Entering the property market for the first time can be both exciting and daunting. Understanding the criteria can help you determine your eligibility and take advantage of benefits designed for first-time buyers.
A first-time buyer is someone who is purchasing their first home and has never owned a property before, whether outright or with a mortgage, in the UK or abroad. This includes not having owned a residential property, inherited property, or a share in a property. The definition also extends to properties bought through schemes such as shared ownership.
Qualifying as a first-time buyer comes with several advantages outlined below.
Stamp Duty Relief: In England and Northern Ireland, first-time buyers are exempt from Stamp Duty on properties up to £425,000 and receive reduced rates on properties up to £625,000, providing the property is intended to be your main residence and the purchase price is no more than £625,000.
Affordable home ownership schemes: These include the Lifetime ISA, which offer government bonuses on savings used to purchase your first home.
Lower Deposit Requirements: Some mortgage products designed for first-time buyers require lower deposits, making it easier to get on the property ladder. Examples include the track record mortgage offered by Skipton Building Society or the £5000 deposit scheme offered by Accord Mortgages.
While the definition seems straightforward, there are factors that can affect your eligibility. If you're buying with someone who has owned property before, you typically won't qualify for first-time buyer benefits. Similarly, if you inherit a property, even if you’ve never lived in it, this prevents you from being considered a first-time buyer.
Where should a first-time buyer start?
Save for a deposit: Start saving your deposit. A good place to start is separating your savings account from your current account and setting up a direct debit of what you’re prepared to save each month.
Get mortgage advice: Speak with a mortgage advisor to understand your options, set your budget and find a mortgage deal to suit you.
At Your Mortgage Room, we're here to guide you every step of the way. Contact us on 01273 039500 to discuss how we can help you get the keys to your first home.
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