Check out local services

The Three Questions First-Time Buyers Should Ask In The New Year

With a new year comes new beginnings, and for many people, this involves getting onto the housing market for the first time, during a time when house prices are starting to fall from all-time highs.

Whilst Hackney estate agents have noticed a larger fall in average house prices compared to the rest of the country, there are still many questions that need to be asked to make sure now is the right time to make the move to buy the house of your dreams.

Here are three questions to ask yourself, your estate agent and other advisors before buying a home in the next twelve months.

How Much Can You Borrow?

Before stepping out into the market, it is important to know how much money you can borrow, which often involves a complicated exploration of the household’s financial circumstances, which includes not only your income but the income of anyone else you are buying with.

Typically, although this is not always the case, banks will let you borrow between four and five times your annual income, although this could change depending on whether the Bank of England changes some of the required tests.

As well as this, certain lenders have very different criteria for others, which means that self-employed people may need to provide more evidence and find the right lender for them.

Mortgage rates, which are set to increase due to the Bank of England’s base rate rise at the end of 2021, are less likely to affect first-time buyers.

Do You Have Enough Money For A Deposit?

The first step before buying a house is saving up the money for a deposit, which at the current average asking price of £340,167 requires either five per cent (£17,509) or ten per cent (£35,017) of the asking price to be paid upfront by the buyer.

Knowing what you need to save up can help you make a saving plan to build up the money for a deposit.

Can You Afford The Extra Charges?

Buying a house involves paying a range of other costs as well, although some of these are reduced or even waived off for first-time buyers.

Typically, you are expected to pay around £2000 in extra costs, which includes £1200 in conveyancing and other legal fees, £450 on surveys and £350 on removals.

For more expensive homes, stamp duty can be a factor but for houses up to £300,000 in price, this is waived for first-time buyers.