We’re likely to see more first time buyers around, now that George Osborne is continuing his campaign against property investors. Increased stamp duty for landlords, income tax changes being phased in, and now higher capital gain tax rates (in comparison to other types of investors), could see less demand from buy-to-let investors.
Yesterday’s budget brought good news for first time buyers that are under 40, with the introduction of the Lifetime ISA. This is a great way to save and should give first-time buyers a real incentive to start saving for their perfect home. For those first-time buyers already in a position to start snapping up some of those properties that previously would have gone to buy-to-let investors, here are our 10 top tips:
- First golden rule: sort your finances out – talk to a mortgage advisor and find out just how much you can afford before you fall in love with something that is out of your league! Also, an estate agent is unlikely to take you seriously as a buyer until you can demonstrate you have the finances in place to proceed.
- List out your criteria. What is essential, what is a ‘nice to have’? Think about your lifestyle – where do you need to be near, is parking essential, how much space do you actually ‘need’? Are you likely to be able to take on a project, will you have the surplus funds and time required to do the work?
- Location is key! Talk to locals, walk around the neighbourhoods to try and identify the ‘good’ areas. Choose those places with lots of things going for them – and make sure you know the ones to avoid (houses in these areas are always cheaper for a reason!).
- Start badgering estate agents with a clear brief; they need to know you’re serious, but do be prepared for a bombardment of properties in return, whether they meet your brief or not!
- Physically view lots of properties – make sure you get a feel for different styles and don’t just accept pictures and descriptions online.
- Size matters – try and get as much space as you can afford, even if you don’t need it right now. Moving is expensive, so it’s best to find somewhere that you can stay for at least 5 years.
- Don’t expect to buy your dream home straight away. Consider somewhere where you could add value, either now or in the future.
- Trust your instinct. Everyone talks of that ‘feeling’ you get when you find the perfect house, and it is true to a certain point. But make sure you always look back to your initial search criteria, and check that it ticks those ‘essential’ boxes, or the majority of them at least.
- Play it cool. If you find a place you fall in love with, try not to give the game away on the first viewing! Take a deep breath, think it over, then make an offer the next day.
- Be bold – but realistic. As a first time buyer you are in a great position to make an offer, especially if you can demonstrate you have your finances all lined up ready to go. With no chain behind you, it never hurts to put in a cheeky initial bid, although try not to offend the seller with a very low offer (but do make sure they know what a great buyer you are!). Don’t forget, the seller also makes the decision on whether to sell to you or not, so it’s sometimes worth remembering they are human too!
If it’s all too daunting, you can easily skip stages 2-10 and employ a search agent like ScoutBee to do all the work for you instead!