What options are there to get yourself on the property ladder?

Currently, first-time buyers are driving the housing market, borrowers took out £300 million more in mortgages than last year, according to banks and building societies. Cheaper loans and government schemes with lower interest are encouraging buyers to save and get themselves onto the property ladder. From special tax-free savings accounts to shared ownership and innovative mortgages, there are options available to help buy your first home. Take a look at these top 5 options that have already helped millions…

Help to buy Lifetime ISA

If you’re saving towards your dream home, a lifetime ISA is a good choice, as you can get a boost of up to £1,000 free cash a year. You can save more into a LISA each year, £4000 more than you can into a Help to Buy ISA. You can also use the Lifetime ISA to purchase a high-value home at up to £450,000. To qualify buyers must be aged under 40, but over 18 to qualify.

What can you get out of a Lifetime ISA?

– You can transfer between providers.
– You get a free cash top-up.
– You can choose between cash savings and stocks and shares.
– You can deposit £4,000 a year, rather than face a monthly limit.
– It’s a tax-free wrapper
– You can purchase a property worth up to £450,000 anywhere in the UK
– If you and your partner both first-time buyers purchasing a property together, you can both open one and save – effectively doubting the bonus.

1. Help to buy ISA

These accounts help you save for a deposit and you benefit from the Government topping up your savings by 25%. You can put away an initial sum of £1,200. And can then save £200 per month after that, the government will give you a maximum bonus of £3000 once £12,000 has been saved.
Help-to-Buy ISA’s are also available for each first-time buyer, and not each household, this means if you and your partner were saving for your first home, you could each open a Help to Buy account and take advantage of the government schemes bonus. But Help to Buy ISA can only be used towards the total cost of the property, and not any additional fees such as solicitors and estate agent fees, or stamp duty etc.
What can you get out of a Help-to-Buy ISA?
– You get free cash to top up your savings
– Available from a number of banks and building societies
– These savings plans are tax-free
– You can transfer your ISA from one provider to another to chase the best rates
– This scheme isn’t limited to new-build homes

2. Shared ownership scheme

This scheme allows you to purchase a share of a new or existing home from a council or housing association, normally between 25% and 75% of the properties value. After living at the property for a certain period of time, you have the option to buy a bigger share of the property.

How can shared ownership scheme help you?
– You are only buying a share of a property, therefore a smaller deposit is required.
– Should make buying a home much more affordable.

3. Post Office Family Link Mortgage

If you are an aspiring first-time homeowner who can afford to repay a mortgage but you’re struggling to save enough for a deposit then the post office family mortgage could be the correct route for you. It allows you to secure a mortgage without a deposit by taking advantage of the help of your family. For the first five years, you will make two separate repayments, one towards the assistors mortgage (which is interest-free), and one towards your own mortgage, where interest rates will apply. With these arrangements you can use the equity in your parents’ home to help you get a deposit together, this means you don’t have to use your savings, and you won’t be draining your families hard earned savings.

What should you think about before applying?

When applying for a mortgage a lender will check your credit history and assess how much of a risk you are. These checks have become increasingly harder on buyers, due to the financial crisis back in April 2014. Furthering this the Bank of England also bought in restrictions, limiting the amount you can borrow. This will depend on your income, where banks will give you no more than 4.5 of your annual earnings. Buying a property is one of the biggest financial commitments a person can make and can be a daunting process for first-time buyers, so it is wise to seek professional advice, who specialises with in-depth knowledge of the market and who can look at a range of mortgage products to help you find your best deal.

New homes developers say higher interest rates and Brexit isn’t a threat for first-time buyers

This year has left much uncertainty in the housing market, with not only the interest rates being pushed up by the Bank of England but also the countries uncertainty around the Brexit ‘no deal’. In turn, this has led to mortgages rates sky high and UK wage development low, this is thought to of made it increasingly difficult for aspiring homeowners.

The increase in borrowing will have an immediate impact on households and is expected to dampen economic activity over the coming months. However, with scarcity at risk, there has been a high growth of first-time buyers, cashing in on the governments Help-to-Buy governments scheme. Estate agents across the UK, have not only seen a significant increase in new build homes being sold, compared to last year. But also housing asking prices across the market have also fallen by 2.3 pc this month according to Rightmove.

