyers. It may be helpful to consider alternative financing options, such as government-backed loans or assistance programs, or to consider less competitive markets.

Government-Backed Schemes for First-Time Buyers

There are several government-backed schemes and initiatives in the UK that are specifically designed to help first-time buyers enter the housing market. Here are a few examples:

1.     Shared Ownership: This scheme allows you to purchase a share of a home (usually between 25% and 75%) and pay rent on the remaining share. As you can buy a smaller share, this can make it more affordable to get on the property ladder.

2.     Starter Homes: This initiative offers a discount of at least 20% off the market value of a new-build home to first-time buyers under the age of 40.

3.     Deposit Unlock Scheme: This is a scheme introduced by the home buyer federation exclusively for new Build properties for First time buyers and home movers.  In essence the house builder pays to insure the mortgage, which gives the lenders more security when offering high LTV mortgages. 

4.     Right to Buy: This scheme allows certain tenants of social housing to purchase their home at a discounted price.

5.     Rent to Buy: This scheme allows you to rent a home at a discounted price with the option to purchase it at a later date.

In conclusion, the property market is constantly changing, and it can be daunting for first-time buyers. However, by doing your research and being well-informed, you can increase your chances of success.

Talk to our financial advisor about your options