Congratulations on choosing to purchase your very first home!
Buying a house is a very big decision, but it can also be one of the most rewarding steps you can take towards gaining independence. A home acts as your own personal sanctuary, its individual to you, your tastes and your living arrangements. It provides comfort and security. It’s a place to spend hours and hours of time and create lasting memories.
We take immense pride in our homes and attach huge emotional value to them because they’re a space in the world that is truly our own.
Unsurprisingly, buying a home is therefore an incredibly emotive decision. However its important to try and remain practical to ensure your monthly repayments are financially sustainable.
At Hollins, we understand that buying a home can look daunting, especially for first time buyers. That’s why we’ve put together this article to provide you with some actionable financial advice to help secure your spot on the first rung of the UK property ladder!
Government-Backed Schemes
The UK government offers several schemes to help first-time buyers secure their first home.
These schemes can provide a boost to your deposit, help to pay your stamp duty, or even give you access to cheaper mortgages.
They currently include:
Stamp Duty Relief for First-Time Buyers up £425,000:
If you’re a first-time buyer purchasing a property for £425,000 or less, you won’t have to pay any stamp duty. If the property is worth between £500,000 and £625, 000 you’ll still receive some relief with a reduced rate.
[UK Parliament: Stamp Duty Land Tax (Temporary Relief) Act 2023]
Help to Buy LISA’s:
A Lifetime ISA (LISA) is a savings account that allows you to save up to £4,000 per year towards your first home. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year. If you max out your savings, that’s £5000 a year towards your new home!
You can use the money in your LISA to buy a home worth up to £450,000. If you’re purchasing with a partner, who is also a first-time buyer, you can both open and save money into individual LISA accounts, then combine your savings to purchase the property.
[Money Saving Expert: Top Lifetime ISA’s (LISAs)]
How Much Deposit Do You Need to Save in 2023?
Saving for a deposit can feel like a huge task. We get it, you just want to move in.
However, you should keep in mind that the larger the value of your deposit, the more money you’re likely to save on your mortgage, through lower interest rates and repayment costs in the long term.
As a general rule of thumb, you’ll need to save at minimum of 5% of the property’s purchase price for a deposit, however most banks like a 10% deposit for the home you’re buying.
Lenders will see you as a lower risk, and they’ll be more likely to offer you a better interest rate if you can increase the value of your deposit.
[Zoopla: What’s the minimum deposit for a house in 2023?]
New Build Homes
We may be biased, but buying a new build home can be a great option for first-time buyers.
New builds are often more energy-efficient and require less maintenance than older properties.
They also come with a 10-year warranty, giving you peace of mind that any structural issues with your home will be covered, which of course can save on maintenance bills.
Other Helpful Resources
If you’re a first-time buyer in the UK, there are several resources available to help you navigate the process. These include:
[Gov.uk]: The UK government’s website offers information on government-backed schemes and other resources for first-time buyers.
Our recommended financial advisors are:
By taking advantage of government-backed schemes and seeking financial advice, you can make the process of securing your first home much easier.
If you’re ready to take the first step, take a look at the homes we have on offer under current developments. Our experienced sales consultants will be more than happy to guide you through the process to finding the perfect new home to suit your needs!