First Time Buyers
A person is generally classified as a first-time-buyer if they’re buying their only or main residence, and have never owned a freehold or have a leasehold interest in a residential property in the UK or abroad.
A mortgage is a loan taken out to buy property or land from a lender such as a bank or building society. Most run for 25 years, but the term can be shorter or longer.
The loan is ‘secured’ against the value of your home until it’s paid off.
If you can’t keep up your repayments, the lender can repossess (take back) your home and sell it so they get their money back.
How much deposit does a first time buyer need?
You’ll need to save up to 5% or more of the purchase price as a deposit, and borrow the rest of the money (the mortgage) from a lender such as a bank or building society. The loan is ‘secured’ against the value of your home until it’s paid off.
Are there any schemes for first time buyers?
The government First Homes scheme was announced in June 2021 and aims to help first-time buyers in England purchase their first home. The scheme will see a number of new-build homes go on the market and be sold at a discount to eligible first-time buyers.
The help to buy scheme is also available for new Homes.
What does freehold/leasehold mean?
If you want to buy a house, it’s likely you’ll buy the freehold. This means you own the property and the land it sits on.
If you’re buying a flat, you’ll be buying leasehold, or buying into a share of the freehold. You don’t own the land the property sits on, but you hold a lease detailing your rights (and restrictions) to its use. If you have a share of the freehold, You are effectively the freeholder along with the other people who own a share- the other leaseholders. The freeholders generally have a management meeting once a quarter to decide on any issues with the common areas and set the amount which is paid into the fund to make repairs in the future. Each person has a single vote in line with their shareholding.
How long does it take to buy a house?
From having an offer accepted to exchanging contracts is generally around 12 weeks. The mortgage company will ask you to send proofs and payslips to be satisfied you can afford the property. You will pay to have a valuation done for the mortgage company (and possibly one for your own benefit). The solicitors have to establish that the seller has the right to sell the property and that the land registry documents support the rights of the seller to sell it. Any works which have been carried out on the property are checked to ensure they comply with planning and building regulations. The solicitor will check with the local authority that there are no plans for the location to be changed (the searches).
Once all these items are produced, verified, and the solicitor is satisfied, the sale can exchange and you can discuss a completion date with the seller.