The Influence of the Infectious Property Boom: First-time buyers are putting out an extra £ 23k on deposits – and HALF has seen sales decline, wasting £ 2,400 in fees


First-time buyers have been forced to find an average of £ 23,000 to buy a home since the start of the epidemic, thanks to a runaway home price increase.

About 60 percent of those on the property ladder said they needed to save more than they had originally planned, and nearly half had at least one home purchase – costing them a waste of fees.

That’s according to a new survey by Aldermore, a bank and specialist mortgage lender.

Long way to home: First-time buyers have to save much longer to achieve their home ownership dreams because the property’s unique price point is rocketed during the epidemic.

It said that since March 2020, the average deposit paid by first-time buyers was £ 62,572 and that buyers paid an average of 18.6 per cent in advance of property value.

And in further evidence of their squeezed finances, more than half the buyers said they had to vacate their home for a few months because, after spending so much on their deposit, they could no longer afford the furniture.

According to Zoopla’s latest home price index, home prices have risen by £ 15,500 in the past 12 months, with the South East and South West growing by more than £ 22,000.

The process of buying a home during the epidemic is longer and more complicated, which has caused first-time buyers to pay higher fees.

In the Aldermore survey, first-time buyers said their purchase was delayed by an average of three months, with one in six being delayed by five months or more.

This is due to buyers who initially landed on the market following the Covidi-related disturbance and then the announcement of a stamp duty holiday, which lasts from July 2020 to the end of June 2021.

This caused professionals such as surveyors, mortgage brokers and shippers to have large backlogs of work, which slowed completion.

The process of buying a home during the epidemic became longer and more complex

The process of buying a home during the epidemic became longer and more complex

Corey Askew, head of sales at Chestertons, says: ‘At the end of June, the sheer volume of transactions created Bottle-Neck, which delayed transactions and unfortunately avoided plans for those in need of savings to go up the ladder.’

Transactions are more likely to fall because of these delays and because the hot market is stunned by rival buyers.

Mortgage brokers admit that this is a tough time for first-time buyers.

Samantha Bickford, Managing Director of The Mortgage Girl at Ocean Mortgage, said: ‘They are the lifeblood of the property market.

We are consultants and mortgage brokers in 2021

Samantha Bickford, mortgage broker

‘Collecting more deposits, gazing up and taking out mortgage offers more than ever has really affected the mental health of many.

‘We are consultants and brokers in 2021, which is sometimes part of the job, but more this year.’

Aldermore’s survey found that 40 percent of first-time buyers made two or more offers before securing their home, expanding the process, and increasing costs.

About half the buyers had at least one purchase.

When this happened, it cost him an average of £ 2,403, in wasteful fees – though one in nine (12 per cent) spent £ 4,000 on a failed attempt to buy a home.

These additional barriers and costs meant that 48 percent of people felt they did not get the house they wanted because they had to compromise too much to go up the housing ladder.

The stress of the home buying process has affected people’s personal lives, with 46 percent saying the process causes problems in their relationship.

Despite the big costs, brokers were keen to point out that Aldermore’s figures are a national average, so people in some parts of the country can pay less.

Scott Taylor-Barr, a financial consultant with Carl Summers Financial Services, had this message for first-time buyers: ‘Aldermore’s research certainly highlights some interesting points, but please don’t be too concerned about buying your first home.

‘Some of these numbers look great, they are national averages and a lot of the costs associated with buying a property are directly related to its value – so the costs can be very different depending on what you’re buying. Belgravia or Bolton.’

Additional costs to buy a home

While saving the deposit is usually a big barrier to buying a first home, additional costs such as mortgage system fees, paying a solicitor and hiring a removal firm can also run into the thousands.

Aldermore asked first-time buyers what they spent on fees, and found that the cost of lawyers took an average of £ 767 from their budget.

First-time buyers spend an average of £ 767 on their solicitors, but mortgage and brokerage fees are the biggest expense afterwards at £ 611 and then delivered at £ 577

First-time buyers spend an average of £ 767 on their solicitors, but mortgage and brokerage fees are the biggest expense afterwards at £ 611 and then delivered at £ 577

Despite the obstacles, John Cooper, head of mortgage distribution at Aldermore, said first-time buyers are usually worth the stress and cost of buying a home.

‘Becoming a homeowner is a wonderful step in a person’s life but our research shows that the persistent effects of infectious disease are causing a high level of financial challenges on the journey,’ he said.

