Agony Agent

Readers put their property questions to our guest panel of experts: solicitors, mortgage advisers, property gurus and Help to Buy providers

THIS MONTH’S PANEL OF EXPERTS

Simon Scott, Assistant Director of Commercial & Property Marketing, Origin Housing

Martin Fillery, Martin Fillery, Director Shared Director Shared Ownership, Ownership, Leaders Romans Leaders Romans Group Group

Rupi Hunjan, MD, Censeo Financial

TEST THE PANEL

We need your questions...

If you have any queries, or diffi culties in understanding the property buying process, our panel of experts is waiting to help. Send our team your questions on buying property, Help to Buy, legal issues, or your fi nancial problems and we’ll fi nd the best person from the panel to give the advice you need.

Email your questions to: lynda@ rsttimebuyermag.co.uk

Can we afford to buy?

QMy partner and I have been

renting together in London for four years, but now that we are expecting our first child, we are keen to get on to the property ladder. However, with the cost of living increasing, we’re unsure whether this is feasible for us as first time buyers. Can you advise please?

Jenna Hill, Hendon

AIt’s no secret that the cost-of-living crisis is causing added strain and difficulties for those eager to take their first step on to the property ladder. Rising mortgage rates and inflated property prices have created further financial barriers for those who may have previously been able to afford to buy.

According to Yahoo, property prices in the UK are at an all-time high, especially for first time buyers, for whom prices and rents have jumped three times faster than pre-pandemic, with asking prices up by £17,557 on average.

Fortunately, for first time buyers, there are Government-backed homeownership schemes that can help. Shared ownership is a part-buy, part-rent scheme which enables eligible buyers to purchase a percentage share of a property, while offering significant benefits in comparison to renting or buying outright.

Firstly, the typical deposit for buying through shared ownership is often far lower than buying on the open market as it is based on the value of the share you buy, rather than the full market value of the property. For example, at Origin’s development Harrow and Wealdstone Heights, the minimum deposit for a one bedroom shared ownership apartment is just £4,031.

Plus, the shared ownership scheme is designed for new build developments, which are more energy efficient than older properties, a hugely attractive reason to consider shared ownership as the cost of living increases. This means that buyers can enjoy both a reduced impact on the environment as well as savings on energy bills.

For more information about Origin’s shared ownership properties, please visit: originhousingsales.co.uk/developments.

What should I do if I am struggling financially?

QThere is so much going on geopolitically at the

moment, affecting financial markets and services, that we seem to be facing price increases from every angle. I am starting to feel a bit overwhelmed and I’m really beginning to worry what would happen to my new home if I lost control of my finances?

Louise Walker, Nottngham

AIf you feel you are or may start to face financial hardship, there are a few key things you can do to help to manage your situation.

Firstly, complete a monthly budget planner, look at how much money you have coming in each month versus your outgoings to identify any potential shortfalls.

Look at any non-essential outgoings such as streaming subscriptions, magazine subscriptions, store cards etc to determine what you can live without. Speak to your mobile and internet providers to see if they have better deals you can access. And if you have any credit cards or car loans, speak to those companies to see if your payments can be reduced.

Speak to your mortgage lender to let them know about your position to find out if they can assist in anyway, perhaps via a payment holiday? Most lenders will employ qualified debt management teams who are well positioned to help people facing financial hardship.

If you are a shared owner, speak to your housing provider to find out what advice they can offer – in some instances, they may be able to buy-back some of the shares in your home to reduce the financial burden.

Speak to your local authority to find out if there are any benefits you can access which can help towards rent or service charge elements.

The most important thing is to realise that you are not alone, and help is out there, that financial hardship is more common than you would think – acknowledging it is the key to unlocking that help.

Martin Fillery

Different types of mortgage

QI am a first time buyer and

about to start my journey to homeownership. Can you explain what types of mortgages there are and what is a mortgage product?

Louisa Meldon, Leicester

AMost homebuyers these days take out repayment mortgages, which is where you pay back some of the loan and some interest each month. The other main alternative is an interest-only mortgage, where you just pay the interest each month, but this doesn’t repay any of the loan, so at the end of the mortgage term you would have to repay the loan amount.

The mortgage product is the actual mortgage you are taking out. These will vary by interest rate and terms and conditions and will differ between each financial institution.

The rate can rise or fall and generally is considered against the Bank of England base rate. Currently (autumn 2022) the Bank of England is raising the base rate to try to combat rising inflation and therefore lenders are raising their interest rates. All lenders have a standard variable rate (SVR), but this rate varies between different lenders.

A lender will offer several types of mortgage products sometimes referred to as deals. These include:

Fixed rate mortgages. This is a mortgage where your interest rate is guaranteed to stay the same for a set period. You can usually fix for two, three, five or 10 years. Fixed rates are the most common type of mortgage for those wanting the same monthly payments to help with managing their finances and giving peace of mind.

Tracker mortgages. This is a mortgage where the interest rate you pay is based on an external rate – usually the Bank of England base rate – plus a set percentage. We have seen the Bank of England base rate continue to rise this year so if you opted for this type of mortgage product your monthly payments would rise by a percentage above the base rate. If the Bank of England base rate falls, then so would your rate, therefore your monthly mortgage payments would also reduce.

Discounted rate mortgages. This is usually a variable rate with a set discount applied to it during a set period. Again, this can fluctuate depending on the lender’s standard variable rate which is usually determined by the Bank of England base rate.

Do go to censeo-financial.com where you can find a lot of information.