What now for first-time buyers in the north east?

There’s a lot to consider, from finding a location and property you love, to deciding what you’re prepared to compromise on (perhaps you don’t need that dressing room after all, but private parking’s non-negotiable).

The good news is it seems the Granite City’s a great place to buy when it comes to affordability, at least according to professional services firm CACI.

In 2019 CACI listed the city as the most affordable location using UK data, with the higher-than-average household income for first-time buyers being £38,672 and the average house price being £180,495.

To set that in context, data showed while the average house price difference between the most and least affordable locations (latter being Westminster) was 543%, the difference in household income was only 46%.

What’s more, it seems there’s plenty of property choice in the north east too.

As of mid-January, ASPC data shows there are almost 1,500 properties on the market for up to £150,000 available in the city, and more than 350 in the suburbs. From our own diverse portfolio, homes fitting the bill range from a converted steading in an idyllic setting near Keith to an executive apartment in Ferryhill with all furniture included.

Positive news, but what’s next when it comes to setting a budget and getting your finances in order.

Financial support — First Home Fund

Government support is available.

While Help to Buy has been around for some time, running until March 2021, the Scottish Government says its First Home Fund pilot will provide £150million for around 6,000 to get on the housing ladder.

It adds the scheme will provide purchasers with up to £25,000, towards the cost, if they have at least 5% of the deposit, and if you’re making a joint application, only one of you needs to be a first-time buyer.

There are no monthly or interest payments to make to the government, and there’s no deadline for paying back the equity share. Chances are, many buyers will choose to pay back the equity when they sell the property, although they can increase their share before then.

The biggest hurdle

We know, from working closely with the independent financial advisors in our subsidiary Golden Square Wealth Management, that one of the largest hurdles facing these buyers is saving for the deposit.

The good news here is there are plenty of borrowing options out there.

Generally, you need at least a deposit of at least 5%, and while some lenders offer 95% loan-to-value mortgages, the more you can save, the wider the range of mortgages and more favourable interest rates you’ll be able to access.

If parents are in a position to help, options could also include a joint mortgage between parents and children, which could bring a share of the profit when the property is sold. That said, this does bring with it the liability for meeting mortgage payments and other relevant expenses.

Of course, with all of these options, it’s important to seek both legal and financial advice to ensure you’re absolutely comfortable before going ahead, and you’ll need to factor in other home-buying costs such as legal fees and insurance.

Are you ready to start looking for your first home? If so, check out some of the properties we have for sale.