London’s first time buyers (FTBs) benefited from the Stamp Duty changes of December 2014 more than any other region over the last twelve months according to the Halifax Annual First Time Buyer Review.
Based on the average price paid by FTBs in 2015 most regions benefited from the changes. But the largest savings were in the Capital with the average FTB price of £367,990 now paying £8,399 in stamp duty fees compared to £11,039 before the change – a difference of £2,640.
The average saving across the whole of the UK was £598.
Halifax also found that the number of FTBs in the UK in 2015 reached 310,000. Although volumes have fallen marginally (0.5%) from 2014, this is the second year running that FTB volumes have reached 310,000 and represents a 60% increase from 2011 when just 193,000 FTBs were recorded.
First time buyers accounted for 46% of all house purchases made with a mortgage in 2015 – the same as in 2014. This share has grown from 36% at the start of the downturn in 2007.[i]
The introduction of London Help to Buy is expected to help more FTBs onto the Capital’s property market this year. However, many underestimate the amount of leg work and preparation involved in buying their first home and often stumble at the first hurdle.
Here are our top three tips to get ahead:
1. Make an early appointment to see an independent mortgage and protection advisor – before you even start your search. With access to the most comprehensive mortgage options available to the market, and at some of the best rates, these professionals are there to talk you through the entire process from start to finish. They will ensure you are aware of all the costs involved for the entire property purchase, will proactively tell you how to put yourself in the strongest position, and will help guide you through the transaction. Just having an initial conversation with them will be helpful as you only pay a fee when you agree your mortgage.
2. Have your mortgage agreed in principle before commencing your property search. Doing this will provide you a clear budget and allow you to make a swift offer and get the purchase process moving quickly.
3. Ensure all of your financial documents are in place. These will always include pay slips, bank statements and contracts of employment. Make sure you have everything you need because lack of documentation will slow the process down and jeopardise your application.
[i] Halifax Annual First Time Buyer Review, Jan 2016