‘Although costs and complicated processes can be intimidating, we found that first-time buyers are happy that they did it, with 78 per cent saying it is worth the stress to find a home.

‘I would advise buyers to carefully plan and find a broker who can help you in cutting the terminology and guiding you through the process to make sure they are ready for the range of costs involved.’

In September 2021, Opinium surveyed nearly 2,500 real and prospective first-time buyers on behalf of Aldermore.

Are things easy for first-time buyers?

Going up the housing ladder has been a significant disadvantage since the beginning of the epidemic.

Although home prices are rising for everyone in the market, home-changing homeowners are usually not severely affected.

This is because they can use the equity in their existing home to place a higher deposit for their new one – which has probably risen in value.

Now that the stamp duty holiday is over, some experts say the housing market is beginning to calm down and prices will stop rising at such a rapid rate.

Jonathan Harris, Managing Director of Mortgage Broker Forensic Property Finance, says: ‘The frenzy of the past few months seems to have been somewhat quiet, meaning first-time buyers are not at risk of losing the same amount. Delay their move. ‘

However, there are suggestions that the supply of new assets coming to market is smaller than the number of buyers looking for it, which helps keep the competition high.

According to the latest figures from business firm Propertymark, an average of 511 buyers registered for each estate agent branch in October – an increase of 12 percent from the previous month.

However, there were only 21 available properties for them to buy – the equivalent of one home for every 24 buyers.

The good news can be found in the mortgage market, where the price and availability of mortgage transactions for first-time buyers have greatly improved since the early days of the epidemic.

Lenders carefully rolled out their low-deposit products in the spring of 2020, before putting them back on the market for several months at high rates.

In October 2020, the average two-year fixed rate on a 5 percent deposit mortgage was 4.74 percent, according to Manifacts.

But today, for first-time buyers, rates are falling – even for those with higher equity when they start to increase.

This table is compiled by Katie Brain, a banking expert at Financial Information Service Defacto, which shows two-year fixed rates for first-time buyers.

They now show that mortgages can be obtained on roughly the same terms as the pre-pandemic one.

First-time buyer mortgage rates are similar to the rates seen before the Kovid epidemic today

First-time buyer mortgage rates are similar to the rates seen before the Kovid epidemic today

‘For most first-time buyers, high-value mortgages are available, with many lenders returning to pre-epidemic terms and standards,’ says Harris.

‘Rates are more competitive than they were and you pay more than borrowers with big deposits, the difference is narrowing.’

However, even though rates are lower, the higher cost of assets compared to a year ago still means buyers will have to save larger deposits than pre-epidemics.

‘The property market is difficult for first-time buyers,’ says Bryn.

‘One of the best things a first-time buyer can do is to save as much as they can toward a home loan because it makes a lot of difference in terms of available mortgage deals.’

Best mortgages

Some of the links in this article may be affiliate links. We can earn a small commission if you click on them. It helps us get money and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

.

Related Articles

Celebrate the anniversary of Hulk Hogan Low Key Flex Changing Pro Wrestling in Iron Shake forever

Hulk Hogan is one of the most controversial figures in professional wrestling. Even today, after his in-ring career, Hulkster elicits emotional reactions...

The US food supply is under pressure from plants to storage shelves

Check out what's clicking on FoxBusiness.com. The US food system is under renewed pressure as the omicron version...

Seattle Man Live-Tweets Trying to Target Hostage, days after the alleged officer was assaulted: Report

A Seattle man who was released on bail after being charged with assaulting a police officer was arrested just eight days later, attempting...

Latest Posts

Celebrate the anniversary of Hulk Hogan Low Key Flex Changing Pro Wrestling in Iron Shake forever

Hulk Hogan is one of the most controversial figures in professional wrestling. Even today, after his in-ring career, Hulkster elicits emotional reactions...

The US food supply is under pressure from plants to storage shelves

Check out what's clicking on FoxBusiness.com. The US food system is under renewed pressure as the omicron version...

Seattle Man Live-Tweets Trying to Target Hostage, days after the alleged officer was assaulted: Report

A Seattle man who was released on bail after being charged with assaulting a police officer was arrested just eight days later, attempting...

Who decides if Utah schools go online if COVID escalates? Bill changes things

Continuing, top state leaders will decide whether local schools can turn to online learning amid a COVID-19 surge under legislation that...

When is Guillermo del Toro’s Pinocchio released on Netflix?

Pinocchio is a puppet story that comes to life after the woodworker Geppetto hops on the star. The 1940s classic is now ready...