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First Time Buyers Saving Thousands, Thanks To New Build Homes

Mortgage deals and cheaper running costs helping more first-time buyers on to the housing ladder.

The gap between house prices and incomes has continued to expand over the past twenty years and coupled with stricter lending to first-time buyers, fewer young people have been able to step onto the property ladder.

However, according to HBF, a new generation of first-time buyers are viewing new build homes as “the answer to their housing affordability problem”. The Help to Buy Scheme gives first-time buyers the chance to buy a new build home with a 5% deposit. The Government will then provide an equity loan for up to 20% of the purchase price.

With a combined deposit of 25% of the value of the property, first-time buyers are able to access a range of mortgages with lower interest rates and more affordable monthly payments, saving approximately £350 every month. Furthermore, research shows that new build homes are generally more energy efficient and can save first-time buyers up to £5000 per year in utility bills.

New build homes are also built for modern living. Everything inside is new and fit for purpose which means first-time buyers do not need to make allowance for major repairs or ongoing maintenance. Indeed, New Homes Week put the savings figure at £50,000.

According to the BBC, the latest figures show that just over 80% of the 134,558 properties purchased using the Help to Buy Scheme were first time buyers. Of these, 16,000 were new build homes, 81% of which were purchased by first time buyers with a deposit under £12,000.

Without a doubt, it is a huge challenge for today’s young people to step onto the property ladder. Since 2000, house prices have risen by more than £55,000 with first-time buyers needing to save £20,000 for a deposit and most are aged at least 30 before they become a homeowner. Deposit requirements far outstrip earnings but new build homes could be the solution. What will happen when the Help to Buy scheme ends in 2020?

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