Buying guide 16/07/2024

Our Guide for First-time Buyers

Are you a first time buyer in search of your dream home? It can be a nerve-wracking yet exciting experience. While you might want to move in right away, there are several steps to consider. That’s why we have prepared a comprehensive guide for first time buyers to put your mind at ease and make sure all aspects are covered before you start house hunting.

Saving for a deposit

One of the most essential parts of house hunting for any buyer is saving for a deposit. It’s important to think about your requirements, such as:
●   How many bedrooms do you need?
●   What area are you looking to buy in?
●   If you’d like a garden, etc.

These factors will inform how much of a deposit you will need.

The average house deposit in the UK is 15 percent, which is a fairly significant amount to save for. With Keepmoat, we offer Deposit Unlock which is a scheme aimed to help all types of buyers purchase a brand new home with just a five percent deposit, making it more attainable for younger people to take the first step onto the property ladder.

For those less able to save, shared ownership is also an option. The shared ownership scheme at Keepmoat lowers the cost of buying a new property, making it easier for first-time buyers to take the initial step to owning a home. With shared ownership, you buy into a share of your home, usually between 25 percent and 75 percent, and then pay rent on the remaining amount.

For renters looking to buy, we offer a deposit-free mortgage launched in partnership with Skipton Building Society. The 100 percent Loan to Value (LTV) mortgage will allow first time buyers who can provide evidence of affordability and have a strong track record of rental payments to borrow up to 100 percent of a new home without the need for a deposit.

There are also first time buyer government schemes available for individuals looking to buy their first home. It's essential to consider what is affordable within your budget.

Speaking with a mortgage advisor

As a first time buyer, it's really important to speak with a mortgage advisor as applications tend to be more challenging. Mortgage advisors can provide you with useful knowledge to help make the process easier. This consultation will also help with understanding what you can afford.

Additional fees

Many people may think that first-time buyers don’t pay additional fees such as stamp duty, however, this is not the case. It’s important to also budget for costs such as removal services, taxes, insurance, solicitor fees, stamp duty and land tax.

●   Stamp duty is a government tax on homes valued at more than £250,000, but first-time buyers may have different rates.
○   In Scotland, the equivalent of stamp duty is land and buildings transaction tax (LBTT). For first time buyers in Scotland, LBTT only applies on properties over £175,001.
●   Mortgage lenders usually require a valuation of the property, which can cost around £150-£200.
●   Budget for conveyancing fees ranging from £500-£1,500, plus 20% for VAT.
●   Additionally, first time buyer mortgage providers may charge a transfer fee of around £40-£50.

Browsing homes and putting in an application

As mentioned, it's key to list out what you’re looking for in your home to find the perfect property for your budget and needs.

When applying for a mortgage you will need to provide evidence of your income, credit commitments and spending, so it's important to start saving documents such as utility bills for this.

Next steps and moving in

Once your offer and application have been approved, it's time to start thinking about the details of your move. When you have your completion date and move-in date, it's important to schedule a removal van to help move your belongings. This will make the process easier and less stressful.

When you've moved in, it's time to personalise your home. You may want to keep some savings aside for this but think logically about what you'll need initially rather than what you want.

When you're fully settled in, it's time to celebrate your new adventure with some bubbly!

We hope all first time buyers find this guide useful – whether you’re moving into a new build or renovating an older house, share your photos and top tips using the hashtag #KeepmoatHomes, we’d love to see your posts!