Mortgage approval rates for July showed another month of growth, which shows first-time buyers are still finding their way onto the property ladder. On the other hand, re-mortgage approvals fell by 7.3% July, showing that it’s becoming difficult to upgrade your home, rather than buy your first home.

Richard Carr chief executive of Fortitudo says this is a positive direction for the housing market for first-time buyers and Fortitudo will continue to help the housing market to grow, with our new build developments continuing to be associated with the Help-to-Buy Government schemes.

Top tips for getting on the property ladder in 2018

Planning to buy a first home can be as daunting as it is exciting for first-time buyers but there are a number of simple steps people can take to be 100% prepared and make the process run as smoothly as possible. With 2018 came the abolishment of stamp duty for first-time buyers, which has likely motivated aspiring homeowners to begin exploring how they can make their dream of owning their own home a reality. Check out these top tips to go from dream home to a real home this year.

1. Save save SAVE…
Saving for a deposit is undoubtedly one of the scariest and biggest hurdles anyone will have to overcome.

2. Research affordability hotspots
The property market around the UK is constantly changing, when buying a property, it is important to understand everything there is to know about the area you are hoping to settle. Try researching 3 potential areas to see which has the most stable market.
3. Get the most suitable mortgage to your circumstances
Take some time to really investigate the variety of mortgages that are available for first-time buyers. Some mortgage providers such as Virgin Money, have been developing innovative mortgages to help address challenges that first-time buyers in the current market.

4. Understand the credit score
Before getting a mortgage, you will be credit checked so now is the time to check your credit report and ensure all information is up to date and is accurate LINK TO CLEARSCORE. A slightly bad credit score can lead to mortgage lenders turning you away. It is the deciding factor in not only getting approved but also the rate of the mortgage you are offered. Now is the time to start paying any outstanding debt, be sure not to miss any payment agreements and all phone bills, utilities, and generic direct debits must be paid on time. Try to make more then the minimum repayment in 6 months prior to your mortgage application.

5. Do your calculations
Once your savings pot is up and running, consider using an affordability calculator to get an idea of how much you’ll be able to borrow based on your income and outgoings. This will give you a clear guide as to what you can really afford. Once on the property ladder it can only get easier…

6. Know what your spending
One of the first steps to feeling more in control of your finances is to monitor your spending – plan in advance and review all spending. There are many saving cards, which do this for you, the saving card of the year is Monzo; an application platform that tracks your every move.

Richard Carr tells his 7 top tips for buying investment property

Buying an investment property continues to one of the smartest areas to invest your money. An investment property should be about increasing your wealth and securing your financial future. However, you need to keep in mind how effectively you are with managing your investment, which will determine whether or not the investment helps you reach your financial goals. The cost of owning an investment property can be surprisingly low after you take into account your rental income and tax deductions you’ll be entitled too. Check out Fortitudo’s tips for helping you bag a feasible investment…

1. Choosing the right property at the right price

Investing in property is usually about capital gain, so choosing the right property is vital. It is about choosing the property that is most likely going to increase in value and is appealing to rent out. The key is to do your research, work out what everything is selling for in and around the area and then you’ll discover that you will be very good at working out what the property might be worth.

Lenders and mortgage insurers have valuable data on different locations and property developments. This information can easily be accessed to assist you to avoid picking the wrong investment property. Ensuring you have a steady rental income stream is also vital because this cash flow will see you through the holding of the asset, providing an income and become a safety net of cash if anything needs maintaining within the property.

There are many different types of property you can buy, which all have their pros and cons, These are worth overlooking potential investments. It’s important to note that your property needs to suits the demographics of the chosen area you intend to invest in.

• Some apartment units have a very low maintenance cost, but can be slightly higher than the generic home.
• Houses are more expensive to maintain but can be offered to students and families, depending on the client you wish to cater to.
• Land can provide no rental income but may appreciate more quickly if purchased in an area with limited supply.

2. Do your sums – Cash flow is always king

Investing in a property should be considered a medium to long-term investment, so you need to make sure you can afford to maintain your mortgage repayments over the long term. Once you own your investment property it can become quite inexpensive to keep, this is down to the tax reduction on many of the expenses and the rent that is earned. It is also important to note that rents tend to increase over time, leading to higher income. Don’t forget to take taxes into consideration when doing your calculations. These can change all the time, Stamp Duty, Capital Gains Tax, and Land Tax all need to be taken into consideration.

