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    What to Consider as a First Time Buyer

    Since the 1980s house prices have increased almost consistently. The Office for National Statistics suggests that on average house prices have risen by 7% each year. This annual increase has made it difficult for young first time buyers to get onto the property ladder, with just 36% of 25-34 year olds owning a property at the beginning of 2015.

    As Theresa May pledges her support for young first time buyers through a new Garden Village project, we discuss what first time buyers should consider when buying a property.

    • Questions to Ask about Responsibility

    Who is responsible for the land, the roads and the empty plots that surround the property? Are there any land restrictions or protection orders on wildlife? Will it restrict development to your property? Are there any land proposals already in the process of being made? Is the property in an extreme weather zone, i.e. flood risk zone?

    • Is the home NHBC registered?

    NHBC stands for National House-Building Council. It provides buildmark warranty and insurance and keeps the standard of new homes high in the UK through consumer protection.

    • Is the Property Leasehold or freehold?

    Leasehold is the method of owning property for a fixed term but not the land on which it exists. Possession of the property is subject to the payment of rent. When the lease expires the property reverts back to the freeholder.

    A freehold is an outright ownership of the property and the land on which it exists, therefore, unlike leasehold; there is no time limit to the period of ownership.
    A legal advisor will be able to provide details on the lease term and what type of property it is, along with the restrictions and limitations of the property.

    • Are you bound to the transactions?

    This is figured out by general legal principles and how the sale and purchase contract is drafted. Once contracts are exchanged your purchase is binding and to pull out could have serious implications.

    • The deposit and monetary responsibilities

    In order to purchase a piece of land, you are going to need the cash to do so. Despite not needing the full amount, you will need 5-20% of the asking price to put down a deposit. The majority of first time buyers will need to get a mortgage to buy a house. But prior to obtaining a mortgage you will need to consider if you can actually afford the monthly repayments.

    Providers will review your income and outgoings to see if you have the capability to make the required repayments, and consider how a rise in interest rate, or a change in personal circumstance, could affect this. They will consider things such as your credit rating, personal spending and living expenses.

    You should also find out if your deposit can be deducted from the purchase price. This reduces the risk of losing your deposit unnecessarily. Being aware of how your deposit will be held and if it will be released to the seller on exchange is vital. If the property is under construction, and the developer becomes insolvent this could result in the loss of your deposit.

    When budgeting for your mortgage repayments it is important for first time buyers to consider the following possible outgoings:

    1. Stamp Duty
    2. Solicitors fees
    3. Survey cost
    4. Removal costs
    5. Initial furnishing and decorating costs
    6. Buildings insurance


    • What Will be Included?

    Usually fixtures and fittings are included with a new home. However be sure to look at the FFC (fixtures, fittings and contents) form that will be attached to the sale agreement to see specifically what is and is not included. Avoid basing your purchase on the quality of items in the show house as it is unlikely that each house will be furnished in the same way. Should you disagree with the FFC form, or require changes to it, you need to contact a solicitor and seek those alternations prior to the completion of the contract.

    Buying a home is one of the most important financial decisions many people make in their lifetime. For a first time buyer the process can seem complex and daunting.

    The Wildings Solicitors Residential Conveyancing team are experts in offering support and advice for first time buyers. Head to our Residential Conveyancing page to find out how we can help.




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