Update on First Time Buyers Relief

Update on First Time Buyers ReliefOver recent years, many first-time buyers in the UK have struggled to purchase a property, due to interest rates and rising costs. If you fall into this category, are you aware of first-time buyers’ relief? There are some government schemes that can help you buy your first property. In this blog, we look at the different types of relief available for first-time buyers.

According to Legal & General, in 2023 an average of 12% of first-time buyers relied on financial support from their family to purchase their home. The average sum of £25,600 was gifted with many parents and grandparents using their own savings and investments to help younger generations.

The HomeOwners Alliance found that 20% of 18 to 34-year-old homeowners received financial help from family members. Lloyds also reported that in 2023 the average age of a first-time buyer was 32.

The cost of buying a property has risen dramatically over the past decade. When compared to house prices in 2013, deposits are 67% higher on average and house prices have risen by 86%. However, the average salary is only 30% higher than in 2013. Therefore, getting onto the property ladder continues to be a big challenge for younger people.

Lloyds also reported that 63% of first-time buyer mortgage completions are in two or more names. Teaming up with another party to buy a property has increased in recent years. This is often the only way that younger generations can afford to buy their first home. So what are the different types of relief available?

Government schemes for First Time Buyers

At the time of writing (May 2024), the Chancellor recently scrapped plans for 99% loan-to-value (LTV) mortgages for first-time buyers. This new scheme would have enabled home buyers to put down a 1% deposit on their new first home. The idea was that the government would back the overall loan, but there was resistance from bankers.

However, there are still three government-backed schemes available:

  1. Mortgage guarantee scheme – extended to 2025, this enables first-time buyers to purchase a property with only a 5% deposit.
  2. First Homes scheme – this gives you a discount of between 30 to 50% when you buy a new-build property.
  3. Shared Ownership – this is a type of scheme available for anyone including first-time buyers, where you buy a share of a property. The remaining amount is paid as rent to a property company, reducing the cost of mortgage repayments.

Before you commit to any type of government scheme, it’s important to receive mortgage advice from a qualified and experienced adviser.

Mortgage advice for First Time Buyers

At Bubble Finance Hub, we know it can be daunting when you are buying your first home. Our approachable and empathetic team are here to give you peace of mind with trusted mortgage advice. We can source hundreds of whole of market mortgage deals, and we will explain how the mortgage process works, from initial recommendations to completion.

If you’re a first-time buyer and you need mortgage advice, get in touch to book an appointment.

Your home or property may be repossessed if you do not keep up the repayments on your mortgage.

Thank you for reading our blog, Update on First Time Buyers Relief.

Bubble Finance Hub

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