LOW-DEPOSIT MORTGAGES PROVIDE HOPE FOR BUYING YOUR FIRST HOME.

Low-deposit mortgages (as low as a 1% deposit) are on offer but with strict borrowing criteria. Whilst these deals can be pulled as swiftly as they materialise, they show a degree of intent for First-Time Buyers.

In addition to this, alongside the support from government schemes (such as Freedom to Buy), there is also real and immediate help from some of the parents (and grandparents) of those looking to get onto the property ladder.

Plus, first-time buyers are taking a pragmatic approach, where two (or more) people are clubbing together to obtain their first home. According to Halifax*, this represented almost two-thirds of all first-time buyer mortgage completions in 2023.

Moving on from renting

Though renting has positives - such as the flexibility to test out an area (or relationship) and fewer financial questions to answer/justify - for many, it’s seen as ‘dead money’. This is because you’re not building up or benefiting from investing money, time and effort into your owned property. The rental payments might also be higher than expected mortgage costs.

Providing a deposit

This is one of the biggest stumbling blocks. In 2023, the average deposit was a substantial ￡53,414, representing around 18.5% of the purchase price. This is significant, especially in an environment where a first-time buyer's average home cost fell almost 5% from the 2022 peak.

The higher percentage deposit will open up the buyer to better rates than those looking at deals at around a 5% deposit. Of course, saving up the average deposit percentage takes time, meaning it’s no surprise that the average age of a first-time buyer is around 32 - and that’s broadly reflective for all of the UK. However, despite the deposit (and affordability) hurdles to overcome, the first-time buyer still represented 53% of all home purchase loans in 2023.

(Source: *Halifax, First-Time Buyer report, January 2024)

Bank of Mum & Dad

We recognise that for a sizeable number, it’s not going to be an option, but for those who can help, this is what 2023 brought about:

·?????? The Bank of Mum & Dad supported 318,400 property purchases.

·?????? The average gift (or loan) was over ￡25,000, equating to ￡8.1bn of support.

·?????? This resulted in over half of those under 35 who recently bought a home receiving financial help.

(Source: L&G, 2023 Bank of Mum and Dad research, November 2023 release)

Within this mix, there’s also the support from the Grandparents.? They, too, may delve into their savings & investments (or even access their property wealth) to see their grandchildren benefit within their lifetime and possibly when financial support is most needed.

Talk to Me.

Get in touch if you’d like me to assist with your application, factor in any financial support from parents (or grandparents), and assess how you stand on meeting the lender’s affordability criteria—which vary among lenders.

I’d also consider the various government schemes offered and weigh them against the alternatives in the general marketplace.?

You may not have found a property, but you wish to know where you stand before you start looking.? You may wonder if your accumulated savings are enough to start, and the low-deposit mortgages can help you get on the property ladder.

Tailored Advice.

Aside from all this, you can prepare ahead; it would be beneficial if you could obtain your credit score. Your pro

Here’s one service you could try that brings together your results across most rating agencies: Checkmyfile* - Tel: 0800 086 9360 - www.checkmyfile.com

* The service promoted here is not part of The Openwork Partnership offering.

If this route interests you (or a family member), don't hesitate to contact me to learn more.

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