What A First-Time Buyer Needs To Know

Posted on February 14th, 2018 by Duncan Bruce

As a first-time buyer you are bound to have a plethora of unanswered questions racing around your head, such as how much should I save? Can I afford my mortgage repayments? Will there be unexpected costs? Here we aim to answer a few of those questions and help to put your mind at rest.

How much money do you need to save to buy a house?

Saving for your house deposit can seem like a daunting task. Mortgage providers often ask for a minimum deposit of 5% of the value of the property, ideally preferring around 20%.

For a house worth £160,000 this would be £8000 (5%) up to an eye watering £32,000 (20%).

The size of your deposit is imperative to getting a good mortgage deal. Although putting down a 5% deposit seems a lot more feasible than 20%, it can be harder and riskier in the long-run with bigger mortgage repayments and rising interest rates.

Things to consider when buying a house for the first time

As well as ensuring you have enough money for your deposit, there are many other costs that come with buying a house, such as:

  • Solicitor’s fees
  • Mortgage fees
  • Estate agent fees
  • Surveys and valuations

Hidden costs of home ownership

It’s also important to remember the hidden costs of owning a home. There is more to buying a house than simply affording your mortgage repayments. You need to budget for:

  • Council tax
  • Buildings and contents insurance
  • Maintenance and building work
  • Utilities
  • Internet, TV and phone bills

A potentially big and often overlooked cost when buying a new home is stamp duty, the Autumn Budget 2017 announced stamp duty land tax relief for first-time buyers.

From 22 November 2017, stamp duty land tax will be abolished for first-time purchases up to £300,000 and the existing rate of 5% will apply between £300,000 and £500,000. The relief will not apply to properties above £500,000.

What is the best way to buy a house for the first time?

There are a variety of schemes to help first-time buyers take their first step onto the property ladder, such as the Government’s Help to Buy scheme.

With a Help to Buy Equity Loan, the Government will lend you up to 20% of the value of your newly built home, meaning that you only need to get together a 5% deposit. The beauty of this scheme is that you won’t be charged any loan fees on the 20% loan for the first five years.

However, if the property increases in value you still need to pay back the same percent that you borrowed. This means that you can end up paying back a lot more than you originally anticipated.


Gordons Property Lawyers are highly experienced at what they do. Speak to one of our professional team today by calling 01628 308 380.