First Steps

In the past, First-Time Buyer mortgage loans generally equated to three to four times your salary. Nowadays, we’re seeing deals where the loan to income amount has risen to 5.5, or even 6 times!

This is one of many examples where there is a desire by the lenders to help First-Time Buyers.

Elsewhere, the government’s enthusiasm to help them out, covers schemes like ‘Freedom to Buy’, and also, they are committed to building more homes to meet the demand (1.5m over the next 5 years).

Additionally, the government’s desire to view Landlords as a Budget revenue source, may result in more properties coming onto the market, as some within that sector depart.

Finally, let’s factor in possible financial help via parents (and grandparents). Or, consider the pragmatic approach taken by some first-time buyers, where two (or more) people are clubbing together to obtain their first home.

Providing a deposit

This is one of the biggest stumbling blocks. In 2023, the average deposit was £53,414, equating to around 18.5% of the purchase price.
(Source: Halifax, First-Time Buyer report, January 2024)

This percentage deposit will obviously open up the buyer to better rates than those who are looking at deals at around a 5% deposit (or less). Although, for some, the lower deposit option may be more appealing, as it’ll get them onto the property ladder sooner.

The lower Stamp Duty cost is going…

First-Time Buyers (in England and Northern Ireland) benefit from lower Stamp Duty charges. However, the better tax rates currently in place will end on 31 March 2025.

Up to 31 March 2025

Up to £425,000 = 0%
Portion from £425,001 to £625,000 = 5%
If the property price is over £625,000, the FTB reverts to the normal rates.

From 1 April 2025

Up to £300,000 = 0%
Portion from £300,001 to £500,000 = 5%
If the property price is over £500,000, the FTB reverts to the normal rates.

Example Stamp Duty scenarios

As it will revert back to the previous higher charges from 1 April 2025, this would mean, for example:

A £425,000 First-Time Buyer purchase will generate no Stamp Duty tax up to 31 March 2025, thereafter, it would be £6,250.

And, in another example, a £625,000 purchase would see the tax take rising from £10,000 to £21,250.

This may prompt some to endeavour to complete before April.
(Source: gov.uk, Stamp Duty calculator)

Talk to us

41% of First-Time Buyers, who bought in the last two years, struggled to understand the range of mortgage options available to them.
(Source: Moneybox, Voice of FTBs survey, September 2024)

And that’s where we come in. We can assist with your application, factor in any financial support from the family, and assess where you stand on meeting the lender’s affordability criteria – which varies across the board.

We’d also consider the various schemes on offer from the government, and balance that against the alternatives out there in the general marketplace.

If this route is of interest for you (or a family member), then please get in touch to find out more.

Your home may be repossessed if you do not keep up repayments on your mortgage.