Posts tagged ‘first-time buyer’
Merry Christmas … plus the property year in review
This is a legacy post from the findaproperty.com blog which is now maintained as an archive within the Zoopla blog. Links have been preserved.
As 2011 draws to a close we’d like to wish you all a merry Christmas and a healthy and happy new year.
Property festive: We wish you a merry Christmas
Here at FindaProperty.com we’re also pausing to reflect on what’s been a very busy year on the property front and to pick out some of the top stories of the year.
First-time buyers
The endangered species of the property market, first-time buyers faced a tough year on the home front. Even though interest rates remained at historic lows and prices held steady or in many cases came down, those looking to take that first tentative step onto the property ladder and buy a home were rarely seen.
The Council of Mortgage Lenders (CML) reported there are now 200,000 FTBs a year compared with around 500,000 before 2008. And it’s a story of affordability. The CML says the average deposit for a first-buyer home is now 20%, which means finding a national average deposit of at least £25,000, or significantly more than that in London and some other cities.
Housing minister Grant Shapps recognised the problems faced by first-time buyers when he launched the goverment’s new housing strategy earlier this year, saying an “entire generation” have been blocked from the housing ladder and pledging to put this group at the centre of Government efforts to get the property market moving again.
Renting
The UK’s move towards being a nation of renters, rather than buyers, was probably the biggest single property story of the year.
FindaProperty.com research found the typical national monthly rent reached £890 in October – the highest average we’ve ever recorded for a home to rent- which accounted for 46 % of average monthly household net earnings. Renting was further thrust into the spotlight by homelessness charity Shelter and their disturbing landmark report into the affordability of the private rental sector.
Latest FindaProperty.com figures for December show rents are down slightly – partly down to a seasonal change, but this adjustment doesn’t change the fact that more of us are expecting to stay in our rented homes for longer. Recent FindaProperty.com research found 26 per cent of home searchers had “no issue” with renting long term.
House prices
House prices generally held steady in 2011. FindaProperty.com’s November asking price data showed the average price of a home at £215,385, 0.5% down on the previous month, but still 0.7% higher than a year ago. London’s status as an international city meant it operated as an independent market and the latest figures showed prices continued to increase there – by 0.7% last month, bringing the average price of a London home to £453,956.
First-time buyer blog: Do we go over the 0% stamp duty threshold?
This is a legacy post from the findaproperty.com blog which is now maintained as an archive within the Zoopla blog. Links have been preserved.
For first time buyers, any property under £250,000 is exempt from stamp duty tax. This is only if you have never owned a house or flat anywhere in the UK or the rest of the world. But it will only apply until March 24 2012. Since we have begun our search for our first home, we have taken this for granted and restricted our budget to anything under £250,000.
It’s fair to say we have not been particularly successful in our home search to date. Yes, we were very cheeky in our first few offers – but the last property we saw really appealed to us. So we were a lot more realistic about our negotiations. Unfortunately, after talking to a roofer we were told that it needed a new roof. (as the majority of the Victorian terraces inReading do). Our final offer reflected the condition of the house. The last contact we had with the estate agent we were informed our offer was rejected, and the vendor had received a higher offer.
We felt quiet despondent at this point. We were very sorry to loose out on that last house, although we were not prepared to raise our final offer as we’d been told it needed at least £7,000 spending on it to improve the condition of the roof. As first time buyers, did we really want that hassle?
We are now looking at bigger properties, over the stamp duty threshold. Unfortunately, a good sized and good-condition property in Reading and surrounding areas is expensive. It’s an ideal location for commuters, as we are. Eventually, this will also be one of our biggest selling points when we come to move on.
We are weighing up the advantages and disadvantages of really stretching ourselves financially. So do we pay the 3% stamp duty tax for a property which is bigger, and is not “in need of modernisation”? We could be living in a larger property for longer, with more scope for improvements – this could mean less hassle and less expenditure in the long run with another potential move. Or, do we take advantage of the 0% and use the money we would put towards stamp duty tax on a property which is cheaper, but needs some work doing to it?
Already this process has been quite stressful, it really does take up an awful lot of your time. We’re certainly in no rush to go through it all again any time soon.
First-time buyer blog: Is there an art to making an offer, asks Emma?
This is a legacy post from the findaproperty.com blog which is now maintained as an archive within the Zoopla blog. Links have been preserved.
My boyfriend and I have now been looking for our first home since the end of May. We have had a couple of weekends off, so all in all we have spent seven Saturday’s looking.
As we have gained more experience we are now a bit more selective. The first three or four weeks we looked at anything and everything. This really helped us decide on what we would and wouldn’t compromise on. It also gave us a good idea on how prices vary. For example, we will compromise on walking straight into the living room but won’t compromise on having the bathroom downstairs.
When we found a property we both liked, we booked a second viewing for later that week. The second viewing is a completely different experience. It’s all very practical, rather than the initial “oooh, what a lovely house”. Having a better look at the walls, floors, ceilings, the roofspace and the condition of the exterior.
We still liked the house, and agreed to make an offer. We had done a lot of research on selling prices of similar houses in the area, as well as on the same street.
