First Time Buyers

Advice for buying your first home

With a fluctuating property market, first time buyers are finding it increasingly difficult to get on the property ladder.

Making what is probably the biggest investment of your life so far is no easy task, and there are many potential pitfalls that can put off first time buyers from ever purchasing their own home.

The legal costs that need to be considered when buying your first property are:

• a deposit
• stamp duty land tax (only payable on properties worth over £250,000 for first time buyers until 25 March 2012)
• surveyors’ fees
• lenders fees and charges
• land registry fees
• removals/moving in charges.

Can I get help with buying a home?

There are various options, including government schemes, open to buyers looking for some assistance in purchasing a home for the first time.

If you:

• earn less than £60,000 (per household)
• are renting a property from the council or housing association
• are a ‘key worker’ in the public sector, e.g. a teacher, a nurse, and work in the area
• have never owned a home before

then you will be eligible for one of the government’s HomeBuy schemes. This means you may be able to get a ‘HomeBuy Direct’ loan towards a (newly-built) home’s purchase price that is fee-free for five years.

You may also be eligible for the ‘New Build HomeBuy’ scheme, which allows you to share ownership of a home with a housing association.

You decide how big your share will be (anywhere between 25% and 75% of the home’s value) and the housing association will make up the rest. You then pay rent on the landlord’s share, up to a rate of 3%.

If you do not qualify for a government scheme, you may want to consider splitting costs by buying a home with others, such as family members, a partner or friend. We have more information on shared ownership available.

What kind of mortgage should I get?

There are two main types of mortgage: ‘repayment’ and ‘interest only’.

Repayment mortgages require you to make monthly repayments for an agreed period until the amount of the loan and the interest have been paid back in full.

On interest only mortgages, your monthly repayments only cover the interest on your loan. The rest is paid off by a separate savings or investment plan you pay into.

You will also need to consider which type of interest rate deal to go with. The most common deals are:

• Fixed rate – where you pay a fixed rate of interest for a set period, so you know exactly how much you’ll be paying each month.
• Tracker – where the rate is linked to the Bank of England’s base rate, currently at 0.5%. The actual rate is usually a bit higher but is nonetheless linked to the base rate.
• Standard variable rate (SVR) – where your payments are set by the lender’s standard interest rate and often change with the BoE base rate.

When you make an offer on a home you will need to think about whom to employ to carry out the conveyancing of the property. Please see our full conveyancing guide for more information.

In need of advice about restrictive covenants?

Restrictive covenant insurance is also known as restrictive covenant indemnity insurance or restrictive covenant contingency insurance.

Just the facts about conveyancing solicitors

Conveyancing is the name for the legal process involved in buying or selling land and property anywhere in the UK. It can be a complicated process.

Learn the difference between freehold and leasehold

Freehold and leasehold are two different types of property ownership in the UK. Anyone considering buying property must know the difference.