Right­move claims that more than two thirds of poten­tial first time buy­ers think now is a good time to buy a prop­er­ty. With Prop­er­ty prices sig­nif­i­cant­ly low­er, even in the most pop­u­lar areas, and inter­ests rates remain­ing low, it could be a once in a life­time oppor­tu­ni­ty for the cur­rent gen­er­a­tion of first time buyers.

Jack­son Bar­rett & Gass Mar­ket­ing Man­ag­er, Rick Bar­row said From an indus­try point of view, I believe the local area has hit the bot­tom of the mar­ket. Prop­er­ty prices can only drop to a cer­tain lev­el, before they get snapped up and I’ve also seen exam­ples all over the UK. I there­fore think it is a great time to enter the market.”

As a first buy­er him­self, Rick would admit to being prompt­ed by a friend to inves­ti­gate the true cur­rent market.

Rick said I had been first alert­ed to deals by a friend from Uni­ver­si­ty who is now a seri­ous investor. He sent me details of a repos­sessed 2 bed­room, 2 bath­room flat in Dids­bury. Some­body had bought it for £210,000 in 2005 and it sold to a cash buy­er for £110,000 in July 2008.”

Repos­ses­sions proved to be a good place to start. Often, they indi­cate what admin­is­tra­tors view as a rea­son­able price, although it ulti­mate­ly depends on how much they are owed and how quick­ly they want the money.

Most would claim that Rick has an unfair advan­tage over oth­er first time buy­ers. He works for Jack­son Bar­rett & Gass Solic­i­tors who spe­cialise in Con­veyanc­ing, and there­fore has a greater insight into the state of the mar­ket, and more con­tacts to call on for opinions.

How­ev­er, Rick would point out that he had to go through the usu­al prob­lems that most first time buy­ers face all, over the country.

Mort­gages are still prov­ing a prob­lem for most buy­ers, let alone first time buy­ers. Rick said I had about a 15% deposit avail­able and got 2 mort­gages agreed in prin­ci­ple by 2 high street lenders. How­ev­er, when I enquired about a new build prop­er­ty, the deposit required sud­den­ly jumped to 25%.

I had to search high and low for about 2 weeks, and was even­tu­al­ly giv­en a tip by a bro­ker about an in-branch only mort­gage deal which was per­fect­ly suit­ed to the my deposit.”

Rick even­tu­al­ly found a new build flat that was the last for sale, and offered with a sig­nif­i­cant dis­count and gift­ed deposit. The lat­ter, com­pli­cat­ed things significantly.

For numer­ous rea­sons, some lenders have become uneasy about new build prop­er­ties, and hence the high­er required deposits with cer­tain lenders. How­ev­er, I actu­al­ly think they rep­re­sent the best oppor­tu­ni­ty for first time buy­ers strug­gling to raise a deposit.

Sev­er­al major builders we work with are prov­ing to be more flex­i­ble with incen­tives, and also offer sev­er­al pur­chase plans such as shared equi­ty; the buy­er owns 100% of the prop­er­ty but is assigned a 25% inter­est free loan for a peri­od or until the house is sold (reg­is­tered as a sec­ond charge).

Anoth­er is the Gov­ern­men­t’s Home Buy Direct Scheme. Both schemes solve first time buy­er’s prob­lems with deposits, as none are need­ed, and we have seen a sig­nif­i­cant increase in pur­chas­es through the Home Buy Direct Scheme.

Hav­ing said that, first time buy­ers with a deposit should also research the com­plete res­i­den­tial mar­ket. It is worth reg­is­ter­ing with some agents in the areas that inter­est you, and be spe­cif­ic with what you are look­ing for. I would also start the mort­gage process ear­ly, so that you able to move quick­ly when you decide upon a property.”


This arti­cle appeared in Wilm­slow Express Home­search 21/05/09