Millennials have faced many challenges in their descent into adulthood. Whether it’s being insulted for using social media too much and liking avocados, feeling as if they are the “in-between” generation when it comes to the technology burst, or even their apparent struggle to make it onto the property ladder, they’ve heard it all. However, in regards to that last point, studies are now starting to suggest that now is, in fact the perfect time to be a first time buyer trying to climb aboard the property ladder. Here are some of the reasons why now is in fact, apparently a great time to be a first time buyer.
Low Interest Rates
It would appear that other than property buying companies such as Speed Property Buyers, millennial first time buyers are now the perfect people to target if you’ve recently put your property on the market.
A lot of this, is actually to do with how low interest rates currently are. In 2017, we saw a rise of interest rates by 0.25% – yet despite that, they’re still incredibly low. If you take a look at properties for sale and mortgage deals that are available now in 2019, you’ll see that they’re a lot cheaper than they once were, and that there are so many good deals out there for young first time buyers to sink their teeth into. It is, however, advisable for those seeking a mortgage to lock themselves into a fixed rate that they can afford saying as interest rates are set to rise. This means now is actually the ideal time to set your fixed rate as a first time buyer, making it as much or as little as you can afford. It might be two years, five years or ten years – whatever is best for you. The important thing to remember is to keep the fixed rate affordable. That way you can protect yourself from possible interest rises.
The ISA’s Available are Incredibly Helpful
The help to buy ISA is now available to help boost young people’s savings and get their foot on the property ladder – but just how does it work?
Well, the help to buy ISA is only available for those who are over the age of sixteen, are UK citizens and are first time buyers. It’s like a savings account, with a difference.
The difference being, that whatever you put into the account itself, the government will boost it by 25% – so for every £200 you put in, the government will up it by £50.
The lifetime ISA is again, similar, however there are loopholes to watch out for. It’s the same in the respect that the government will increase your savings by 25%, however, this is only if the money has been in the account for over a year. Unfortunately if you find and can afford a property before the year is up, and you go to withdraw your funds you’ll not only not receive the bonus, but you’ll also be penalised a fee. The best way to avoid any complications is by reading up on the options before making a decision – and remember to consult the small print too. If there’s anything you’re unsure of, be certain to consult the bank or building society that you’re dealing with.
The Elimination of Stamp Duty for First Time Buyers
Back in 2017, Theresa May the then prime minister, announced that first time buyers would no longer have to pay stamp duty, if the property they’re buying is worth less than £300,000. This has saved first time buyers a fair sum in recent years, in comparison to what they’d have had to pay in the past.
However, if you were a first time buyer who was to purchase a property between £300,000 and £500,000 (and generally, what are the chances?), although stamp duty wouldn’t be charged for the first £300,000, you’d be charged 5% for the remaining amount. Considering the small amount of first time buyers – particularly young people – who could actually afford to pay that much for their first home, it’s not a bad deal at all. It’s been noted that in the years following the introduction of this law, thousands and thousands of people who are first time buyers have saved an average of as much as £1,700 in the costs they’re paying to purchase their first home. When you think about how expensive the property buying process is overall, that’s a fair saving.
So there you have it – it’s not such a bad time to be a millennial first time buyer after all!