Figures from the latest Halifax First Time Buyer Review show not only the number of homeowners getting onto the property ladder for the first time have increased compared to this time last year, but also the average first-time buyer house price is the highest on record at £207,963 .
Of course, that means deposits being at record levels too. While in four regions across southern England, the average deposit has at least doubled; London sees the most dramatic increase with first-time buyers experiencing house prices soaring by 66% since 2012, with an average house price today of a staggering £409,975 and an average deposit of a jaw-dropping £106,577. The report shows, across the country, the average first-time buyer deposit was £32,899 for the first six months of 2017.
The news of record-level deposits might come as a blow to those hoping to get onto the property ladder sooner rather than later. But there are options to consider, to help get you there quicker and get the most of your savings.
Government incentives and schemes
The government’s Help to Buy: Equity Loan
schemes for new build homes, where a minimum 5% deposit is combined with the Government helping towards the purchase, reducing the mortgage required to 75%, have helped boost the numbers of first-time buyers since their inception. Today the schemes are still popular, with an adapted version for those looking to buy in London, where the government loan proportion is increased to 40%.
More recently, the government’s new Help to Buy: ISA’s are an option for increasing savings. When you save the minimum amount as outlined in the terms and conditions, the Government assists by boosting your savings up to 25%. And if you and your partner open an ISA separately, you can both take advantage of the savings boost to get you on the property ladder quicker.
The bank of Mum & Dad
More and more couples looking to buy their first home are turning to their parents for a bit of extra financial support, especially when it comes to getting the money together for a deposit. Research from Legal & General earlier this year predicts parents are to lend more than £6.5bn this year, a 30% increase on the £5bn loaned in 2016.
With house prices not showing any immediate sign of slowing down and the southern counties being the priciest regions, a cash injection from the parents might just help shave a few months or years off saving the funds you need.
Consider relocation
Be realistic about where you can live as much as where you want to live. Perhaps moving to a more affordable region where house prices and deposits are more achievable can be the compromise needed to get your first home. Sometimes even the slightest move away from prime property hotspots can make a huge difference. Of course, make sure there are good transport options for the commute to work and that you do your homework on the new area before committing to it.
Buy new
The best deals on buying a home come with new build properties – as well as the schemes offered by the government that we mentioned earlier, there are sometimes further promotions from the property developers themselves. And by buying new there are long-term cost savings to be had, alleviating some of the financial pressures once you move in. With no need for redecoration and fixing aged properties as well having the very latest specifications for heating, insulation and security, a new home can be a very worthy investment for any first-time buyer.
Sign up to our newsletter for regular information about buying a new home, new build homes across the country and the latest Government schemes.
