Buying a home can be a daunting prospect, so leave it to us at Zoom995 to guide you as you go through the process. If you’re only just considering buying a property and are unsure whether it’s the right time, we’re here to tell you why right now is the perfect time to buy a home and get the most for your money.
The average price of a home fell in July 2019 in a sign it is shifting to a buyer’s market. According to Rightmove, the average asking price is now £308,692, down by £656 the previous month.
This is a drop of 0.2%, according to the Rightmove House Price Index, and is the first month on month decrease in 2019.
Estate agents now have more properties to sell than at any time since 2015. The abundance of choice can seem overwhelming for a potential buyer, but with plenty to pick from any buyer is bound to find their dream home. There’s especially no better time if you’re upsizing.
While you may sell your home for less than usual, you’re very likely to grab yourself a bargain and get the most for your money. You’ll be more likely to be able to negotiate, and if you lose the house there’s likely to be another similar home in the area for you to make an offer on instead.
The average time it takes to sell a property is 62 days, the slowest since 2013, leaving sellers across the country keen to seriously consider offers.
How has this happened?
According to experts, the housing market fundamentals have stayed stable in many parts of the country, however the current political climate (Brexit and a change in Prime Minister), means confidence has been lowered, causing some potential buyers and sellers to hesitate and ‘wait it out’.
For those confident enough to buy a house (there’s no reason not to be!), it’s the best time due to record employment rates, low-interest rates and good mortgage availability.
Boris Johnson also promised to slash stamp duty, so many buyers may wait in order to reap this benefit. However, with fewer buyers searching for homes, you’re more likely to snap up a bargain saving you even more money in the long run.
First time buyers
First time buyers will find no better time to buy a property. With no property to sell and so many sellers desperate to shift their home, a first time buyer completing a chain will be snapped up. It’s likely a first time buyer could easily offer far less from the asking price and still be successful.
First time buyers schemes
The Government has created Help to Buy schemes to help first time buyers purchase their own home. There’s no better time to get your very own home.
Help to Buy: ISA
The Help to Buy ISA pays first-time buyers a government bonus of 25% of their savings, up to £3,000. For example, save £200 a month and the Government will add £50. If you save £12,000 in your ISA the Government will give you the maximum £3,000, taking you to £15,000.
The Help to Buy ISA is available from a range of banks, building societies and credit unions. The accounts are available to each first time buyer, not each household. This means that if you’re planning to buy with your partner, for example, you could receive a government bonus of up to £6,000 towards your first home.
When you are close to buying your new property, you will need to instruct your solicitor or conveyancer to apply for your government bonus. Once they receive the government bonus, it will be added to the money you are putting towards your first home.
Help to Buy: Equity Loan
With a Help to Buy Equity Loan the Government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest.
You won’t be charged loan fees on the 20% loan for the first five years of owning your home.
If for example you bought a £200,000 home, the Government would loan £40,000 (20%), you could pay a £10,000 deposit (5%) and £150,000 (75%) would be loaned from a commercial mortgage lender.
If the home in the example above sold for £210,000, you’d get £168,000 (80%, from your mortgage and the cash deposit) and you’d pay back £42,000 on the loan (20%). You’d need to pay off your mortgage with your share of the money.
For those in London the Government will lend 40%.
If you can’t quite afford the mortgage on 100% of a home, Help to Buy Shared Ownership offers you the chance to buy a share of your home (between 25% and 75% of the home’s value) and pay rent on the remaining share. Later on, you could buy bigger shares when you can afford to.
You could buy a home through Help to Buy Shared Ownership in England if:
- your household earns £80,000 a year or less outside London, or your household earns £90,000 a year or less in London
- you are a first time buyer, you used to own a home but can’t afford to buy one now or are an existing shared owner looking to move
With Help to Buy: Shared Ownership you can buy a newly built home or an existing one through resale programmes from housing associations. You’ll need to take out a mortgage to pay for your share of the home’s purchase price, or fund this through your savings. Shared Ownership properties are always leasehold.
Only military personnel will be given priority over other groups through government funded shared ownership schemes. However, councils with their own shared ownership home-building programmes may have some priority groups, based on local housing needs.
All the above information on the Government’s Help to Buy schemes comes from https://www.helptobuy.gov.uk/ which you can go to for more details.
While many may choose to see if Prime Minister Boris Johnson will lower stamp duty, there is still no better time to buy your very own home as a first time buyer. Stamp duty was reduced in November 2017 for first time buyers, helping them save thousands of pounds as they step onto the housing ladder. This has always been one of the biggest hurdles in buying a first home, as well as saving up for a deposit, so this has made it much easier in the last two years for first time buyers.
First time buyers
First time buyers no longer pay Stamp Duty on properties worth up to £300,000.
If the property is worth between £300,000 and £500,000, you will pay no Stamp Duty on the first £300,000, but will pay the standard 5% on the remaining amount.
For example, if the property is worth £450,000, you will pay no Stamp Duty on the first £300,000 and 5% on the remaining £150,000.
Under the old system, first-time buyers would pay £12,500 in Stamp Duty on this £450,000 property. The new system means they will pay just £7,500.
Stamp duty has also lowered for homeowners in recent years. Before December 2014, charges applied to the whole of the purchase price. For this reason it was often criticised as a “slab tax”. Its structure meant there were sudden increases in stamp duty, when the price went above the next threshold.
For example, someone buying a home for £250,000 would pay £2,500, or 1%, in stamp duty. But if the price was £1 more, they would pay an extra £5,000, as they then pay 3% on the whole purchase price.
Now, the rates of stamp duty only apply to the amount of the purchase price that falls within the particular duty band, making it more like income tax.
In other words, someone buying a house for £200,000 will pay nothing on the first £125,000, and then 2% of the next £125,000, giving them a bill of £2,000.
|Stamp Duty Rate||Charge Band|
|0%||Up to £125,000
First time buyers: first £300,000 for property up to £500,000
|2%||Over £125,000 to £250,000|
|5%||Over £250,000 to £925,000|
|10%||Over £925,000 to £1,500,000|
Zoom995’s financial support
All of this information can seem overwhelming. However at Zoom995 we’re always here to help and talk you through your options when buying a home. We’d be more than happy to put you in touch with our partner Seymour Robinson Financial, where a member of their team can provide you with an array of financial services and plenty of financial support.
Mortgage and Life Insurance Solutions
Seymour Robinson Financial is a Financial Advisory firm based in Crawley, West Sussex and was set up in 2014 by Michael Robinson, a qualified mortgage and life insurance broker. Michael has been in the mortgage and insurance market since the 1980s.
The firm search competitive mortgage rates for prospective purchasers and homeowners. The team at Seymour Robinson Financial do not look at it as a one-off process but care for clients’ long-term mortgage and protection needs, resulting in many clients returning.
Call today on 01293 592166 or email firstname.lastname@example.org.
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If you are considering a buy-to-let property or remortgaging your home then contact us. We have a range of services to make the process as seamless and stress free as possible.