On the day of making our first offer I actually felt quite nervous. Our initial offer was low, and to be completely honest I would have been very surprised indeed if it was accepted. Turns out, it wasn’t. So if I knew in the back of my mind that our offer wasn’t going to be expected, why did I feel so disappointed? We gave it more thought, and upped our offer. Rejected again. Oh.
We were entering into the unknown. I felt nervous, and didn’t particularly enjoy this negotiation stage (or rather, lack of it). Two weeks on and we are still not in any negotiation with the vendors. In the meantime, we are continuing to look at other properties on the market.
To be continued….!
How I used the Royal Wedding to buy my first home, says guest blogger Jack Swain
This is a legacy post from the findaproperty.com blog which is now maintained as an archive within the Zoopla blog. Links have been preserved.
While the rest of the world gazed adoringly at Kate and Wills, I was falling head over heels for the flat I’d spent a year searching for.
At a time when the market is slow, the story of how I bought my first flat shows you can still get a bargain, if you’re prepared to look for it hard – especially at a time when other people aren’t.
First-time buyer Jack Swain outside his new West London home
As a first-time buyer looking for a two-bed flat in central London between £350,000 and £400,000, there were precious few properties matching my search. Every time a hopeful prospect appeared in my inbox, it had been snapped up by the time I phoned the agent.
Not that my agents, desperate to sell, made things any easier. One helpfully suggested I could turn a cupboard under the stairs into a “roomy” bedroom. I suspect even Harry Potter would have turned his nose up at this.
Several demoralizing months into the process, I thought I would have to compromise. A born and bred central Londoner, I was reluctant to move out to Zone 3, but it looked like a real possibility. It was that, or give up on my dream of renting out the second bedroom.
And then the Royal Wedding arrived. While people took the week off work to string up their bunting, I sat alone checking my property searches. And lo and behold: a flat just off Ladbroke Grove, not five minutes from Portobello Road, with two good-sized double bedrooms and a balcony overlooking a canal, popped up on my screen. It had previously been on the market at £425,000 – out of my price range – but was now reduced to £400,000.
As I picked up the phone, that familiar sinking feeling set in; no way was this still on the market. It turns out my agent was the only one still in the office that weekend – everyone else had taken a holiday. He was clearly relieved to take my call, and delighted to announce that no one else had even noticed the price reduction.
Corny as it sounds, it was love at first sight. Not unlike meeting that special someone, it just felt right. My offer of £388,000, based on comparables in the same block of flats, was accepted immediately. Two months later I had the keys to the flat.
My advice: stay ahead of the curve by making sure you’re always first in line, and if you can, do it when everyone else is looking the other way. You’d go the extra mile to find your perfect partner, so why not do the same for your perfect property?
Sell my home blog:It’s a tale of two-year mortgages, says Hannah
This is a legacy post from the findaproperty.com blog which is now maintained as an archive within the Zoopla blog. Links have been preserved.
Since my last post the bathroom and kitchen are now almost finished. There are a couple of skirting boards to paint and the wall needs a fresh lick, but apart from that we are nearly there.
When we purchased the flat five years ago, finances were a big issue. We were both concerned about the small wages we were earning and initially we were unable to secure the funds we needed from two banks. Luckily my boyfriend had some family money which meant we were able to eventually secure a loan.
It was important to us to have a two-year fixed rate mortgage as the original plan was to renovate and move on quickly. Being first-time buyers, the thought of tying ourselves into a longer term plan seemed completely alien to us!
Two years passed quickly and while the painting continued, we needed a new mortgage so moved to a 30-year repayment mortgage for another two-year fixed rate. The property value had increased and so had our wages but my boyfriend decided to go back to university so we extended the length of the mortgage to make the repayments smaller.
Although selling is on the horizon, we have just started a new two-year fixed rate interest-only mortgage with the same bank. When we took this decision interest rates had been at their lowest point for years and there had been much said about the jump they were about to take. We decided to renew the mortgage at a lower rate rather than stick with the variable payments we were making. We are hoping that when we move home the bank will be able to switch over the mortgage and increase it without too many extra penalty payments. Hopefully being a valid customer and always making repayments on time will count in our favour.
Our work and home life have changed dramatically over the past five years. We got married, changed jobs, went back to education, had holidays, not to mention had to cope with sky rocketing energy prices. All along though, we’ve kept focused on what we could afford each month. My parents were really helpful and full of good advice about mortgages, but the main point they had was that you don’t need to be able to pay off the whole mortgage in 25 or 30 years. When you move from property to property your earnings should increase so when you retire to your small bungalow by the sea, you will be able to downsize and pay off everything in full. Well that’s the plan!
Solicitors costs were also a big worry when we started to budget for the property purchase. Here we had another lucky break as a friend of mine had recently qualified as a property solicitor and talked us through the complicated bits. As the move gets closer, I am now worried that having to deal with solicitors for the seller of our new property, solicitors for the buyer of our old property and my own solicitor will be slightly more complicated. Maybe it’s time to de-camp to the seaside now.
New time: finishing touches and estate agents
