If you are thinking about buying a house and getting on the property ladder, you might be concerned about how difficult this could be. Many first time buyers feel like they are hitting a brick wall before they can even own one.
You may not know how much you can borrow or what fees you will need to pay. However, financial support and government schemes are available for first-time buyers to help them buy their first home.
Stamp Duty Relief
First-time buyers benefit from Stamp Duty Land Tax (SDLT) relief on a home with a purchase price of £500,000 or less.
There is no stamp duty when the purchase price of your first home is £300,000 or less. If the purchase price is between £300,000 and £500,000, you will pay a 5% stamp duty, but only on the amount that exceeds £300,000.
This means that if your house’s purchase price is £400,000, you pay 5% stamp duty on £100,000. You can calculate what you will pay using the government’s Stamp Duty Land Tax Calculator.
Financial Support For First Time Buyers
Three of the most useful first-time buyer schemes include:
Right to Buy/Acquire: For tenants in England, Northern Ireland, and Wales, you can buy your home from the local council at a discounted price.
Help to Buy scheme: First-time buyers can borrow 20% (40% in London) of a new build house’s purchase price, interest-free for the first five years. The house’s purchase price must be less than £600,000, and you must be able to put down a 5% deposit.
Shared Ownership: You buy part of a rented property with a mortgage and pay a reduced rent each month. You can buy a larger share later, up to 100%. Your income must be less than £80,000 (£90,000 London).