If you're worried about rising costs and mortgage rates, you might fear buying a home is out of reach - but there are still plenty of opportunities out there if you know where to look, according to Gloucester-based The Mortgage Brain.
SoGlos caught up with its founder and director, Enzo Mora, to get a picture of the offers available to potential buyers at the moment and his advice on how to make the most of them.
About the expert – Enzo Mora, founder and director at The Mortgage Brain
Enzo Mora is the founder and director of The Mortgage Brain in Gloucester. He and his team are dedicated to helping customers every step of the way with their mortgage search and application.
The Mortgage Brain has more than 30 years of experience in helping customers find the best mortgage through its unique Mortgage Search System. Continually updated with the latest offers from the widest range of lenders, the team can rapidly locate the best deal to suit a client’s individual circumstances wherever they are on the ladder.
Deposit Unlock is the new scheme replacing Help to Buy. How does it work?
Deposit Unlock is aimed at buyers – both first-timers and those already on the property ladder – with a five percent deposit, for those who want to buy a brand new home up to £750,000.
The remaining 95 per cent of the purchase price is then borrowed from selected lenders and housebuilders participating in the scheme.
Deposit Unlock is backed by a developer-funded mortgage indemnity insurance, which covers lenders from any potential loss if the property is sold for less than the owner paid for it. There are no additional costs to the buyer.
You will still need to pay stamp duty at the current rate and the usual legal fees associated with buying a property.
If house hunters have recently split up from a partner and had to sell their property, can they buy again with Shared Ownership?
Shared Ownership is a lower cost way to buy a newly built home or an existing one, through resale programmes from housing associations.
You qualify if you are a first-time buyer, you used to own a home, but can’t afford to buy one now, or are an existing shared owner looking to move.
You buy a share of your home (between 25 per cent and 75 per cent of its value) at the same time as paying an affordable rent on the remaining share.
You’ll need to take out a mortgage to pay for the purchased share and any deposit will be five to 10 per cent of the price of the share, not the full market value.
You can buy more shares, known as staircasing, later and you could eventually own 100 per cent of your home.
You can buy a home through Shared Ownership in England if your household earns £80,000 a year or less outside London, or £90,000 a year or less in London.
Shared Ownership properties are always leasehold.
Are there schemes where house hunters can buy a property with help from family members?
Yes! We can help you access schemes like Generation Home which offers income boosters where an individual (or couple) can have up to six family members be their income booster.
They can choose to contribute a set amount each month or to cover the whole amount should the payment be missed.
This can help maximise the amount of lending available to you. The scheme also offers deposit boosters who do not need to be related to you, but can gift the money to you or choose to invest the money and get it back like an equity stake.
Only the people buying the property go on the deeds, so stamp duty is not affected for the boosters.
Is there such a thing as a green mortgage?
Some lenders are willing to offer a green mortgage on homes with an Energy Performance Rating of Grade A to C which would most likely be a brand-new home.
The incentive could be in the form of a cheaper rate, cashback or other financial help from the lender.
Additionally, the rising cost of utilities won’t be as harshly felt when you’re living in a brand new, more energy efficient home.
Our advisers have direct links with these lenders.
If a buyer is living with their parents, can they buy a property as a buy-to-let?
This can be a good way to get on the property ladder, especially if you already live rent-free somewhere else, such as with your parents or in employee accommodation.
While most lenders prefer to lend to existing landlords and property owners, it is possible to get a buy-to-let mortgage as a first-time buyer. However, there are fewer lenders and buyers may need a larger deposit than for a usual residential mortgage, usually between 20 to 25 per cent of the property value.
Most lenders will also require that the rental income of the property will cover between 125 per cent and 145 per cent of the monthly mortgage repayments.
Our specialist Buy to Let advisers will be able to give you more advice.
If house hunters are keen to buy somewhere next year, how can they get prepared now?
The most important factor is having a big enough deposit of at least five percent of the purchase price plus savings to cover costs such as stamp duty, land registry, solicitor’s fees and a reservation fee if buying a new home.
Looking at your outgoings and cutting back will help you save, but you may also be relying on parents or grandparents for financial help.
A bigger deposit will mean you can get a better mortgage deal. Stamp Duty savings announced in the budget will be in place until 31 March 2025, so for first-time buyers there is no stamp duty to pay on a home costing up to £425,000, and the residential nil-rate tax threshold for other buyers except second homeowners is £250,000.