Sunday 21 April 2019

Gloucestershire property insight with Charles Lear: October 2018

Buying your first home can be both dauting and exciting in equal measure, but Charles Lear director, Tom Hatcher, is here to help put the minds of new buyers at ease. Sharing his specialist insight into the local housing market, Tom has compiled some top tips to consider if you’re about to buy your first home.

Mortgages, fees, insurances and stamp duty… buying your first home can seem a bit daunting! However, armed with some top tips from Gloucestershire property expert Tom Hatcher, purchasing your first home doesn’t have to cause a headache.

Tom, who has been the director of prestigious Cheltenham estate agent Charles Lear since 2014, knows the local property market inside out.

What can you afford?

In a nutshell, the very least you’ll need to save is five per cent of the value of the property you want to buy – that’s your deposit. The higher your deposit, the lower your monthly repayments will be, and the better the mortgage rate you will be able to benefit from.

If you are a first-time buyer there are lots of options available to help you get on the property ladder. Some offers, like the government-backed Help to Buy scheme, provide buyers with the option of borrowing an additional 20 per cent of their house value to add to their five per cent deposit. This means that effectively you have a 25 per cent deposit, and your monthly mortgage repayments will be lower; or could provide the option to buy a larger property that was previously out of reach with a smaller deposit.

There is also the option of shared ownership, which is great for people who can’t afford the mortgage on 100 per cent of a home, allowing you to buy a share of a home, and pay rent on the remaining share. Later on, you can buy more shares, as and when you can afford to.

To get a clear idea of your affordability and what schemes you could benefit from, be sure book a meeting with a qualified mortgage advisor. They will also be able to give you advice on the process and can provide an agreement in principle; this is a certificate from a mortgage lender to say that in principle they would lend you a certain amount based on some financial information provided to them.

What other costs come with buying your first home?

In addition to saving for your deposit, there are some additional costs to buying your first home which you might need to consider.

Additional fees: Depending on which mortgage lender you use, if you choose to use a broker and which mortgage product you go for, there are sometimes additional fees to consider such arrangement fees, booking fees and brokers fees. These fees vary and will be discussed with you as you narrow down which mortgage suits you best.

Your mortgage lender also needs to value the property you want to buy before they lend you any money, to ensure they are happy that you are paying the right price for it. There is always a valuation fee to cover the cost of this and according to the Money Advice Service, it can cost anything from £150 up to £1,500 depending on the size of the property.

You will need to instruct a solicitor or conveyancer to carry out the legal side of your house purchase. Generally, they’ll set you back around £1000, but this fee can be slightly more or less, depending on the level of work required.

Stamp duty land tax: SDLT is a government enforced tax on all property purchases in England or Northern Island which cost more than £125,000. If you’re a first-time buyer though, you’re in luck. As of November 2017, first time buyers in England and Northern Island are exempt from paying stamp duty on a property that is under £300,000, saving you up to £5,000.
For properties costing up to £500,000, first time buyers will pay no Stamp Duty on the first £300,000. You will only pay Stamp Duty on the remaining amount.
Your solicitor or conveyancer will inform you how stamp duty affects you.
Surveys: In addition to the survey your mortgage company carries out, you may wish to have an addition survey of your own to ensure the property you are purchasing is structurally sound and to flag up any work you may need to do to the property in future.

There are different levels of survey you can pay for, but a homebuyer report starts from around £400, with buildings and full structural surveys costing more.

Insurance: When you own your home and have purchased with a mortgage, it is compulsory to take out a buildings insurance policy so take the cost of this into account. It’s also worth chatting to a financial advisor about things like life insurance, critical illness cover and income protection in case you die, become ill, or lose your job and can no longer repay your mortgage loan.

What should you look for in your new home?

For many people the location is everything, for others living space takes priority and parents are often keen to buy within the catchment area of an excellent school.

Once you have established a budget for your first home, it’s important to create a list of essential requirements. Think about how many bedrooms you really need, which areas you’d consider living in and what property features you’d love. Sometimes, it can be helpful to make a second list of things that would be ‘nice to have’ but that you’re prepared to compromise on. It’s also worth giving this list to estate agents, so they can keep an eye out for suitable properties coming to the market.

There are lots of apps that can help with your search too; from compass apps to see which way the garden faces, through to paint colour apps to help you imagine a room in a style that’s more suited to your taste.

There’s a balance to be had between knowing what you want and being too picky though, so try and have an open mind if an estate agent suggests something they think you’ll love.

Are there benefits to being a first-time buyer?

Being a first-time buyer means you are in an excellent position. You have no chain, meaning you don’t have to sell a property in order to buy. This means you can be flexible to move quickly or slowly, fitting in with the preferred timescales of the owners of the property you want to buy. This certainly gives you more power when it comes to negotiation, so ensure you make your position known.

Your flexibility with timescales also means you can take your time to explore the market and view a real selection of property – remember you are in no rush to decide.

For more information, call (01242) 222722, or visit directly.

© SoGlos
Thursday 25 October 2018

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