The extension of the stamp duty holiday and the prospect of Government-backed 95% mortgages from April made it a positive Budget for the housing market and promises to keep our conveyancing team busy during the spring and summer.
The low-deposit mortgages will be available until December 31, 2022 to all buyers of properties costing up to £600,000, and buyers will be able to fix their initial mortgage rate for at least five years.
According to Rightmove, the national average asking price of a first-time buyer property is £200,692, which would mean a deposit of around £10,000. However, the average London first-time buyer spends a shade under £490,000, according to Halifax, which would mean a minimum deposit of close to £24,500.
Given the high property values in our part of the world and the fact mortgage lenders typically offer loans of up to 4.5 times the buyer’s salary, it is still going to be tough to convert ‘Generation Rent’ to ‘Generation Buy’.
For first-time buyers not on huge wages but fortunate enough to have parents who have set aside some savings, now could be the moment they seek help from the ‘Bank of Mum and Dad’.
If you are looking to help your son or daughter into their first home, there are some important things to consider, such as confirming whether the financial assistance is a gift or loan, and whether either of you is likely to own another property anywhere in the world at some point (as there will be tax implications).
Also, if you are purchasing jointly with a mortgage, you need to understand that you are equally responsible for full repayment of the loan, not just a share of it, regardless of how you jointly own the property.
As ever, what starts out looking like a great idea can very quickly come unstuck without proper due diligence.
At KWW, we’re always pleased to see families coming together to help dreams come true, and we are ready to help you tackle the key questions and complete the appropriate legal steps.
Contact our Conveyancing team on 0208 979 1131.