In a recent article in The Times it appears cash is king for the older homebuyers.
According to recent research carried out by Savills Estate Agent, of the total of £312 billion spent in house purchases in the UK in the last year, £138 billion was made up of cash buyers. These are individuals who don’t have to rely on equity or mortgage debt.
Lucien Cook residential research director at Savills is quoted as saying. “ The situation is unlikely to change in the near future. In a tougher more regulated mortgage environment where homeowners are struggling to move up the ladder and first time buyers are now facing significant hurdles cash buyers are now making up the larger proportion of the housing market.
So who are these cash buyers?
Lucien Cook continues, “They are mostly older householders who benefited from the boom in home ownership in the 2nd half of 20th century. They are living longer and watched their house prices grow, meaning they are sitting on piles of equity”
In London alone outright cash purchases accounted for 47% of the total spent on house purchases. According to the report this was nearly £30bn spent by cash buyers , nearly three times the amount of mortgage debt lent for the same period.
What does this mean for first time buyers.
It’s a long road with the required deposits increasing year on year. With the average deposit for a first time buyer currently at 65% of their household income in London, they are now relying on the bank of mum and dad to help them out. But what happens if that bank is not available to you?
Here are some top tips for a first time home buyers
- Work out how much deposit you’ll need to buy a house
- Don’t forget to budget for the other costs of buying a home
- Solicitors fees
- Removal costs,
- Buildings insurance,
- Furnishing and decorating costs,
- Mortgage arrangement and valuation fees.
- Stamp duty
- Work out your monthly repayments. Can you afford them?
- Check out any home buyer schemes
- Affordable housing schemes
- Help to Buy Schemes
- Shared ownership schemes
- Choose the right kind of mortgage. Talk to the experts.
- Check the detail of Freehold vs Leasehold and the implications.
- Do you need someone else to guarantee your mortgage . This is when a parent, guardian or close relative agrees to be responsible for paying the mortgage if you can’t. This is where your mortgage broker will come in handy.
Clarks of Amersham has a free no obligation provisional booking service. Give us a call on 01494 774186 and we can book you in.
Don’t forget you can to fill in our online estimate form and we will get straight back to you with a guide price.