Easing the Burden for First Time Home Buyers in the UK

house buying

The global economic situation is strenuous enough and this is visible even in the property market in the United Kingdom.

The financial life for buyers in the UK who are trying to acquire homes for the first time is more difficult than ever before. With thousands of pounds required for mortgage deposits, little saving returns and rental costs that take up big chunks of money monthly, the chances of owning homes seem bleak for many aspiring dreamers.

The housing market isn’t so vibrant at the moment and this is evident even in many UK property news stories.

Housing experts though, tend to see a light at the end of the tunnel as they show high and positive expectations with rising house prices in the years to come. Recent predictions from estate agents suggest that UK property prices will go up by 19.3% as 2019 ends. If interest and wages on savings do not manage to keep pace then affordability shall continue to be a concern for those seeking to buy homes for the first time. There are many buyers securing mortgages in the UK every day as a first step in climbing the property ladder where many sometimes miss the first step.

Experts say that buyers can make this decision easier through good preparation. A buyer should be able to find the home they want within a span of one week. A realistic buyer must look for a suitable home, within their budget and in a short while. Buyers should throw themselves into the process and focus totally. The search should be hard and precise and not just light strolling on weekends in prospect areas. One is advised to borrow on their credit card then pay back for an even better credit score which results in a better assessment of mortgage applications. 

Buyers must to play nice with estate agents because a huge part of the success of the home search relies on them. An easier to work with buyer who is more cooperative and flexible is in a better position to have more consideration from an online estate agent and will be informed of better houses that are competitively priced in the market as soon as they pop up, these new breed of estate agent offer lower fees and have lower overheads and a more balanced outlook on the market. They want buyers who are easy, clear and precise on their dream house, enthusiastic, involved and decent. Getting on the electoral roll is yet another way for buyers in the UK to have better credit scores for mortgage scores. 

The ability to vote and having a permanent address helps one to earn points on their score. This affects younger adults who move around a lot living in rented accommodation as students. Before starting the house hunt, a buyer is advised to carry out a simple check on their credit file six months earlier. One is advised to do this with all three agencies for credit reference, these being Call Credit, Equifax and Experian. By doing this before going through with mortgage applications, a buyer has ample time to correct any omissions or inaccuracies in their credit file.

Buying a property can be stressful. However, it does not have to be difficult.


Buying a property or a home is a long and complex process. Typically, it will involve the following steps:


  1. Borrowing


You should get in touch with a mortgage broker and see how much you can actually borrow. They will help you scour the market for the best deals available and show you how to maximise your borrowing power.


  1. Define Your Criteria


The next step involves deciding the exact kind of property you are looking for. Think about how many bedrooms are required and whether you need a garden and parking. If you are buying a flat, decide whether you want a leasehold or a freehold. You should also pick areas you want to live in. Also consider the property tax banding.


  1. Start Searching


Scan local newspapers and the internet. You can also register with professional estate agents. In case you spot a property you are interested in, arrange a viewing through your agent.


  1. Visit Properties


Go out of your way to check out some properties. It is unlikely that you will find the best home straight away. However, keep going and wait until you find something that is worth your investment.


  1. Make an Offer


Once you come across something you love, make an offer. However, first ask your estate agent to find out as much as they can about the property. Most buyers make offers that are below the initial asking price. Therefore, start low and use your agent to negotiate until you reach a satisfactory price. If the property is worth the price the seller is asking, you can offer the full amount.


  1. Acceptance


In case the seller accepts your offer, ask your agent to get the home off the market. Then, hire a trustworthy solicitor.


  1. Arrange the Mortgage


At this stage, you need to sort out your mortgage application. Here, you need to provide a lot of paperwork detailing your outgoings and income.


  1. Paperwork


Ask your solicitor to draw up a contract. The solicitor will also send a list of questions to the seller, including questionnaires asking the fittings and fixtures they will leave on vacating the property.


  1. Surveys


After you agree to the mortgage in principle, your lender will contract a surveyor to check out the property and value it. You can also hire your own surveyor for a more comprehensive look.

Go through the survey and find out everything you can about the property. Renegotiate the price with the seller if a lot of work has to be done to fit up the place. If it is too problematic, pull out of the deal before you incur more costs. However, if you are happy with the new home, arrange with your estate agent to gain access to the property.


  1. Exchange of Contracts


When your conveyer completes all necessary checks, you will sign a contract that will legally commit you to the purchase. It is at this point that you will be required to pay a deposit on the property (which is usually between 5 to 10 percent of the agreed upon price).


  1. Plan to Move In


Once everything is finalised, get a removal van and start planning to move into your new home.

Stamp Duty Overhaul in Autumn Statement

There are many examples of hyperbole in uk property news stories, but none more bandied about than the ‘sweeping’ or ‘grand’ reforms of stamp duty that were outlined in the Autumn Statement, the last before the general election. So what exactly do these reforms mean for the man on the street? Are they really so ‘sweeping’ or ‘grand’? 

new budget 2014

Impact of the new system

The surprising truth is that the talk of how impactful these changes are is, for once, not overstated. The fact of the matter is that for 98% of house buyers, stamp duty will be less than it was under the old system.

The new system:

Buyers of houses below the threshold of £125,000 will not have to pay any stamp duty at all. Between £125,000 and £250,000 the rate will be 2%, rising to 5% for purchases of between £250,000 and £925,000. From £925,000 to £1.5M the stamp duty rises to 10%, and above £1.5M the rate is 12%. 

Benefits of the new stamp duty system:

First of all, the new system is said to be fairer: it is a graduated system much like that used to calculate income tax, and gets rid of the distortion to the market created by having huge jumps up from one band to the next. 
This new system is designed to help those at the lower end of the system and first time buyers to buy a house in an age when it is difficult to even raise a deposit. The lack of stamp duty on purchases under £125K will go some way towards helping those buyers, and thereby reducing the unfairness within the current housing market.
This new system also reflects the dramatic change in house prices since the last system was established, and it is said that it will stop uncertainty at the top end of the market after discussion of Labour’s proposed ‘Mansion Tax’ unsettled the top-tier property business.

Criticism of new stamp duty system

Many have said that George Osborne was simply spiking Labour’s guns, with this helping hand to ordinary middle class families and swingeing cuts to the super-rich, and that this is just a cynical pre-election pandering to the electorate. These policies have been attacked from both sides of the fence. On one side are the rich, who are annoyed by the huge extra payments they have to make in stamp duty in order to fund, in effect, the cuts to stamp duty further down the tree. This also goes against the core conservative and free-market values of a lot of the Conservative party, who believe in the sort of ‘trickle down’ economics that, arguably, have just succeeded in making the rich richer and the poor poorer. 
On the other side of the fence, while they welcome the help for first time buyers and the bottom end of the property market, many feel that the stamp duty tax on the super-rich is not enough. Those in favour of further redistribution of wealth, and equality, feel that tax on the obscenely wealthy should be higher across the board, and not linked just to property. The fact is that due to the crazy inflation of house prices in London and other economic centres, even £2.5 million will no longer buy a property as large as one might imagine. Sometimes, it will buy no more than a one or two bedroom flat.
Other critics have stated that this stamp duty reform will boost the market, and could cause an unsustainable rise in house prices. This would in fact have the opposite effect than that intended for ordinary buyers across the country. George Osborne has denied these claims.

Wherever your political allegiances lie, it is clear that stamp duty reform will have a big impact on house buyers.