5 essentials first-time buyers need to know in autumn 2020

First-time buyers are caught between a rock and a hard place this year, but a bit of know-how can help them secure a home, even post Covid

Top tips for first-time buyers
(Image credit: Getty)

Maybe this article should really say 'six things first-time buyers need to know', because the first and most important fact of house buying in 2020 is that the landscape for first-time buyers has changed very drastically, with new rules and hurdles to navigate. 

Has it become impossible to buy a first home, as some media outlets seem to be suggesting? Well, not quite. But it certainly is tougher than last year – the financial burden of buying a house has increased vastly since March, with 15 per cent now being the lowest deposit most lenders will accept. Our main advice is: if you have a 10 per cent deposit saved up for your desired property price range, then read on – you might still be okay. If you only have five per cent, we'd say, save yourself a lot of trouble and heartache by saving up a bit more before you look for a home. 

Speaking recently on ITV, Money Saving Expert Martin Lewis said 95 LTV mortgages have 'awful' rates, and has advised first-time buyers to try and save a bigger deposit regardless of current lending conditions. 

So what SHOULD you do if you're desperate to buy now but finding the process difficult?

1. Be as flexible in your property search as you can

This is always a good strategy, but especially now that being a bit more flexible about the area and property type you'll consider may well make a difference between getting a mortgage or not. The more willing you are to compromise on property size and/or postcode, the more likely you are to qualify for a mortgage. 

2. You might want to wait until after stamp duty holiday

This is because most first-time buyers don't pay stamp duty anyway, but now this advantage is no longer theirs alone. This means, of course, that first-time buyers are competing for homes with second-steppers who are able to offer significantly larger deposits. If you are looking to buy in an area that has been affected by the post-Covid property boom, we would seriously advise you to wait until March 2021, which is when the stamp duty holiday ends. 

3. Get an agreement in principle – as soon as possible

Sellers are nervous about sales falling through, and anything you can do to prove that you are serious and will get a mortgage for the property will work to your advantage. Moreover, there are reports that some sellers now won't even allow viewings without agreements in principle in order to weed out people who won't qualify for mortgages. 

A writer for MoneySaving Expert has recently experienced just that, explaining that '[t]he seller of the property I am buying wouldn’t even allow viewings without an agreement in principle – so it’s a good job we got one when we did!'

4. Don't be shy about haggling for a lower house price

There is nothing wrong with being a bit ballsy and putting in a lower offer (always do this in writing). However, you need to be sensible about picking the property you'll be negotiating on. Don't even try to put in a significantly lower offer on an immaculate place in a highly desirable area; you won't get anywhere. 

But – choose a property that hasn't sold in a while, and that perhaps needs a little bit of work, and you may well be in luck when negotiating a lower price. A fast sale is far more important to some sellers – especially where they themselves have found a property they want to move to – so many people are prepared to give a little. 

5. Contact a good mortgage broker

As MoneySaving Expert puts it, 'a good mortgage broker can be worth their weight in gold'. They're there for the express purpose of helping you secure a mortgage, and the best ones will have access to mortgage lenders and deals that will still accept a 10 per cent deposit. 

We have teamed up with the online mortgage expert Habito: they will help you find the best mortgage deal, as well as looking through your application. Use their free comparison tool below to see how much you could borrow. 

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