3. Finding a good property manager and let them take control

A property manager is usually a licensed estate agent and a professional in their field. They can give you ongoing advice, manage your tenants, maintain any issues, review rents, find you the right tenant from checking and referencing. Some estate agents offer this at a small percentage of a deduction of your rental price.

4. Understand the market and its dynamics

If you’re investing your hard earned cash into something, you need to know everything about it. Treat the list below as a starting point of considerations before investing.

• Do your research on other properties in the area.
• Speak to as many locals as possible.
• Visit local estate agents.
• Always consult professionals to do things you’re not sure on.
• Research independent information for online; average rents, property values, demographics and suburb reports.

5. Make the property attractive for renters

Always keep to neutral tones and keep the kitchen and bathroom both modern and in good condition. This will always attract better quality tenants, and also gives them the opportunity to make it their own. Remember this is not your home, it is simply an investment, therefore do not risk getting too involved into what it looks like.

6. Use the equity of another property

Leveraging equity from your personal loan or another property investment can be a great way to purchase your investment. It also displays to mortgage lenders that you are a good candidate to lend too, considering previous payments haven’t been missed.

7. Always look at the long-term goal

Remember to always look at the bigger picture, property prices do not always rise straight, having patience is vital in any investment. The longer you can afford to commit to a property, the better the investment will be for you.

At Fortitudo we have many different new builds that are available to buy off-plan, which will be a good investment for first-time buyers or buy to let investors. For more information please visit our website.

Richard Carr talks about 3 things you need to know about the UK housing market in 2018

Since the Brexit referendum has happened, the UK housing market has been experiencing some instability in certain areas. It has been facing major difficulties in the recent months in properties at the higher end of the spectrum and in certain geological areas. This, in turn, has resulted in uncertainty from buyers. Since 2016 the average price in the UK has gone up to over £220,000 per dwelling. Although this pricing has gone up between 2012 and 2017, the earnings growth hasn’t corresponded to this, making it extremely difficult for people to buy houses. Richard talks to us about 3 important aspects of the housing market that you could take advantage off.

A fixed rate mortgage might be the best option for you

• You remain stable for consecutive years.
• Can be used with buy-to-let properties too.
• More properties are being built and are expected to come to the market this year.
• First-time buyers can take advantage of schemes like Help to Buy to further augment choices.

Buy-to-let is still a viable option for investors

• Tax reforms left uncertainty for buy-to-let investors.
• Liverpool has increased in rents at 6.2% PA.
• Nottingham increased in rents at 6.2% PA.
• Cardiff increased in rents at 6% PA.
• Southampton increased in rents at 5.9% PA.
• Greater Manchester increased in rents at 5.9% PA.
• University towns remain a good place to invest in buy-to-let.

Affordable homes are available
• Local councils are working with private developers to make housing assessible for all.
• Shared ownership allows you to part-own or rent part of a home.
• Government schemes including Help to Buy.
• Areas such as the west of the UK are cheaper to live.
• Stamp duty has been abolished for first-time buyers if the property they are buying is less than £300,00.

 

 

 

Richard Carr talks about Fortitudo’s investment into Poole

For the first time in 12 months, it looks as though House prices are on the rise down south, especially in Poole, rising by 8.3% in the last 12 months. According to the National Statistics, the average property in the area sold for £317,561, which is nearly 50% higher than the UK average of £226,906. This is, however, making it increasingly difficult for first-time buyers to get themselves onto the property ladder.

Throughout the whole of the UK, there is an increase in house prices. However, the strongest growth regionally has shifted from London to the south west of England. Christchurch houses have risen by 5.9% in the last 12 months and April saw a 3.1% leap, selling their average property for £350,696. Whereas Bournemouth houses have risen by 3.6% since June last year and 0.2% in April. Although these properties will increase in value for current owners, it makes it even harder for first-time buyers to even think about saving for a deposit, not to mention all the other fees and extra’s that come with owning a home.

At Fortitudo we try to make property assessable for everyone and create property ownership possible for first-time buyers. There are a number of developments currently under construction in Poole and Bournemouth which will all be associated with Help-to-Buy. The government scheme allows first-time buyers to purchase a new home with just a 5% deposit, the scheme also recommends mortgages that would work with them to get everything done efficiently and less costly as possible. Most of our sites are associated with Help-to-Buy, you can find which development is most suitable to you below!

