5 First Time Home Buyer Benefits

Mar 10, 2023 | Mortgages

Purchasing your first property is a big milestone, and it can sometimes feel like the odds are stacked against you – but there are actually a number of first time home buyer benefits to help you get there.

You’re classed as a first-time buyer if you, and anyone else you’re buying with, are purchasing your first residential property. This means you won’t qualify if you’ve bought a house or flat in the past, or if you’ve received property through inheritance or as a gift.

Whatever your circumstances, it’s important that you get all the information you can about buying your first home, and understand the benefits in full before going ahead.

1. Lock in your interest rate

Interest rates are rising, with the Bank of England’s base rate hitting 4% this February. While experts predict rates are nearing their peak, you could still save by taking advantage of a first time buyer deal sooner rather than later.

By working with a mortgage advisor like Roebuck, you’ll be able to lock in your interest rates three months ahead of your purchase, so you’ll retain that rate even if the rates go up before you buy.

2. You don’t need to sell a property

Selling a home comes with its own legal and financial headaches, with the potential for long delays. But if you’re buying your first home, you don’t already have a property you need to sell before you can go ahead with the purchase.

This can make the process much faster and, as you’ll be at the bottom of the ‘chain’, you might be attractive to sellers who are on a deadline themselves.

3. Less tax to pay

A major financial benefit is the opportunity for tax relief. Stamp duty land tax (SDLT) relief is available to first-time buyers, with no SDLT to pay on property values up to £425,000, and only 5% on the portion from £425,001 to £625,000.

By comparison, the nil-rate threshold for SDLT if it’s not your first home is £250,000.

Bear in mind that SDLT is the property tax that applies in England and Northern Ireland – in Scotland and Wales, different thresholds apply.

4. Boost your savings

One plus side to buying for the first time is that various schemes exist to help people onto the property ladder.

In particular, you can add to your savings by opening a Lifetime ISA – these allow you to save up to £4,000 a year tax-free, and benefit from a 25% Government boost. That means an extra £1,000 on your savings if you save the full amount in a year.

Anyone between the ages of 18 and 39 can open a Lifetime ISA, and save in it until the age of 50. The savings then need to be used either to buy a first home or accessed when you’re aged 60 or over. Otherwise, a withdrawal charge might apply.

5. Access mortgage deals

Another Government-backed initiative that could support your purchase is the mortgage guarantee scheme.

First introduced during the pandemic, and now extended until the end of December 2023, this scheme offers lenders a financial guarantee on mortgages with a 5% deposit.

This technically helps the lender, rather than you as the buyer, but it does mean it’s possible to access slightly higher loan-to-value mortgage products that were a rarity before the scheme was introduced.

Are you ready to get a great deal on your dream home? We can help, with personalised mortgage advice, as well as guidance on protection products such as mortgage protection insurance.

Contact us to find out more about the first time home buyer benefits available to you.