It’s a contradiction for many aspiring first-time buyers that what they’d pay in mortgage repayments is often less than their monthly rent, yet it remains difficult to get onto the property ladder.
It’s not as if the desire to own a property is not there. In fact, 49% of 18-34 year olds surveyed said that homeownership is now more important to them as a result of the pandemic*
(Source *Santander, Life after Lockdown, June 21)
52% of this age group also set out that the deposit was the biggest hurdle*. However, Government intervention with the Mortgage Guarantee Scheme has helped bring about more products(across the board) that only require a 5% deposit. Some may be able to benefit from the bank of Mum & Dad to help deliver that deposit.
Rising House Prices
The demand for more space afforded by larger properties has helped drive up prices. So, you may find that if you are after a smaller home, it might be more achievable than you first thought to get a foothold on the property ladder.
Additionally, there’s the Government’s First Homes Scheme for new build properties in England. For eligible purchases, it’s designed to provide homes at a minimum discount of 30% against market value, resulting in both a smaller deposit and mortgage loan. However, the discount off the price remains with the property when you sell it on.
Type of Mortgage to opt for
Another way of reducing the monthly mortgage payments is to take out a mortgage over a longer-term, such as paying it back over 35 years. Although this means you will be paying more money back if extending the payback period.
However, over your lifetime of property ownership, you’re not committed to staying with the same deal – with homeowners often having a number of different mortgage deals across the years.
The process can be confusing and that’s why around nine out of ten First Time Buyers are likely to use an advisor.
(Source: Accord Mortgages, July 2021)
Asset Harbour’s team of mortgage advisors have many years experience in the First Time Buyer market and are fully aware of what is going on and the various schemes available.
Call us today on 01276 986333