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

Tony Harker Independent Housing Consultant

Minnie Dando Head of Marketing & Communications, Hyde New Homes

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

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

Where to start?

QI have been renting a one

bedroom flat throughout the pandemic and found it expensive and really difficult to live in. The pandemic really made it clear to me that I need to find a well-designed property with outside space to buy, so I can make it a comfortable home. I’d like to find a home which costs me no more than £1,200 pcm – what I am currently paying to rent. I have £8,500 in savings – where do I start?

Joanne Mitchell, Camden

AWe have been restricted to our homes for some time now and like you, many have found their homes are not suitable for home working and many people are missing outside space that’s vital for our wellbeing. This pandemic has really exposed a shortfall in the design of some homes, and buyers are now much clearer about what they want in a home, which is good news as often buyers had no idea what they needed when viewing. Having a wish list will help you reduce your search and focus on specific properties. It doesn’t mean you will get everything you want as this depends on your budget, so be realistic and know what is an “absolute must-have” and what you may be willing to compromise on.

There are a few affordable homeownership product options for first time buyers – these include Help to Buy: Equity Loan, shared ownership and the First Homes scheme. Based on the limited information I know, I think shared ownership may be the best option for you. Your savings will need to cover your legal costs, mortgage deposit, any lenders fees and moving costs, and don’t forget buying a home is only the start – you then need to buy furniture and all the things we take for granted – pots, pans, etc which can soon add up. Before you start looking at properties, speak with a mortgage broker who specialises in affordable homeownership so you know what price range you could potentially look at. Your substantial payments on rent can certainly secure you a home of your own.

Next stage is to look for your new home using affordable homeownership property portals such as sharetobuy.com, keaze.com or regional Help to Buy agents via helptobuy.org.uk, or look through First Time Buyer magazine – all these sources give you useful information about buying. When you find a property you are interested in, contact the developer, housing association or local authority selling the property – you will need to register with them. Once registration is complete, they will arrange a viewing.

Best of luck with your search to find your dream home.

Tony Harker

How does buying via shared ownership work?

QDuring the pandemic I have

been working from home and I have managed to save about £10,000 – I really want to buy a place of my own but I am not sure I can achieve this with the money I have saved. A friend mentioned shared ownership but I am not sure how that works. Can you help please?

Nick Reid, Haywards Heath

AIt’s really super to hear that you have made the most of an unequivocally bad situation and focused on saving money for a deposit towards your own home.

Shared ownership presents the opportunity to purchase a share of the equity of your home, and the deposit required is substantially lower than it would be if you were to buy outright. For example, if the home you are looking at is on the market for £400,000 and the share equity being offered is set at 25%, your £10,000 would cover you, if the deposit requested is 10%. If you were to buy the property outright at its entire market value, you would require a deposit of £40,000. In this respect, shared ownership is presenting you with the opportunity to buy your own place now, rather than being constrained to wait until you have saved up £40,000.

As a shared owner, you will be a leaseholder, as you would if you were to buy an apartment outright, and be subject to the terms of the lease, including paying service charges and ground rent. Look out for factors which may push up the costs of the service charge, such as multiple lifts, concierge amenities or extensive communal areas. You will also have to pay ground rent. Again, look out for opportunities where the lease is set for a term of 999 years, as you will make substantial savings in the long run.

You would also need to factor in paying a subsidised monthly rent on the share of the property which you haven’t yet purchased, to the provider you are buying from.

This may sound like a lot, but bear in mind that mortgage payments on an equity share are exponentially lower than for the full value and in many cases, the sum of your mortgage and the rent you pay monthly,work out at the same or less than if you were to rent on the open market. There is also the added benefit of you being able to decorate and furnish your home to your taste and you may enjoy spending more time in it, which would perhaps enable you to save more money and buy further shares. This is called staircasing and you can do it in bites or save up until you can purchase your entire home outright. You also have the opportunity to choose whether to pay Stamp Duty on your share or on the full market value at the purchase stage.

Rather complicated, I hear you think? At Hyde, we are fully aware that this is a specialist process and our in-house team are fully trained, to offer support to customers. We will be there from the enquiry stage, helping you make the right choice based on your personal circumstances, through the entire buying process, as well as in the months following your move into your new home. We know that you may prefer to self-serve, rather than speak to us, so we also provide fully automated facilities for you, from booking your viewing to following the progress of your purchase and signing your documents, so that this does not eat into precious leisure time.

It’s worth shopping around for homes where a lower deposit may be on offer, permitting you to buy a home at a higher value or considering more flexible options now available from the Government, such as the possibility to buy a minimum 10% share equity.

However, there are associated terms which you should familiarise yourself with, such as household income cap and Stamp Duty exemption. The good news is that the number of lenders supporting these options is always increasing; again our consultants will be able to advise further on this. Good luck with your home hunting!

Securing a mortgage

QMy partner and I have

managed to save some money towards a deposit over the past couple of years and feel ready to buy our first home. With property prices being so high in London, we are looking for alternative routes on to the property ladder rather than buying outright, but have no idea where to start in terms of getting the process going or securing a mortgage. Can you advise on this please?

Sophie and Matt Daley, Croydon

AAs first time buyers, you have a few options available to you. Shared ownership and incentive schemes such as the Help to Buy: Equity Loan can be great ways to step on to the property ladder in London. There are a number of housing associations, such as Origin Housing, which offer shared ownership homes with low deposits, from as little as 5-10% of the share bought. Eligibility criteria apply, for example, to buy a shared ownership property in London, your annual household income must be less than £90,000, or £80,000 outside of London.

When it comes to securing a shared ownership mortgage, we recommend speaking to a specialist financial adviser, who will have access to an extensive list of mortgage providers and can help you compare the options that are available to you. Don’t worry if you aren’t sure at first, the adviser will be on hand to answer any questions you have and support your application process.

The most important thing is preparation. Take the time at the start of your house hunt to do some research to understand the current market. You can browse all our available homes on the Origin website to get a feel for the types of properties you are interested in.

I’d also recommend you put together a budget plan to forecast savings goals. Opening a separate savings account to pay into regularly is also a good way to be organised and keep track of your finances. Shared ownership is a great way to secure the home you’ve always wanted and by getting the mortgage process right, it can be straightforward to do so.

You can find more information on our website at originhousingsales.co.uk.

Minnie Dando

Simon Scott