Tips for first time buyers who are more desperate than ever for a home of their own

The number of first-time buyers registering with estate agents and portals has shot up since the housing market reopened. It seems that the coronavirus crisis has not been a significant deterrent to those hoping to climb on the property ladder.

The Countrywide estate agency group says that 44 per cent of would-be buyers in April were first-timers compared to 24 per cent in the same month last year. A survey by Rightmove during lockdown found that 94 per cent of first-time buyers were determined to continue with their plans to purchase a home.

Analysis by Rightmove shows how much they may need to save for a deposit. The average asking price of a typical first-time buyer property in England is £241,891, which is two per cent higher than this time last year.

So, the amount needed for a 10 per cent deposit is now £24,189, jumping to £36,284 if a 15 per cent deposit is required. Yorkshire is still one of the least expensive regions with the average first-time buyer deposit standing at £12,978.

Rightmove data on property prices in 20 English cities reveals that Bradford is most accessible with an average 10 per cent deposit of £8,995. The most expensive is London at £47,757.

In Leeds, the average 10 per cent deposit for a first home is £13,899. In Sheffield it is £12,972 and in Hull it is £9,759.

Rightmove’s commercial director and housing market analyst Miles Shipside says those looking for a bargain may be disappointed: “On the whole asking prices of all first-time buyer properties up for sale have been holding up.

“There will, of course, be some sellers who need to sell quickly and may be willing to negotiate on price. However, where demand is outstripping supply and it’s an attractive property in a desirable location then an offer closer to the asking price will have a better chance of being accepted.”

Lenders will look at your credit history and will look for debts and missed payments. They also like to see proof that you can repay responsibly. So it can help to spend on a credit card but pay it back in full each month.

They scrutinise bank statements and outgoings so cut back on anything that looks like a luxury. You should also ensure that you are on the electoral roll.

A deposit is a must and most lenders want at least 10 per cent and proof of ability to meet mortgage repayments.

Andrew Milnes, Property Post columnist and head of the Mortgage Advice Bureau in Bingley, says that while lenders are cautious and may also look at job security, the outlook is positive for first-time buyers.

“You can still get a mortgage with an interest rate under two per cent if you have a 10 per cent deposit and there are a handful of deals for those who only have a five per cent deposit, although the interest rate for these is higher.”

The Halifax say that if you have been furloughed, the conditions remain largely the same for those applying for mortgages. To get the best deals you can look at comparison websites or consult an independent mortgage advisor. The latter charge a fee but the best are worth it as they will find good deals and help with paperwork.

Here are some other tips for would-be first-time buyers:

*Think ahead. It’s expensive to move so that fashionable city centre apartment may not be the best choice if you only plan to live there for a couple of years.

If you can’t afford to buy in your favourite location than be prepared to look at up-and-coming areas on the outskirts. For example, first-time buyers struggle to buy in property hotspots such as Ilkley where a one-bedroom flat is at least £150,000 but in nearby Silsden you can still buy a two-bedroom terraced house for £125,000.

*Don’t be too fussy about the decor, because as long as the property is structurally sound you can redecorate and replace

dated kitchens and bathrooms.

*The Help to Buy equity loan scheme is still available on new-build homes. The Government lends you up to 20 per cent of the cost of your newly-built home, so you only need a five per cent cash deposit and a 75 per cent mortgage to make up the rest. You won’t be charged fees on the 20 per cent loan for the first five years of owning your home. The equity loan doesn’t have to be paid back until the end of your mortgage term or when you sell your property.

*You can use a government Lifetime ISA to save for your first home. You must be 18 or over but under 40 to open one and can put in up to £4,000 each year, until you’re 50. The government will add a 25 per cent bonus to your savings, up to a maximum of £1,000 per year.

It’s generous but you can only withdraw money and enjoy your bonus if you are buying your first home, aged 60 or over or terminally ill with less than 12 months to live

You pay a withdrawal charge if you take out cash for any other reason and your account is stripped of the government bonus.

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