A short piece from our Associate, Natalie, with great information regarding first time buyers.
One of the most satisfying parts of my job is being able to help first time buyers secure their first home. Being a first time buyer is an exciting, yet daunting time, which I never under estimate. Of course, the Aberdeen market has not been as buoyant as we would like in recent years, but this has allowed for a very ‘buyer friendly’ market and an ideal time for first time buyers to secure their first home.
As well as first time buyers having the pick of the Aberdeen and Aberdeenshire market at the moment, there are also some helpful options available to the first time buyer to help make the jump onto the property ladder that little bit easier. There are often many hurdles to overcome in order to be in a position to purchase a first home, money being the biggest in most circumstances, so I always advise clients to make the most of the options available to them.
Some of the options to explore are:
This is open to first time buyers who struggle to fund the total cost of the purchase (even with a traditional mortgage). This scheme allows the buyer to receive assistance from the Scottish Government in order to purchase their home. Normally the buyer will pay between 60% and 90% of the cost, with the assistance of a traditional mortgage lender, and the Scottish Government will fund the remainder.
These have become extremely popular amongst first time buyers in recent years and are certainly a ‘no brainer’ for those thinking about purchasing their first home. Most banks now provide the Help to Buy ISA and they are very easy to open. Saving money into a Help to Buy ISA means that when the buyer is ready to purchase, the Scottish Government will boost their savings by 25%. So, for every £200 saved, the buyer will receive a government bonus of £50. A maximum bonus of £3,000 can be received towards the purchase.
Land and Buildings Transaction Tax (LBTT) can be crippling for first time buyers, as it is an extra lump sum of money required at the time of purchase (often not an insignificant amount). It is brilliant that Revenue Scotland are now providing a relief specifically for first time buyers, which raises the zero tax threshold for first-time buyers from £145,000 to £175,000. Those buying a property above £175,000 will also benefit from the relief on the portion of the price below the threshold, meaning everyone will benefit from the relief by up to £600.
I would encourage my clients to consider these options well in advance of purchasing. When the time comes to push the button, it is my job to make sure the legal jargon and the process as a whole is fully understood by my clients so that all worries are alleviated, making the process as enjoyable as possible.