|With the annual growth rate for UK residential properties having slowed to an estimated 1.8% at the end of 2017, this year could offer better prospects for would be first-time buyers.
New data from Barclays Mortgages shows that there are some simple but effective ways of making sure you get a good deal when buying a property. Their research shows that one in five first-time buyers who bought over the last five years wish they had negotiated a better price for their property. Those who had paid more than the asking price did so to the tune of around £8,000 on average, £13,000 in London. This was largely due to fears that they would lose their purchase if they made an offer closer to the asking price.
So, the advice is to take your time. By getting an ‘agreement in principle’ from a mortgage lender, this will give sellers confidence that any deal they make with you has a good chance of going ahead.
DO YOUR HOMEWORK
Many estate agency websites give you access to data regarding the actual sale prices achieved for properties in the area where you are looking to buy, rather than what properties are currently on the market for. This information can help you form a realistic picture of what the property is likely to sell for, meaning you can pitch your offer accordingly.
If you find a property you are really keen on buying, get a professional survey carried out. By doing so, if there are defects that you will need to put right, the report should tell you what the cost of repairs is likely to be. If you’re still keen to proceed with your purchase, you can often use the survey findings to negotiate the price down.
In addition, as part of the mortgage process, your lender will want to carry out a mortgage valuation to ensure the value of the property will cover the amount you want to borrow. If it’s overvalued, the report will show what it’s realistically worth. Don’t forget that being a first-time buyer can mean that, from the seller’s point of view, you are a more attractive purchaser than another potentially-interested buyer who has a property they need to sell before they can proceed.
One of the big stories from the Autumn Budget was the abolition, with immediate effect, of stamp duty for first-time buyers purchasing properties worth up to £300,000. To help those in expensive areas, the first £300,000 of the cost of a maximum £500,000 purchase will be exempt from stamp duty, with the excess of up to £200,000 incurring 5% duty. This is a huge positive for all those first-time buyers saving hard to get a first foot on the housing ladder. The Scottish Government is deciding on any equivalent Land & Buildings Transaction Tax change.