Help to Buy – Key points

– The fifth anniversary of the Help to Buy loan scheme is this year.
– You can borrow interest-free for five years.
– You can get on the housing ladder sooner.
– You could buy with a smaller deposit but get better mortgages rates.
– Your mortgage payments are likely to be less than your rent.

Fortitudo Developments that intend or currently feature Help-to-Buy

The Highlands, Fareham
Willow Park, Havant
Black and White Cars, Commercial Road
West Quay Road, Poole
Wootton Mount, Bournemouth
30 Tower Road, Branksome Park
– Canaway Court, Poole
– Poole Pottery, Poole

 

 

Richard Carr talks to us about the current property market in London

Some years ago, London property investment was perceived as very stable. For example, back in 1998, the average price of the property was £115,00. 20 years later in 2018, that residential price would be somewhere around 300% higher. But just because something is dependable, it doesn’t make it resistant to change.

In 2017 experts started warning about a UK housing market downturn in London within the coming year, which was demonstrated in the last half of the year and has continued during 2018. This is led to a lowered buyer demand and house prices flattened. Mortgage lender Halifax said that London housing prices are dropping at their quickest rate in nine years. Prices have dropped 3.2 %, which is actually the biggest decline since the financial crisis. But from property investors perspective Richard Carr explains that this is a good time to buy. So the question is, what has caused these changes?

UK leaving the EU
• Inflation rose to around 2.5 %.
• Brexit impacted the housing market the most
• Affordable housing has plummeted
• People are not selling
• Home-owners are buying abroad

Stamp Duty Land Tax
• Has become 2.3 % higher over the past 5 years.
• Is on a constant rise.
• London is a prime area for high stamp duty.
• Has made buy-to-let housing investment less attractive.

So, is it a good time to invest in property?
The key to succeeding in the housing market is staying ahead of the market as much as possible, it’s about knowing when and where to buy and to sell. There are some signs that point towards what could happen in 2019, but to go beyond, it takes a real expect to understand all the factors affecting the housing market right now. No matter your situation, whether it’s buying your first home, or buy-to-let, or even considering buy-to-leave properties, all these routes need experts to advise. See what Fortitudo has to offer today for your current situation, to identify the right opportunities for you. It is my opinion that when we exit the EU there will be a boom in property and the UK, this is because many large corporations have held back on their capital expenditure, we will become the Hong Kong of Europe which will lead to a flood of inward investment.

Richard Carr’s top tips for aspiring first time buyers

Buying your first home can be one of the most daunting decisions to make in ones lifetime. To rent or to buy is one of the key questions for many. The whole process is long and complicated and can seem initially fairly confusing to younger generations with no guidance, but it doesn’t have to be with the help of Fortitudo.

Richard Carr, Chief Executive for property development company Fortitudo, specialises in properties for first time buyers. Richard would like to share his top 5 tips for first time buyers looking to get a foot onto the property ladder.

1. Look into schemes and mortgages with the lowest rates
Over time the government has tried to make home owning more assessable for first time buyers with many different schemes. The Help to Buy scheme is part of most of Richard Carr’s developments, and allows you to purchase properties with a deposit as little as 5%. It aims to make more mortgages accessible for those who cannot afford a large deposit. The Help to Buy ISA pays first time buyers a government bonus, which is interest free for the first 5 years, leaving you enough time to get you on your feet!
Low interest rates with long term fixed rate are hard to come by, that alone is enough to put some people off. Also household circumstances can change, and no one wants to be in a contract that they cannot afford after 5 years. However many banks are starting to realise that this is a problem for many. Recently Virgin Money Mortgages have lowered there interest rates and increased their fixed rate to 10 years, in time many other competing banks will do so too!

2. Know your area
A good location is key, it can make or break your first home, so research needs to be done imperatively. Learn about the job opportunities that could arise, see what schools are in the area, check out the leisure and hospitality facilities. Visit the area at different times of the day; find out how busy your morning commute could be. Test out transport links – how long does it take you to catch a train or a bus? What bus stops are nearby? The number one rule is: never commit to an area unless you could imagine yourself living there.

3. Save your pennies
We all know that buying a home for the first time is a huge financial commitment. Don’t forget that its not just the deposit that you need to save for. Make sure you have thought about all the added extras that come with buying a property; mortgage arrangement fees, solicitor fees, council tax, utility bills and insurance. This might mean tightening the purse away for a little while. Try and cut down of day-day spending and invest into a Monzo card, which can help track your spending and saving. Did you know: the average Brit spends over 2,000 a year in coffee shops!

