First time buyers are one of the main purchasers of new build houses. The reasons are straightforward – there have been a number of Government initiatives to help them buy this type of property and the property is also ready to move in to from day one.
These points can make new builds more attractive from an affordability point of view when compared with other forms of property, such as one which may need some refurbishment or renovation.
The other advantage of new build houses and flats are that they are built to the latest standards and have eco-friendly credentials to help save on fuel bills. There may also be the option of choosing some of the fixtures and fittings to personalise the house or flat.
Intermediaries have a key role to play with helping new buyers as they have access to the latest mortgage products and criteria to help first time buyers. Intermediaries can also help with checking the amount they can afford to borrow and sustain payments going forward with the associated costs of running a household.
There are a number of situations specific to first time buyers when looking at how they can get onto the housing ladder.
Initially, saving for a deposit can be the first challenge to overcome. However, a mortgage with a 95% LTV on new build properties can keep the amount of deposit required to a minimum. If this can’t be met then family gifted deposits are a way of the first time buyer getting some assistance.
When buying a new property, particularly if buying off plan, there is often a long period of time between putting down a reservation fee to the house being completed and ready to move into. This is why it’s useful to have mortgage offers valid for an extended period. At Leek United our new build offers are for 6 months, a 3 month extension can be considered when there have been delays in the build.
First time buyers can also keep the ongoing repayments lower by extending the term of the mortgage. It's now quite common for lenders to offer terms up to forty years and this can be set to tie in with future financial landmarks such as to tie in with their anticipated retirement age.
For new buyers and new properties, lenders often offer products with no valuation fees and cashbacks to help keep initial outgoings as low as possible during the purchase as this can be an expensive time to first time buyers.
With Government initiatives and lenders providing a products and criteria specifically for them, new build houses and flats could be an ideal choice for first time buyers starting out on their property ownership journey.
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