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There’s no feeling quite like buying your very first home. Having a place to call your own is something many people aspire to – and, with the growing number of options available to you as a first-time buyer, it might be more achievable than you think.
There’s no doubt that taking that first step onto the property ladder is an important milestone, and you may be feeling a little unsure about how to navigate the buying process. This guide has been designed to support you through the journey of being a first-time buyer, and help you on your way to collecting the keys for your very first home.
When buying your first home, there are a number of things you need to consider. It’s a good idea to make a check-list of the areas you need to understand before taking that first step onto the property ladder. The list below is a good starting point:
A deposit is the amount of money you have already saved to put towards your new home. As a general rule, the higher your deposit, the better the mortgage rate you will be offered by lenders. Plus, the more money you put down as a deposit, the less you will have to pay back.
Stamp duty land tax (SDLT) is a fixed sum of money paid upon purchase of a freehold property or land. In simple terms, this means you have to pay a percentage of the cost of your home to the government, as a one-off sum. The rate of stamp duty you’ll pay depends on the value of your home, and where in the UK you choose to buy.
In Wales, the tax is known as the land transaction tax (LLT) and in Scotland as the land and buildings transaction tax (LBTT).
On 17th October 2022, the Government announced that September’s stamp duty tax cut is now a temporary holiday, meaning that homebuyers across England have until 31st March 2025 to take advantage of the current reduction.
Read below to find out how this affects first-time buyers:
In England, when buying your first home, you will not pay stamp duty on property costing up to £425,000 in England. Properties above this price do not attract first-time buyer relief, so you will pay the tax due.
In Scotland, you will not pay stamp duty on any property up to £175,000. If the price is above this, the amount you pay will depend on where you live. You will pay stamp duty on property costing more than £175,000, according to that country’s standard rates.
There is no first-time buyer relief in Wales.
If you are buying a home with somebody else then this has to be a first home for both of you, in order for you to be considered first-time buyers.
To handle the legal side of your purchase, you will need to hire a solicitor or licensed conveyancer. They will handle all of your contracts, give legal advice, carry out local searches, handle the Land Registry and transfer your funds for the purchase. Make sure to choose your solicitor carefully, using recommendations where possible, and ensure to maintain good communication with them throughout the buying process.
The cost of moving all of the furniture and belongings you’ve accumulated over the years is something many people overlook when buying their first home. If you’ve never moved before, or have been living in the same home for a while, this may seem like an overwhelming task. Luckily, there are thousands of moving companies across the UK that are dedicated to making this process as streamlined and stress-free as possible. The costs involved will depend on how much you need to move and how far you are moving, so it is a good idea to do some research ahead of time to find the best moving company to suit you.
There are a huge number of mortgage options available to first-time buyers, and with the growing number of government initiatives designed to help you get onto the property ladder, there’s never been a better time to buy. Some people may choose to hire a mortgage advisor in order to guide them through the many products available to them, while some simply choose to do their own research.
As a starting point, why not read our mortgages guide for a better idea of the options available? For further mortgage advice, New Homes Mortgage Helpline offer a no-obligation service and will be able to advise you on your affordability as well as the various mortgage options available.
Your mortgage provider will require you to take out buildings insurance as a condition of your mortgage. This is to cover you against any structural issues your property may have, should you need to make repairs. Although not compulsory, contents insurance is generally considered a good idea, to safeguard your possessions. Peace of mind is important for anyone buying a home, but perhaps even more so for first-time buyers, so although it’s an extra expense, contents insurance may prove valuable should you ever need to replace your belongings.
Council Tax is a fee that your local council charges for the services it provides, like road repairs, rubbish collection and street lighting. Council tax is payable according to the valuation band for your home, the charges applied to each band by your local authority, and whether or not you are eligible for any discounts. The tax is most commonly paid in monthly instalments, so it is worth checking how much you are likely to pay when you move into your new home.
Applications for the Help to Buy scheme are now closed in England and Scotland. In England, buyers who have already reserved a home using the scheme have until Friday 31st March 2023 to complete their purchase.
Those purchasing a property in Wales can still benefit from the scheme. Help to Buy - Wales has been extended through to 31st March 2025, with the date of 19th December 2025 set as the final date for legal and practical completion. For further information, see Help to Buy - Wales.
A first-time buyer is a person (or persons) who is purchasing a home and has never owned a property either in the UK or abroad – whether that’s freehold or leasehold. The purchased property must also be your main/only residence.
You are only classed as a first-time buyer if you have not invested in any residential properties in the UK or anywhere else before. This means you cannot have owned a freehold or leasehold home, a commercial property with any kind of living quarters attached, or even an inherited home.
Buyers purchasing their first home are able to claim a discount (or relief) on the stamp duty payment due upon completion. If the home you are purchasing is valued at £425,000 or lower, you will not pay any stamp duty. However, if the property is valued between £425,001 and £625,000, you will pay 5% on the portion that falls between those two numbers. For example, if the home you’re buying is worth £500,000, you would pay nothing on the first £425,000. You would, however, pay 5% on the remaining £75,000, which would be £3,750.
You can either apply directly with a bank or building society, or you can enlist the help of an independent mortgage advisor to help you understand the range of mortgage products on the market.
Most mortgage providers ask for a deposit of somewhere between 5% and 10%, but this will depend on who your product is with. There are also mortgages, such as the Track Record mortgage, that are aimed at first-time buyers struggling to save up a deposit, and will help prospective homeowners get onto the property ladder.
Depending on your personal circumstances and where you are looking to buy, there are a variety of schemes that could help a first-time buyer purchase a new-build home. From the deposit-free Track Record mortgage product to the First Homes scheme, there so many schemes open to first-time buyers.
Here, you’ll find a brief introduction to the range of mortgage options available to you.
This simple guide can help you understand more about Stamp Duty Land Tax.
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