So, we've picked out some of the main things you need to bear in mind when you set foot on the first rung of the property ladder. When it comes to help for first time buyers, it's useful to hear from the experts - luckily, we know a thing or two about new homes and the moving process, so here are some ways we can help make the process of buying your first home as easy as possible.
Could a first time buyer scheme be right for you?
Saving up for a deposit can often be the biggest barrier to buying your first home - luckily there are several first time buyer schemes available that can offer a helping hand. For example, you could move into a Redrow home with just a 5% deposit with the Deposit Unlock scheme.
Deposit Unlock
With Deposit Unlock, buyers can purchase a new Redrow home (up to £750,000) with a 5% deposit and a 95% LTV (Loan to Value) mortgage. Redrow will guarantee a portion of the mortgage to make sure your interest rates remain competitive. The scheme is applicable to selected new build homes and plots at a range of developments, so speak to a member of our friendly sales team to find out more.
First Homes Scheme
There's also the First Homes Scheme, which could help first time buyers pay at least 30% less than the market price. The government scheme is only available to first time buyers, and there are some restrictions on household income. You'll need to secure a mortgage for at least 50% of the purchase price. The scheme is available at selected developments, so contact the team at your preferred development for more information on how to apply.
Help to Buy - Wales
The Help to Buy - Wales scheme lends you up to 20% of the value of a new house to add to the 5% deposit you need to qualify. You can repay this equity loan any time within 25 years (the usual length of a mortgage). If you sell your home, you repay the loan from the proceeds of the sale (though remember that house prices can fluctuate). There's no interest to pay for the first five years of the equity loan, which helps to keep down the costs of moving.
With your 5% deposit and the 20% Government loan, you will only need to get 75% from a lender (a bank or building society) to buy a new home. You will need to fund at least 80% of the cost of the property using a combination of deposit and a repayment mortgage. Help to Buy - Wales is available on new homes up to the value of £300,000. The home will have to have at least a 'B' EPC rating - Redrow homes are all built for energy efficiency.
First time buyers now also benefit from Stamp Duty relief, which makes moving into your first home more affordable. See details here.
How much do first time buyers need to save?
Let’s return to that deposit you'll need to secure before you buy. According to the Office for National Statistics, £285,000 was the average UK house price as of December 2023. Based on that figure, the average deposit would need to be at least £14,250 (to meet the 5% threshold of Deposit Unlock, for example).
You can also fund the purchase of your first house with a gifted deposit from a family member or friend - you will need to declare this during your mortgage application process.
How to save for a deposit
There are plenty of ways to save for a house. However, if the amount of savings you need still looks daunting after you've started saving up, it may be that you need to lower what you spend.Think about your biggest expenses – where does most of your money go? For example, paying rent to a private landlord is expensive. You may be able to reduce this by getting a housemate (or moving in with someone else yourself).You could also consider moving back in with your parents or other relatives. While this may sound like a backward step, it may help achieve your house buying goal and you will be able to work out in advance just how much you can save.There may also be cheaper properties to rent, either with another private landlord or from your council or a local housing association, if you are eligible (you may need to check).
Saving goals for first time buyers
One of the most challenging things about becoming a first time buyer is saving up for that initial deposit and then applying for all the paperwork. There are specific first time buyer mortgages you can look for, and as mentioned above there are several schemes in place to help you get your foot on the ladder as quickly as possible.
Realistically, you will probably have to scrimp and save a little to get your deposit ready. Remember, any short-term cut-backs you make to the way you live will help you get what you really want: your own home! And once you're in, there are plenty of ways to cut down on costs long-term - for example energy efficient home products to save on bills. Redrow new homes are also super efficient and will help cut down on energy bill costs.
Though saving can be daunting, becoming a first time buyer is one of the most exciting times - here are our top tips on getting ready for your new home.
Find a Redrow development near you to start choosing your dream first home, and get in touch with the team to learn more about available first time buyer schemes.
