First time buyers year of opportunity
2010 could be the big opportunity to get on the property ladder that many first time buyers have been waiting for. A number of factors have converged to make entering the housing market significantly easier than in recent years.
A combination of the correction in house prices and low interest rates means that affordability for first time buyers is at one of its lowest levels for many years. In June 2007 a buyer on average pay would have had to spend 50% of their disposable income on mortgage payments, whereas that level now stands at 27%, also well below the long term average of 34%.
The fact that many lenders are no longer insisting on prohibitively large deposits from buyers, together with the predicted stability in house prices, means that now may be a good opportunity to take the plunge.
Nick Elliott, Solicitor in Norrie Waite & Slater's conveyancing department, gives us his top 3 tips for prospective first time buyers.
- Get your mortgage approved before you start to look at properties. There is no point getting your heart set on a property only to find that you cannot borrow the money to buy it. Lenders will confirm your income and credit history and give you a decision, in principle, for a set loan amount. This will also put you in a good position to negotiate with sellers.
- Factor in additional expenses. Remember to include costs such as surveys, Stamp Duty Land Tax and legal fees when making your calculations.
- Ask for an all inclusive conveyancing quote. Conveyancing costs are made up of legal fees and expenses such as searches. Some firms advertise very low rates but may add on additional costs later on for things such as leasehold properties (which are common in Sheffield) or dealing with mortgage lenders. A first time buyer should also be aware that a Stamp Duty Land Tax Return Form will have to be submitted on their behalf even if they are below the threshold where such tax is payable. Some firms of solicitors will again make an additional charge for this service and this can be an unpleasant surprise at the end of a transaction. We offer a strict "no hidden fees" policy to reassure clients that this will not happen.
Click here to view a profile of Nick Elliott.
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