With property prices experiencing the first fall in annual value since June 2020, this may present an additional benefit for the First-Time Buyer?
(Source: Nationwide, House Price Index, February 2023)
Those looking to buy their first home still face numerous challenges to make that first step into property owning.
That said, this step was taken by over 362,000 first-time buyers last year, and accounted for more than half (52%) of all the home purchase loans that were taken out.
Move from renting
Renting is not always the worst-case scenario, as it works well for many, particularly if they want to have less ties, or perhaps would like to test out an area, or even a relationship! And there will be fewer hurdles to jump, compared to the strict borrowing criteria set out by the lenders.
For others though, renting is seen as ‘dead money’, as you’re not building up, nor benefiting from investing money, time and effort in your own property. Additionally, the rental payments might even be higher than the expected mortgage costs.
Key facts
For this group, renting would be a stepping stone whilst they get their finances (and deposit) in order.
– In fact, the issues surrounding the deposit – which was £62,470 on average, in 2022 – means that it’s no surprise that the average age of a first-time buyer tends to be around 32.
– And, possibly partly driven by the need to put aside a sizeable deposit, almost two-thirds (63%) now buy in joint names (with two or more people named).
– Many, though, will benefit from access to the slightly better deals, as the average deposit is about 21% of the property’s value.
(Source: Halifax, First-Time Buyer report, January 2023)
– Conversely, if only delivering a 5% deposit (£15,100, by comparison), the interest rate would be higher, and possibly more problematic to secure a loan in a falling house price market. However, it may help get you onto the ladder much sooner.
Are you Creditworthy?
A credit score is designed to try to predict your future behaviour. You can check your rating at one (or some) of the following:
– Checkmyfile – Tel: 0800 086 9360 (this brings together most rating agency results) – www.checkmyfile.com
– Experian – Tel: 0800 013 88 88 – www.experian.co.uk
– Equifax – Tel: 0800 014 2955 – www.equifax.co.uk
– TransUnion – Tel: 0330 024 7574 – www.transunion.co.uk
By talking to us, once you have your results, we’ll have a better feel for items which have scored you down and where you might get a more favourable response for credit.
Talk to us
As for us, we can assist with your application, factor in any financial support from parents (or grandparents), consider any specific government help, identify areas to you might improve once we see your credit score, and then look for the most suitable deals.
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.
