With mortgages remaining difficult to obtain for most first-time homebuyers, buying a new home, a daunting prospect at the best of times, may seem an impossible dream. However, with the right amount of planning and budgeting, home ownership could still lie easily within your grasp.Introduction - The right time to buy
If there ever was a good time to buy a home, it's definitely now. Buying costs across the UK are actually 14% lower than rental costs, according to research from Halifax Bank of Scotland. This is a substantial reversal of the trend from three or four years ago, when the cost of buying was a whopping 50% above average rental costs.
But unless you're in possession of the 27% deposit the average first-time buyer needs to buy a home, you'll be priced out of the second-hand market, with mortgage restrictions still holding many would-be buyers back. Currently, the second-hand market is largely dominated by cash buyers who don't need to take out a mortgage to purchase.
The new-build homes market is much more first-time buyer friendly, though the advantages of buying a new-build home are not just financial. The government has teamed up with a lot of housebuilders and developers to help first-time homebuyers onto the property ladder with programmes such as the FirstBuy scheme or NewBuy. Open to buyers on a household income less than £60,000 a year, if you can put together enough cash for a 5% deposit, you'll be eligible for a loan worth up to 20% of the property's value. Read more about FirstBuy here.
But as with any purchase, especially what could be the biggest one you ever make, it's a good idea to familiarise yourself with the process before you even think about signing on the dotted line. Our glossary can help you with any unfamiliar words and phrases and our step-by-step guide for first-time buyers will take you through what you need to know from start to finish.