Tips to help first time buyers in York get on the property ladder
There’s no doubt that it’s difficult for first time buyers in York to get on the property ladder in what is a competitive market.
Indeed, according to the Office for National Statistics, the average price for first-time buyer properties increased by nearly 10% in the year to January and the average price is now £210,000.
For many young people looking to get onto the property ladder this figure must seem unassailable but there are ways of getting ahead of the pack to find the right property so they should not lose heart.
Redmove tips for first time buyers in York
It’s always a good idea for first time buyers in York to stand out from the crowd so they should get their finances in order; speak to a building society or a mortgage broker to get a mortgage agreed in principle – this means you will have done the hard work before you find a property and need to move quickly.
They must also saving a large chunk of their income!
This is perhaps the most obvious advice but unless you start putting money away, and in sizeable amounts, then you will never save enough for the deposit to put on a house.
The recently launched ‘Help to Buy ISA’, which will begin in the autumn, could be a very useful way for first time buyers in York to save cash.
The idea behind the scheme is an excellent one because it enables a saver to open a tax-free savings account with £1,000 and then put away up to £200 a month.
Then, when you are ready to buy a home, the government will add 25% to the amount saved, up to a maximum of £3,000.
The Help to Buy ISA is available for properties worth £250,000, that’s outside London, and up to £450,000 in London.
Use an ISA to save a deposit for a home
If you have already begun saving and have a regular cash ISA then you need to be aware that you can only have one ISA in any tax year; you’ll need to sit down and work out which is the best choice: either the regular cash or the Help to Buy ISA.
In addition to this savings account, savers can also open a stocks and shares ISA and be able to save £15,240 in total in their ISA accounts.
Some building societies and banks also offer special first-time buyer savings accounts, for instance the Nationwide offers an account which will add a £1,000 bonus for saving £10,000. The bank also offers a very impressive first-time buyer mortgage too.
York estate agent Redmove is one of the leading agents in the area and we would recommend that first time buyers who are buying a home with help from their parents should take them along to viewings.
It’s also important that they do not make an offer without having their parents see the property first.
Also, if parents are helping you to buy a property then you need to be aware that most lenders will require any funds being given by a family member to be done as a gift, and written proof given, before they will agree a mortgage.
Looking for a property as a first time buyer can be a daunting and time-consuming task but we would recommend that you see as many properties as is possible before making an offer.
First time buyers in York should look at lots of homes
We say this because by seeing more than a dozen properties, first time buyers in York will see what they can get for their money and highlight what it is you want from your first home.
In addition, it’s always tempting to fall in love with the first property you see but this is rarely a good idea.
However, it is a good idea to get to know the estate agents in the area and let them know what you are looking for; be specific about your needs and wants so that the estate agent knows not to waste your time with properties that do not interest you.
Eventually, after undertaking enough viewings to know what you want from a property, it will be time to make an offer as a first-time buyer.
This can be an intimidating process for many and it will be a learning curve – though remember that everyone has to start at some point.
Don’t dwell too long on what the perfect offer needs to look like, just remember it’s usually the starting point for negotiations. It is also a way to open up the communication between seller and buyer.
When making an offer highlight your ideas for the property
It’s at this point that a potential first-time buyer can highlight how much they love the property and what they would like to do to it; the seller may prefer this approach rather than selling to a buy to let investor who may have a bigger deposit, for instance.
The other benefit to being a first-time buyer is flexibility; after making an offer to buy a home then things can move fairly quickly afterwards.
Having the flexibility to respond to an offer being accepted could make a huge difference between success and losing the home.
If you are already renting then it may be time to have a conversation with your landlord to discuss making your tenancy more flexible to enable you to move quickly when required.
Another good piece of advice is to source your solicitor early on in the process so that they too are prepared for a quick move.
If you’ve only had your mortgage agreed in principle then you’ve already shown that you are organised and prepared for a quick purchase process.
However, if you haven’t put this in place before viewings, be prepared for lots of questions and details to be asked from building societies and banks.
Mortgage lenders will only lend on affordability
Essentially, a mortgage lender is only interested in whether you can afford to buy a property and they will need evidence of your income and what you spend your salary on; this will mean proving expenditure on things like bills, haircuts, holidays and meals.
To save time, you should really prepare a budget planner before this because it will help you find the areas where savings can be made and it will pull all of the relevant information together for the mortgage lender.
Another issue that first-time buyers need to be aware of is whether their property is really suitable.
We appreciate that the pressure is on to find a property within your budget and that there are going to be lots of people bidding on it as well but your mortgage lender may take a different view of where you are planning to buy.
For instance, a nice flat above a busy takeaway or a commercial premises may seem like a steal but a mortgage lender may not agree because, in a worst case scenario, they may have to repossess the property and sell it quickly.
They will need to sell that property to someone who wants to live there – and this advice about the ability to resell when you need to move on is something that first-time buyers should also bear in mind when they make an offer.
There are lots of very good mortgage offers available for first-time buyers, especially for those with a 10% or more cash deposit available.
Even if you only have a deposit of 5% there are still some good rates available and some helpful schemes such as Help to Buy 1 and 2.
Redmove are an award-winning leading York estate agency and are continually striving to the best at what they do, especially to help first time buyers in York. They are also proud members of the National Association of Estate Agents.