IF you are starting out, don’t have much in the way of savings and want to buy your own house, it’s going to help if you want to buy a brand new one.
Being able to secure a brand new home with just a 5% deposit has understandably been incredibly popular.
While you need a big deposit to get a decent interest rate from the banks, the Government’s policy of underpinning the property market means it is much easier to get finance on a new build home.
The range of initiatives is bewildering especially as they all have Buy in the title just in case we don’t get what they are helping us to do.
But it’s working. While the latest statistics say the number of first time buyers in the market as a whole is around 20%, housebuilders like Taylor Wimpey which can access the schemes, report they are selling a property a day in this region, a third of them to first time buyers.
FirstBuy has been around for a while but earlier this month, it got another £280m to extend its offer. It’s a shared equity deal where buyers have to finance 80% of the price of a new house with the developer and the Government financing the rest as a loan. You pay the loan back at the end of 25 years or when you move and sell the property. You have to be able to find 5% of the 80% price as a deposit but it means you can get a better mortgage rate.
The number of FirstBuy properties on any development is limited as banks would get nervy if every home was being sold at 80% of value. You also have to be a first time buyer with a household income less than £60,000.
NewBuy was launched in March and again offers buyers the chance to buy a house with a 5% deposit. But instead of the developer and the Government part funding the purchase they underwrite the mortgage.
A limited number of banks have signed up to the scheme. They are offering more competitive rates of interest on 95% loans but buyers have to be able to afford the monthly mortgage repayments.
NewBuy is not restricted to first time buyers and there is no limit on household income.
Just be aware that the ones being underwritten on this deal are the banks not the buyer and if you fail to meet the mortgage payments the usual rules apply.
Taylor Wimpey sales and marketing director Anthony Mansfield said: “Being able to secure a brand new home with just a 5% deposit has understandably been incredibly popular with those who had previously feared that property ownership was well out of their reach. It really does make all the difference to those who can afford the monthly repayments on a mortgage but not the hefty deposit.
“An increase in the number of first time buyers entering the market is also good news for those further up the chain as it helps stimulate the market and boosts confidence. Consequently, with more people buying new homes, employment opportunities in the area will increase as it means more jobs within the regional construction industry.”
Developers will also help if you already have a property.
Part-exchange deals are increasingly popular as they offer an easy way to move on and account for half of Taylor Wimpey sales to second time buyers so far this year.
Anthony concluded: “Our latest report demonstrates a positive shift in the attitude of second time buyers and is testament to our recent marketing campaign, specifically aimed at those who have a property to sell.”
The closest Taylor Wimpey scheme to town is probably Nightingale Gardens at Swinton. It’s the former Pendlebury Children’s Hospital site, built around the original distinctive hospital building which is also being converted to residential.
It’s a big, open site of traditional red brick houses that offer good layouts in an area that is already an established neighbourhood with good transport links into town.
Prices start at £164,995 for a three bed en-suite house.
For a 5% deposit you would be looking at having to find £8,250.
The Taylor Wimpey website www.taylorwimpey.co.uk has details of all the developments in the region and the various offers but while it may have Phil Spencer it is frustrating to use and does not, do justice to the actual developments. For once the reality is better than the brochure.
