Although there are is great deal of uncertainty in the country due to indecision in Westminster over the “B” word, now is possibly one of the best times for first time buyers to take that leap into home-ownership.
Consider the current base interest rate at the Bank of England; although it is not as low as it was in 2016/2017 it is still a very low 0.75%, and this low rate helps to determine the rates mortgagees are then willing to offer on their mortgage products. If the Base Rate increases it stands to reason that mortgagees will follow suit and increase their interest rates accordingly. Obviously no one knows what may happen to the economy over the next few years, but if you delay the decision to buy then interest rates could rise to a point that the amount you can borrow becomes severely reduced. If however you take that leap and find a mortgage product with a low interest rate coupled with a long fixed rate period you will be future proofing yourself; at least in the short term, as you will be locked into that rate irrespective of what may or may not happen to the economy.
There are a number of government backed incentives that can assist in the process of making that first step onto the property ladder and there is no guarantee that these will continue to be available in the years to come as new government invariably means new priorities. I strongly recommend any first time buyer considers either a Help to Buy ISA or a Lifetime ISA as both reward you for saving money towards the purchase of your first home. Without going into much details both will provide you bonus payment from the government as a percentage of the amount you save; the more you save the greater the reward. The Help to Buy ISA will provide you a bonus payment on closure of the ISA based on the total saved and the Lifetime ISA will be a bonus paid into the ISA every time you deposit money into it. Even if you are not ready to purchase immediately both of these products should be something to consider now based on the premise, the more you save the greater the reward, after all who doesn’t like free money!!
Another option available is the Help to Buy Mortgage/Equity Loan which is a 2nd mortgage on the property with an interest free period after which interest will become payable; usually capped, until the loan is repaid. This is the option for those first time buyers who wish to immediately get one foot on the property ladder rather than wait and save as would be the case with the aforementioned ISAs.
At WBW Solicitors, we are able to offer all the necessary asistance from a legal and conveyancing perspective having been in business since 1831. If you would like to know more information on first time property purchases, please contact Damien Pedley, a Trainee Licensed Conveyancer in the Property Department at WBW Solicitors in Newton Abbot, by telephone on 01626 202387 or by email firstname.lastname@example.org. WBW are also able to offer assistance in obtaining the correct mortgage and ISA products based on your financial situation and your future needs through WBW Mortgages (tel: 01803500544) and WBW Financial Planners (01626202420 or 07464968455). WBW has offices in Newton Abbot, Torquay, Paignton, Bovey Tracey, Exeter, Launceston, Honiton Exmouth and Sidmouth.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.