First time buyers on a 12 year high

First-time buyer numbers have soared to a 12-year high, reaching a level last seen before the financial crisis struck.

A total of 35,010 mortgages were advanced to people buying their first home in August – the highest monthly total since August 2007, according to UK Finance.

The typical first-time buyer borrowed £175,361, the equivalent of 80% of their property’s value.

Although the sum was an average of 3.52 times their pay, close to record-low interest rates meant monthly mortgage payments accounted for just 17.1% of their total household income.

The data from UK Finance supports Zoopla research which found that more than a third (36%) of all property purchases in 2018 were made by first-time buyers and that numbers were up by a huge 85% since 2010.

Buying a home for the first time can be daunting and expensive, which is why it’s important to get fully up to speed before you start your property search. Once your name is on the property deeds, you’ll benefit from potential equity gains, you can decorate how you like and of course you’ll always have something to call your own.

Source: Zoopla property News

For property investment in the UK from start to finish, Please Contact me

Dennis Bebo – MSC, BSC, DEA, CeMAP

TA DenEco Consultancy – www.deneco.co.uk

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Property Purchase: What exactly is gazumping

The term gazumping is often use by the media but generally don’t paint a full picture of what actually happens and as such many often find it surprising and confusing to understand.

Gazumping is where a property sale has been agreed but contract not yet exchanged and a third party comes along and offers more – where a third party ‘gazumps’ the original buyer. Gazumping is a nightmare for the original buyer as they’ve no comeback against (even if a survey has been done) either of the other two parties. In other for it to happen the seller must have to accept the higher offer, although they don’t have to.

I have worked for  clients on cases where a seller received higher offers but stuck to the original because they felt it was the honourable thing to do or preferred the original buyer. Also I have worked on cases where gazumping saved the chain – the original buyer was not taking it seriously or experiencing delays in securing mortgage and the chain was about to fall through – the new buyer moved ahead quickly and the whole chain completed. Gazumping normally occurs more often in a rising housing market, but probably not as much as the media would have you believe.

For property investment in the UK from start to finish, Please Contact me

Dennis Bebo – MSC, BSC, DEA, CeMAP

TA DenEco Consultancy – www.deneco.co.uk

£2,000 can now get you into UK property ladder under shared ownership

The Government has announced changes to the shared ownership scheme which should make it easier for first-time buyers to get their own homes.

Housing Secretary Robert Jenrick has said that first-time buyers will be allowed to buy a stake of 10 per cent, which will then be upped in 1 pc increments.

Property photo

Housing Association tenants on the lowest incomes are now being given the chance to get onto the property ladder thanks to a new version of the shared ownership scheme.

Under current rules, Housing Association tenants renting a home worth £200,000 can’t buy a share of that property.

But with the new Right To Shared Ownership scheme, tenants will be able to buy an initial 10 pc stake worth £20,000, while paying subsidised rent on the remaining 90 pc of the property.

Under the new scheme tenants will be able to make up the 10 pc stake with a £2,000 deposit and an £18,000 mortgage.

Chief Executive of NAEA Propertymark, Mark Hayward, said: “Now that the measures on shared ownership have been confirmed, thousands of consumers will welcome the opportunity to increase their share of ownership more easily and to simplify the process by which they can sell their homes.

You can buy a home through shared ownership if your household earns £80,000 a year or less (or £90,000 a year or less in London) and any of the following apply:

  • you’re a first-time buyer
  • you used to own a home, but can’t afford to buy one now
  • you’re an existing shared owner

Source: Manchester Evening News

For property investment in the UK from start to finish, Please Contact me

Dennis Bebo – MSC, BSC, DEA, CeMAP

TA DenEco Consultancy – www.deneco.co.uk

I am a First Time Buyer. How do I choose the best Mortgage?

As a first time buyer, the property market and process can be very complicated and stressful. To most this might be the biggest purchase or investment they will have to make in their life, so getting it right is very important to avoid unnecessary risk and costly consequences.

The aim of this article is to make you understand the basics of mortgage as a first time buyer and how to get the best mortgage that meets your need and financial circumstance.

PIPA property photo

We will start with knowing what is a mortgage and the basic requirement for a mortgage application.

What is a Mortgage?

In basic terms, you take out a mortgage from a mortgage lender as a long term loan to make payments on a property.

The mortgage lender has the option of taking possession of the property and selling it on if the mortgage repayments aren’t made. This is so that the lender doesn’t lose money as they would be making it back from the property sale.
Any time you take out a mortgage, the loan is then split into two aspects. One of which is the interest , which is what the lender charges for lending the money. The other is the capital, which is the actual amount of money used to purchase the property.

How much can you borrow?

The actual amount you’re eligible to borrow will be determined by the cost of the property you wish to purchase and by how much money you make.

As a first time buyer, you can borrow up to 95% of the property value. It is advisable to have more percentage deposit if affordable to get the best rates available. Also there are considerable amount of fees to pay during and before completion.

There are even some lenders that will go to 100% – however more often than not, you will be made to pay over the odds for this and will most likely be made to purchase mortgage indemnity insurance in addition.mortgage-imagery-homes-made-from-twenty-pound-notesThere are some that will, in rare cases, lend over the 100% mark, although there will be circumstantial rules that must apply.

There is a general rule of thumb that you can borrow around three and a half times the amount you earn annually. The actual figures differ between different mortgage lenders.

A little secret: If you have a good credit history and a regular income then you are quite likely to be offered the finance relatively easily.

How to get the best UK Mortgage as a first time buyer?

Well it depends on your need and financial situation. As a first time buyer, you are likely to have some particular requirements.

You will probably have a very small deposit or possibly no deposit at all.

You may be having to push your budget to the limit just to afford a mortgage, but are determined to get a foot on the property ladder.

One thing that applies to almost all types of UK mortgage is whether you should choose a  fixed rate mortgage or one with a variable interest rate.

The best choice depends on your own circumstances and to an extent on interest rate levels at the time, but things to consider are:

  • Can you afford to have your payments go up each month? This could happen with a variable rate mortgage.
  • Are rates generally low at the moment? It could be a good time to get tied into a fixed rate mortgage.
  • Do you want the security of a fixed monthly payment for several years? Fixed rate periods from 1 – 10 years are available.
  • Are you having difficulty borrowing enough money? An interest only mortgage can mean lower monthly repayments ie you can borrow more against your salary. But there are drawbacks.

For property investment in the UK from start to finish, Please Contact me

Dennis Bebo – MSC, BSC, DEA, CeMAP

TA DenEco Consultancy – www.deneco.co.uk