When you’re buying your first home, advice is worth its weight in gold. It can be a costly and stressful process, but it is one that many members of your friends and family have already been through and their wisdom can help save an awful lot of that time, money and hassle.
(And don’t forget the internet is your very best friend while house hunting. It’s not just RightMove for the houses, either. Local media like Dorset’s The BV magazine has some brilliant insider tips on the 2023 housing market, and searches such as best home search for Brandon MS (if you should, of course, be looking for a house in Brandon Mississippi…) will often bring you some interesting results which are beyond the standard RightMove or Zoopla search.)
It’s also worth searching out the views of the experts. The housing market is awash with commentators, columnists and professionals who write about this subject almost every day. Time spent reading up will be well worth your while to save cash from the process.
Here are four expert tips to start you off…
Up your deposit
The deposit is the biggest up-front cost to find, and it can be tempting to save for the smallest amount you can get away with so that you can just get on and buy a house. Yet, in fact, it can save you an awful lot in the long run if you save up for a bigger deposit and cut your mortgage repayments. In an article on ITV, financial expert Martin Lewis explained: “Imagine you’ve got a £150,000 home and want a £136,000 mortgage. That’s a 90.7% loan to value and the top two-year fix is 3.98%. Yet if you use £1,100 of savings to reduce the borrowing needed, you’d cross a threshold and be at just under 90%, where the top two-year fix is 2.69%. This would save over £700/year in mortgage payments alone.”
Government schemes
Under the umbrella of Help To Buy, the Government has launched a series of schemes to ease the financial burden on buyers. First timers can get a bonus on their savings with an ISA and look at equity loans, shared ownership and mortgage guarantee schemes that may well suit their circumstances and make the process more affordable. Communities Secretary Greg Clark said: “Anyone who works hard and aspires to own their own home should have that opportunity and for many people Help to Buy is turning that dream into reality.”
Stamp Duty
Stamp Duty is another big up front cost that can be a big burden for buyers. Anyone looking for a small home could avoid this completely by purchasing a home priced under £125,000, as these properties don’t require Stamp Duty to be paid. Buyers shopping for properties on the market for £5-10,000 above that figure could also use this as a negotiating technique, asking sellers to drop their price below this level. Property Investment Blueprint also points out another potential strategy. It suggests asking a solicitor to make separate charge for fixtures and fittings for your purchase, explaining: “This means that sellers can negotiate a price that is into a higher stamp duty band but their buyers will pay less for the house itself, which is subject to the tax and a separate sum for the fixtures and fittings which are not.”
Use the tools you have to research
First time buyers have more tools at their disposal than ever before. With just a few clicks, buyers can find out a property’s search history and the ‘going rate’ for every other home in the same street or neighbourhood. Taking time to soak in the information available can help a buyer to be informed and save money in the long term. Mortgage expert Ray Boulger told Endsleigh: “This will allow you to conveniently research the areas in which you are interested and be much better informed when you talk to estate agents.” The more you know, the less likely you are to be caught out.
