The 1st Time Buyer is Back!
The first time buyer is back… early indications suggest that stamp duty reduction has increased activity.
Alistair Darling, the Chancellor, increased the stamp duty threshold from £125,000 to £250,000 for 1st time buyers.
Melanie Bien, of Savills Private Finance, said:
“Easter is traditionally the busiest time of year for the housing market and the Chancellor’s stamp duty exemption for first-time buyers has provided a further boost.
We have seen a pick up in inquiries from first-time buyers keen to take advantage of the tax break and buoyed at the prospect of saving up to £2,500.”
The stamp duty changes aren’t the only factor driving demand. Sellers who were reluctant to sell in 2009 are now releasing their property into the market increasing the availability of quality property.
Nationwide Building Society quote that in March property prices increased by 0.7 per cent. This is a small monthly increase but since March 2009 this means prices have risen by 9%.
If mortgage rates were to increase this could radically change the outlook for the housing market. The current cheap mortgages available would dry up forcing many to move or sell.
Nationwide claims that house prices are 10 per cent off their 2007 peak.
Mortgage broker London & Country, said, “In August 2007, there were more than 800 home loans that required a deposit of just 10 per cent. This suddenly dropped to about 100 as lenders became much stricter about whom they lend money to. ”
Many banks and building societies need an excellent credit rating from first-time buyers as they have not built up a track record in home ownership.
Key factors for 1st time buyers to consider before applying for a mortgage are:
1. Make sure you are on the electoral register
2. Check your credit rating with one of the three agencies – Experian, Equifax and CallCredit.
3. Sort out any credit rating errors before applying for your loan
Financial advisor London & Country added: “The deposit is king. There is an argument for holding off as long as you can to build up the biggest deposit possible. Every extra 5 per cent you can put down will make a difference.”
Category: Mortgage News
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