Expert Guest Article 
James Keable Mortgage Services Director Capital Private Finance It is not easy being a first time buyer these days. Even allowing for a moderate correction this year, prices are historically high and mortgage rates are somewhat higher than they have been for the last few years. The Help to Buy Scheme has come to an end and the bank of mum and dad has been feeling the squeeze with the cost of living crisis, making everyone’s world a little bit harder.
So why would now be a good time to take a first step onto the property ladder?
Firstly, property in recent times, has been one of the best medium to long term investments and although I should give the usual disclaimer that past performance is no guarantee of future success, if you look at the graph of property value over the last 30 years, you will see an almost unwavering ascent at a steep angle.
We know there are some aspiring buy-to-let property moguls out there, but in reality, most people first property purchase will be the home they will be living in.
There is nothing like that first time buyer feeling when the agent calls to let you know that the purchase it’s being completed, then picking up the keys, and finally standing in a space that is all yours for the first time, that’s something people do not forget.
How to get on the property ladder?
There are some good mortgage deals around right now too. After the scares to the financial markets of late last year that caused a real dearth of mortgage products and skyrocketing rates above 6%, things have calmed right down. Rates around 4% are much more normal, and some are even lower when there is the opportunity of adding a decent deposit.
Even though the Help to Buy Scheme has now ended, it is important to know that there are still several options for those that need a helping hand:
- Deposit unlock, is another way to buy New Build property with only a 5% Deposit (which is not often possible on the standard lending market). The Home Builders Federation developed this scheme and several well-known lenders support it. A great option if a new home is what you are looking for.
- The Mortgage Guarantee Scheme is a way that the government helps those with only a 5% deposit to be more likely to be accepted by a lender. The government indemnifies the lender against any possible losses in relation to what is perceived to be, more “risky” lending to those with smaller deposits. It just means that they are more likely to say yes to your application.
- First Homes Scheme give local first-time buyers and key workers (Doctors, Nurses, Teachers etc.) a 30-50% discount on new-build homes in developments that sign up to the scheme. When the property is sold again, the discount will pass on to the next buyer. There are caveats to this and maximum purchase prices apply.
- Shared Ownership is one of the most popular schemes, with a variety of different options available:
- It allows to buy a percentage of the property alongside a housing association
- Gives the option of increasing the owned percentage as the ability to do so increases.
- Normally, there will be a rental fee to cover the part is not owned. Details can vary from scheme to scheme.
Get expert mortgage and protection advice tailored to you
The experts at Capital Private Finance have access to a vast array of mortgage products and can access a range of specialist products not available to all brokers. This means that if it is possible to arrange finance, then we should be able to help you achieve your goals.
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