First-time buyers unaware of affordable housing options

Posted 30th August 2022 by ctatax-admin

Cornerstone Tax is the UK’s leading property tax advisers, specialising in Stamp Duty Land Tax. We’ve reclaimed over £15 million in overpaid SDLT in the last 12 months. Contact us for property tax advice, or to see if you are eligible to claim a refund from HMRC on overpaid Stamp Duty

Read the article in Financial Adviser

“According to a recent survey by Fairview New Homes, 73 per cent of first-time buyers are unaware that the Help to Buy scheme closes to new applications in the autumn.

The survey revealed that 70 per cent of first-time buyers do not know what the Help to Buy scheme is.

According to Fairview New Homes, many first-time buyers will have missed out on putting down this reduced minimum deposit.

The end of the Help to Buy scheme will affect the ability of many first-time buyers to afford the increasing cost of a mortgage deposit, according to Lucy Ellis, associate director at JLL’s residential London development team.

She said: “The end of Help to Buy is a big concern for first-time buyers.”

“Once Homes England stop accepting new Help to Buy reservations from the end of October buyers will see their affordability levels slashed significantly.”

Changing mortgage products

The changing nature of schemes and mortgage products available to first-time buyers will greatly affect their ability to plan for a mortgage, according to iPlace Global chief executive Simon Bath.

He said: “The mortgage products available to the first time buyer are changing constantly with new products being introduced and existing products being taken away on a frequent basis during this turbulent time.

“This will therefore have a significant impact on the mortgage deposit planning that first-time buyers need to consider.

“While the last few years have allowed first-time buyers to save funds during the pandemic, the need to visit the Bank of Mum and Dad may be greater now than ever.”

Despite changing mortgage products and the help-to-buy scheme closing for applications at the end of October, there are ways first-time buyers can make obtaining their first property an easier process for both short and long term.

First-time buyers may be able to reduce their mortgage repayments if they increase the amount of deposit they pay, making a mortgage more affordable in the long-run.

Cornerstone Tax group chair David Hannah said: “If a first-time buyer is able to increase their deposit, then this will improve their chances as it will reduce the borrowed amount and thus their repayments.

“It will also increase their equity in the property, making them more secure against temporary price drops that might put heavily mortgaged buyers into ‘negative equity’.”

Increase in housing supply is needed

While first-time buyers can make individual choices to help their mortgage affordability, market change is needed to decrease the mortgage deposit for those buying for the first time.”

Cornerstone Tax is the UK’s leading property tax advisers, specialising in Stamp Duty Land Tax. We’ve reclaimed over £15 million in overpaid SDLT in the last 12 months. Contact us for property tax advice, or to see if you are eligible to claim a refund from HMRC on overpaid Stamp Duty