For every prospective homeowner, buying a house can be quite a daunting task especially if it’s your first purchase. In London, the real estate market isn’t much rave reviews with many mainstream media companies describing it as a daunting terrain consisting of numerous empty modern houses owned by Russian mafias and oligarchs, dubious real estate agents who are highly egoistic and desperate young homebuyers.
While you might have formed an opinion of the real estate market in London based on these reviews, it is simply not always the case.
Since the pandemic broke out, house prices in the UK have soared—in addition to the increase in loan-to-value mortgage rates—posing many new difficulties for first-time buyers. Nonetheless, if you’re out looking for your first standard house in London, here are some important tips to help you navigate the ever-demanding real estate market.
1. Have a Good Savings Plan
It becomes easier to turn your hopes of buying the perfect London home from a pipe dream to a vivid reality once you create the right financial plan. The decision to buy a home is an expensive one regardless of which country you are, therefore having the right savings plan would be crucial in ensuring you don’t run into unnecessary debt. s
Create a savings account if you don’t already have one and make monthly direct debit into it. When estimating mortgage affordability based on income, having a good savings plan would help you get approved faster—since you’re now able to make a larger deposit.
2. Create a Budget
As you continue to grow your savings account, create a detailed budget that includes all your expenses during the buying process—and even in your first few months of living in your new home.
From utility bills, insurance and mortgage payments to cost of furniture, be sure to cover every possible expenditure. By creating a budget, you would have a clear idea of what and what not to spend money on, even months before you’re reading to move into your new house.
3. Take Advantage of Government Schemes
In the UK, the Help to Buy programme is a great initiative for many home buyers and not only first-timers. However, it makes things a lot easier for those who are looking to buy their first home in London.
With home prices in London continually rising, the government has subsidized the financial impact for buyers by providing larger equity loans between 20 – 40 per cent. Applying for this loan would greatly reduce the overall cost of your mortgage and the financial burden of monthly mortgage repayments.
4. Carry Out Proper Mortgage Research
When looking for the best mortgage deal, there’s a lot of important factors to consider such as exit penalties, repayment period, interest rates and other additional fees.
Without carrying out thorough research on mortgages, you could easily end up in a financial mess despite going for a deal that seemed too good to be true. Spend quality time learning about the different mortgage types and how they can be of benefit to you.
5. Buy for the Future
It is no news that the journey to buying a house can be quite rigorous and that’s why it is necessary to take several steps back to ponder on just how important owning a home would be for you in the long term.
The decision to buy a home isn’t a cheap one and if you make the room decision, it can have irredeemable consequences. Therefore, ensuring your buying a home for the future that would be comfortable for you to live in and eventually trade-off.