In today’s global economic climate, it can be difficult for people to buy a house, while struggling with annual bills. But the U.K. government has a number of schemes available to first time buyers and existing homeowners such as Help To Buy, NewBuy and Right to Buy. Offering Government loans and easy ways to get 95% mortgages, these schemes have all been designed to help people own their own home quickly and easily.
Help to Buy
Help to Buy helps prospective homeowners buy a house with just 5% deposit. It is valid on houses worth up to £600,000. Prospective homeowners only need to provide a deposit that covers 5% of the property price. The Government will then provide a loan of up to 20% of the price, leaving you to obtain a 75% mortgage. The Government’s loan is interest free for the first five years, after which you’ll be charged 1.75% of the loan’s value.
Right to Buy
Right to Buy gives eligible people who live in council properties in England the right to buy their home at a discount. The scheme is open to people who are secure tenants of a local council and who have spent at least 5 years as a public sector tenant.
NewBuy allows prospective homeowners to purchase a newly built home with a mortgage by making a 5% deposit. Aimed at first-time buyers or those who own a home but are unable to generate enough capital for a 20% deposit, home builder partners link up with mortgage lenders to offer 90-95% loans on their properties. Only new homes built by specific house builders that have signed up to the scheme will qualify, but many major and smaller builders have now registered with the scheme.
Beware of Hidden Costs
These government schemes make getting a home a lot easier, but you meed to remember that there is more to buying a home than the down-payment. The process of buying a house has a number of hidden costs. Being sure you’re fully aware of these costs is the first step to successfully owning your own home.
Here’s some key items to look for when buying your new home:
Mortgage Arrangement fee
When trying to obtain a mortgage, your lender will charge you a fee. Often around the £1,000 mark, this fee is non-refundable, even if you are unable to purchase the house later on.
When paying multiple thousands of pounds for a new place to live, you will have to pay some legal fees. Often dependent on the cost of the property you are buying, these fees can be between £500 and £900.
These fees will cover items such as security for the loan you are about to take out, and for valuations. This fee is commonly around the £300 mark.
A required fee when buying a house, typical surveys cost anything from between £400 and £700.
If the property you are buying costs more than £125,000, you will have to pay a percentage of the total cost to HM Revenue & Customs. Prices for Stamp Duty vary depending on house value, but Stamp Duty Calculators are available online to find out how much you will be expected to pay.
These can vary depending on how quickly you want to move, and what you need to move. You may already have access to a large van, and several mates willing to lend a hand in which case you may have minimal removal costs, but for those who need to transport large items a long way, a removal company is recommended. These start at £50 for short trips to £1,000+ for large lorries travelling a long distance.
When you arrive at your new home, you may find that it requires some maintenance. For older houses this is common, for new builds there will be no property repairs required. Unless you want to redecorate straight away.
This guide to buying a new home has been brought to you by KierHomes.co.uk a company that is focused on helping people buy a new home with the Government’s range of new initiatives. Based in Bedfordshire, Kier Homes has a fantastic collection of developments around the UK, and properties on each of Kier Home’s 25+ developments can be purchased using the Government’s Help to Buy Scheme.
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