Buy­ing your first home can be a lot to wrap your head around. Even the basics like mort­gages and cred­it checks can leave many scratch­ing their heads. We here at Jack­son Bar­rett and Gass want to make the buy­ing process as sim­ple as pos­si­ble for first time buy­ers. That’s why we’ve com­piled a list of three key things first time buy­ers should know.

The Dif­fer­ence Between New Build and Old Build

Put sim­ply, a new build prop­er­ty is a brand-new prop­er­ty that is under 10 years of age. New builds tend to be more expen­sive than old builds, but old builds can present more age-relat­ed prob­lems. If you dis­cov­er a prob­lem with an old build after you’ve pur­chased it, the com­bined cost of the prop­er­ty and any main­te­nance required could end up cost­ing more than the price of a new build. All new homes in the UK are cov­ered by a 10-year home war­ran­ty and insur­ance guar­an­tee which makes new builds a more entic­ing prospect, but new builds tend to be small­er and lack the char­ac­ter of old builds. So which is bet­ter? It real­ly comes down to what works for you!

The Dif­fer­ence Between Free­hold and Leasehold

When you by a free­hold prop­er­ty you own that prop­er­ty out­right where­as you only own a lease­hold prop­er­ty for a set amount of time rang­ing any­where from 40 to 999 years. Free­hold prop­er­ties are gen­er­al­ly more expen­sive since you tech­ni­cal­ly own the whole prop­er­ty and the land it resides upon, mean­ing you’re free to do as you please with the property.

Lease­hold prop­er­ties tend to come with con­tracts restrict­ing what you can and can’t do with the prop­er­ty. As a lease­hold­er you may also have to pay main­te­nance fees, an annu­al ser­vice charge, and a share of insur­ance on the build­ing as per the terms of your lease. It’s worth dou­ble check­ing whether or not a prop­er­ty you are inter­est­ed in is free­hold or lease­hold before start­ing any pro­ceed­ings as some­times this may not be clear­ly stat­ed by the owner/​estate agents.

Help to Buy Scheme, Help to Buy ISA & First Time Buy­er ISA

The Government’s Help to Buy Scheme, First Time Buy­er ISAs, and Life­time ISAs are designed to get peo­ple onto the prop­er­ty lad­der. The Help to Buy Scheme pro­vides first time buy­ers with an equi­ty loan of up to 20% of the cost of a new­ly built home. This means you will only have to pay a 5% deposit and the remain­ing mort­gage. This 20% equi­ty loan is inter­est free for the first five years.

A Help to Buy ISA boosts your sav­ings with a 25% bonus. You can kick­start your ISA by deposit­ing up to £1,200 into the account and you need to have at least £1,600 in the account to start get­ting the bonus. From then on you can make month­ly con­tri­bu­tions of up to £200 how­ev­er if you miss a pay­ment you will not be able to add it the fol­low­ing month. The Help to Buy bonus is capped at £3,000 and to earn this you’d need to have £12,000 in your account. Once you have hit this cap you can still use the ISA to save but you will only make a £3,000 bonus.

Lifeitme ISAs allow you to put up to £4,000 away each year right up until you turn 50. Unlike with the Help to Buy ISA, you aren’t required to make month­ly dona­tions with the Life­time ISA and can deposit mon­ey in lump sums. Each year, the gov­ern­ment will add a 25% bonus to your sav­ings which can be up to £1,000. Due to the long-term nature of the Life­time ISA, the max­i­mum bonus you can get is £33,000 (pro­vid­ed you open it at 18 and max it out until you hit 50).

Are you plan­ning on buy­ing your first prop­er­ty? We’d be delight­ed to pro­vide infor­ma­tion and advice on the home-buy­ing process. Con­tact us today to use our Res­i­den­tial Con­veyanc­ing ser­vices and we’ll guide you through every step of your prop­er­ty buy­ing transaction.