TAKING THOSE FIRST STEPS

The property market remains a challenging environment to navigate, particularly for first-time buyers. Property expert David Hannah, Group Chairman of property tax specialists, Cornerstone Tax, provides his top five tips for those looking to step onto the property ladder.

1. Understand what you can afford

“You need to understand what you can afford; this is a very important tip. If you take on too much mortgage debt and put too much of a strain on your monthly or weekly budget, you’re going to run into trouble and that’s just going to lead to a load of stress. Every first-time buyer needs to make sure that the mortgage payment that you are committing yourself to is a reasonable fraction of your earnings. If you stretch it too far or don’t fix the rate, you could find yourself in trouble.”

2. Stamp Duty

“Make sure that your stamp duty calculation is correct. It’s little known that one-in-four stamp duty calculations on purchases are wrong, and with first-time buyers paying 5% on the amount of the purchase price on properties between £425,001 and £625,000, it’s an important cost to consider. If you have a particular property in mind or a particular type of property, it’s worth getting it calculated definitively. It’s important to do this before you go to your mortgage application because it could have a key impact on you not getting the right figure and walking away from a deal that you could actually afford.”

3. Understand your budgets

“Understand how you budget and how your budgets can run away with you. New-build homes tend to come with guarantees meaning that minor repairs and defects are covered out of the developer’s costs. If you buy a second-hand home, however, these costs can’t be claimed from anybody else. If you don’t have a proper survey and an understanding of the state of repair of the property before you buy it, you could be faced with substantial bills for such things as rewiring or a new roof if you didn’t have that anticipated before the purchase.”

4. Consider renting a room

“Realise that there are ways to make your homeownership more affordable. With the increase in house prices over the last 50 years and the shortfall in available rental properties, many homeowners are turning to renting a room. This is obviously an intrusion on your