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Good news for first time buyers

2021 saw a record year for first time buyers as more than 400,000 got onto the property ladder, the highest number in 20 years and 35% more than in 2020.

First time buyers are great for the property market as they keep the whole market moving, allowing sellers to trade up to bigger homes. There were several factors in 2021 that contributed to first time buyers being able to get onto the market including high levels of employment, low interest rates, and the re-introduction of 95% mortgages.

95% mortgages
The biggest issue first time buyers face is saving up a hefty deposit. In a bid to get the market moving the government introduced a mortgage guarantee scheme which encouraged lenders to start offering 95% mortgages again. This enables first time buyers to only save 5% of the value of their first home. Now first time buyers have a choice of over 350 95% mortgages, allowing them to shop around to find the best deal for their circumstances.

Help to buy equity loan scheme
This government initiative allows first time buyers to buy a new build property with just a 5% deposit, with the government providing a 20% equity loan interest free for 5 years.

First homes scheme
First time buyers, as well as key workers and local residents, can purchase specific properties at a 30% discount of their market value.

Lifetime ISA initiative
This scheme helps those saving for a deposit – first time buyers can save £4,000 a year, which the government adds 25% to, up to a maximum of £1,000 per year. This money must be used to purchase a first home.

Stamp duty
First time buyers are exempt from stamp duty on the first £300,000 of a property that costs under £500,000.

If you’d like to find out more about mortgages and benefits for first time buyers, please get in touch with smarthomes’ independent mortgage advisor Louise Lewis. She’ll offer free advice and can be contacted on 0121 744 4144 (opt 2) or

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