Sam-Bains-3First Time Buyers’ House Guide

  • Can You Afford To Buy?
  • Deposits And Preparation
  • Ways To Get On The Ladder
  • First Time Property Investor?

Should You Buy And Can You Afford To Buy?

If you’re a first time buyer, you’ll need all the help and incentives you can get, whether financial or practical, to buy your first home. So just how should you go about making that all important first step onto the property ladder?.

Looking for advice and guidance for your first time buyer finances?

Set up a standing order to transfer money into a high interest savings account every month. Also, benefit from tax-free interest on up to A?3,600 a year using a cash individual savings account (ISA).

Should You Buy A House Now?

Has anyone told you how special you are lately? As a first time buyer, you are the heartbeat of the property market – vital to its health! You may have noticed that the government, estate agents and new home builders are doing their utmost to persuade you to buy, despite the credit crunch. But don’t be pressured into buying now unless you can really afford it. If, however, you are ready to roll, youa��ll be in a strong position to take advantage of the falling house prices and the increasing number of first time mortages.

essential2Can You Afford To Buy Now?

Ita��s not an easy time to be a first time buyer – struggling to save for a home during a credit crunch. But unfortunately it’s almost a necessity at the moment to have a 10% deposit in order to get a mortgage (although there are some 95% deals still around). ‘The average deposit paid by first time buyers across the country is now nearly A?20,000, leaving even dual income households hard pressed to find a deposit,’ says Phil Jenks, head of mortgages at the Halifax.

Little wonder that 46% of first time buyers under 30 are getting ‘substantial’ financial help from relatives, compared with just 10% in 1995, according to the Council of Mortgage Lenders (CML). If it’s an option, go for it. You’ll have a significant advantage. The bigger the deposit the better mortgage rate you’ll get.

‘Or’, says Dean Sanderson, Chair of the National Association of Estate Agents, North West. ‘If youa��re struggling to raise a deposit, ask the vendor to pay your deposit and legal fees for you rather than to reduce the price of the property.’

Don’t forget the deposit isn’t the only money you need to raise – you’ll need to consider all the costs associated with buying (stamp duty, legal and removal costs, survey and mortgage arrangement fees and buildings insurance).

Saving For A Deposit

Whilst sitting around saving for a deposit doesn’t have quite the buzz of buying, there are rewards. The market has yet to stabilise, so some buyers may still benefit from falling house prices in their area.


Set up a standing order to transfer money into a high interest savings account every month. Also, benefit from tax-free interest on up to A?3,600 a year using a cash individual savings account (ISA).

Get Ready To Buy Your First Home

essential3Housing market pundits may not always agree, but most conclude that house prices will continue to fluctuate or fall somewhat in many regions over the next year. If youa��ve got finances in place, you are in a strong position to take advantage of this. The sluggish market means there will be sellers out there desperate to sell.

‘A lot of first time buyers make the mistake of thinking that renting is more affordable than buying, but it’s worth remembering that when youa��re paying a mortgage you’re paying for something that you own,’ says Fraser Thomson, brand director for first time buyer group, G2.’If you need somewhere to live, buy if you possibly can : renting is still expensive and dead money. Buying is a long term asset and investment,’ says Lucy Chitty, director of a housing government group, Presentation.

Sign up to the local estate agents and register at the property portals such as the 4homes property search 4homes property search, Rightmove and Property Finder . Get great advice from How to Finance Your First Home, too. There are also some good websites full of information and advice for first time buyers.

Dona��t let your relief at finding something you can actually afford, blind you to other issues. Choosing the right location is still as important as choosing the right property – and you should still be looking to spot an area on the up to make the most of your money. Familiarise yourself with your target area. Remember a number of factors will affect the desirability and therefore price of a property including transport links, schools, leisure facilities, shops and green space. Use and for background research. At you can check out what properties in the neighbourhood are selling for, too.

Check out the mortgage calculator, loans, credit cards & savings comparison tools Clever Ways To Get On The Ladder

If you find yourself crashing back down to earth with the realisation you can only afford a shoebox in your target area , don’t despair. There are ways of making your money go further.

Homeownership Schemes

There are various equity sharing schemes designed for those who need a boost to get onto the property ladder. Most, in essence, enable you to buy a partial share in your new home (from as little as 50%), and either rent the remaining share from a housing association or take up a loan to fund it. The government-backed Open Market HomeBuy scheme, previously only open to key workers, is now available to any first time buyers earning under A?60,000. For more information visit

New Home Incentives

essential4Affordable ‘starter’ homes and first time buyer incentives are nothing new, but developers are upping their game significantly with everything from help with the deposit and mortgage to rent now/buy later schemes, even vouchers for food!

With developers doing all they can to ease the financial burden of purchasing a new home, there are some excellent opportunities to buy and good deals to be had, as long as buyers are sensible about what repayments they can afford to make on a monthly basis,’ says Ian Baker, MD of Galliford Try Homes.


All the incentives and cheap mortgage deals in the world aren’t good value if the property is still overpriced in todaya��s market. Don’t be afraid to make an offer. Developers are desperate to sell so there are some good deals around. Be careful where you buy too, if the development isna��t selling, ask yourself why.

Buying At Auction

An auction may seem like no place for a novice, but buying a house at auction (new link here) can provide the opportunity to pick up a bargain. The buying process is completely different. So do your homework. Taking someone with you who knows how the system works is a real asset.

‘The great thing about property auctions is that it’s a much faster process – ideal for first time buyers who are not in a chain and want to move in straight away. Very often you can purchase a property for below market value,’ says Andrew Binstock of Sutton Kersh Binstock Auctions.

Repossessed properties are usually sold at auction. But bear in mind they may be in need of some TLC and aren’t always the bargain they seem – the previous owner may well have tried to sell the property themselves unsuccessfully first.


Visit for information on property auctions nationwide.

Stamp Duty Land Tax

For more information on the latest Stamp Duty incentives click here

To work out your potential profit, if you’re buying to sell, you’ll need to add together:

the initial cost of buying the property
costs of renovation and refurbishment
day to day running costs
and subtract the sum from the potential selling price of the property.

If you’re buying to let, add together:

the annual cost of the mortgage
maintenance fees/insurance
agenta��s fees
lost income when empty and subtract the sum from the achievable rent to get your potential annual profit. You will also have the start up costs for the property.

essential5For more information, don’t miss, How To Buy An Investment Property To Let, Arranging Finances Of A First Time Property Development and Which Improvements Will Boost Your Home’s Value?

Tip: For further help on all aspects of becoming a landlord, visit the Association of Rental Letting Agents (AORL) website.

Consider renting out a room in your new home to accrue extra income. a�?If you take in a lodger to make ends meet, the first A?4,250 of rent received in a tax year is tax free,a�� says Chris Jones, LexisNexis
director of Tax Training. For more information visit

Check out the mortgage calculator, loans, credit cards & savings comparison tools

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