Lack of Deposit

The Building Societies Association has found that saving for a deposit is the hardest thing for first time buyers. Following this came making repayments, stamp duty, legal valuations plus other necessary costs.

They say that with the average house price being over £200,000 a 10% deposit means having to save around £20,000, an impossibility for many first time buyers.

It is no wonder that building societies are now offering 100% loans for those who can afford the repayments allowing them the chance to purchase a home.

It is have found many societies are keen to help first time buyers get a foot on the property ladder and clearly wish to help first time buyers as they are now devising new products for this sector.

Government schemes need more lending input to reflect the needs of both lenders and borrowers. A reform of section 106 planning system is needed to identify ways help can be given to save for deposits.

Budget – Stamp Duty

The average first time buyer, except for those in the North of England and Scotland, is subject to stamp duty.

Those anticipating buying property in London or the South of England will have to pay a minimum of £2000. This really is a cost they cannot afford with the lenders also asking for larger deposits.

But will the Chancellor heed this problem and raise Stamp Duty thresholds. He may not because of the drop in house prices.

Helping First Time Buyers

Those that hoped for help in the housing market from March’s budget were sorely disappointed.

It is now vital that something be done to activate a slow mortgage market. The injection of money from central banks may help but lenders so far have not made any positive moves. In fact we are continuing to hear about job losses and lenders lowering their loan to values.

First time buyers were hoping for some relief in Stamp Duty fees but nothing was done about this in the budget. It was hoped that the Chancellor would raise the threshold or make sellers pay the stamp duty rather than buyers. This would mean that those at the top of the chains would have to pay tax but these are usually people who have benefited from property rises for years. The same amount would be paid so the Treasury would not suffer any loss.

Some feel, it has been stated, it would be useful to have events with substantial information about equity release.