4. Check your credit report
These days your credit report is more crucial than ever when it comes to being accepted for a mortgage, as lenders will want to see a squeaky clean history of previous borrowing. Clearscore offers a free credit check and tracker and gives you tips and tricks on how to improve your rating, to get the most suited loan to you! 

5. Love move in day
You’ve done your research and saved your money – now is the time to enjoy your new home and make It your own. Packing and moving boxes may feel like a bore, but moving day is a time for celebration! Keeping up spirits with on the day will be sure to get you through. Once the hard work is all over, why not head over to your new neighbours with a glass of bubbly. It’s time to make the most of your very first home.

Property Vs Pension investment – this weeks debate

“Assuming that property prices continue to increase over the coming 20 years in the way they have in the past 20 years, a property of today’s average value of 235,000 will be worth 1 million by 2038.”

Says James Davis the founder of letting agent Upad. Jamie has 20 buy-to-let properties and his confident that they will see him through his retirement. Property investment is a secure way to build your retirement fund. Even with the worst-case scenario of not making any monthly profit from your property (which you will), you will still have a significant amount of capital appreciation.

But what type of person are you?

Property and pension are two completely different entities. Depending on circumstances, lifestyles, strategy and risk, depends on which one a person may choose. As an investor you need to ask yourself how much disposable income do you actually have? When purchasing a property, you need to think about the initial costs and post-cost which refer to the renovations and management fees. Securing these investments are time consuming which can be enough to put someone off this strategy. With pensions you can save for a retirement through achievable monthly payments over a much longer period.

Property Investment

• Property will almost certainly over perform with return on investment
• Beware of stamp duty and taxation on buy to let income
• Government schemes available to get you on the property ladder like Help to Buy
• You can cash in when you want and at any time
• Monthly income, without waiting until retirement age
• Increased risk and time consuming with managing the properties
• House pricing keeps rising
• You can re-mortgage to reinvest
• Property is a tangible asset, which gives people comfort and security

Pension Investment

• Tax-efficient way of saving, government offering tax relief on pensions
• Many different ISA’s to help you gain pension interests
• Pensions are not enough to live on throughout your retirement period
• You will need to wait till the requisite age to get hold of your funds

Richard Carr house purchase

Richard Carr discusses how Help-to-Buy could get you on the property ladder

Over recent years it has become increasingly difficult for first-time buyers to find a house and secure a mortgage that is feasible. First-time buyers are being priced out of the property market in around the UK, where nine out of ten houses are too expensive for locals, according to reports. However with government schemes in place like Help-to-Buy, it has made it possible for younger generations to own their first home. 

Help to Buy: everything you need to know

Are you trying to get onto the property ladder? You could be closer to saving your deposits than you think, move into your new home, with just a 5% deposit using Help to Buy. You no longer need a large sum of money sitting in the bank to buy a property. Keep reading for the latest initiatives and ideas to help you get on the property ladder in the UK.

Help to Buy is a popular Government encourage scheme that gives you an interest free loan, aiming to make more mortgages more accessible for those who cannot afford a large deposit. It is becoming increasingly difficult for the younger generations to get themselves onto the property ladder or even for existing property owners to move up the property ladder. But with government schemes in place like Help to Buy, can give you the right steps to owning your own home The Help to Buy ISA pays first time buyers a government bonus, which is interest free for the first 5 years, leaving you enough time to get you on your feet!

About the Help to Buy scheme
• A deposit as small as 5 % is the minimum required
• Available on most of Fortitudo developments in England up to £600,000
• Help to Buy loan is only available on new build properties
• No household annual income limit
• The government will lend you an interest free loan up with 20 % of the property value for five years. This equity loan can be repaid at any time, or on the sale of your home.
• You will only need to secure up to 75% of the mortgage
• Help to Buy also gives you direction on getting you some of the best mortgage rates at the time

How to apply?

Check your eligibly for your first home with Help to Buy

Which of our property developments are likely to have Help to Buy?

Fareham
Petersfield Road, Havant 
30 Tower Road,  Branksome
West Quay Road
• Labour club, Wimborne Road
• Dolphin Carpark
101 – 107 Commercial Road, Poole