The Autumn Budget saw Stamp Duty for first time buyers drop to 0% for the first £300,000 and other changes to the property market. But do these changes actually make it easier to get that first step on the property ladder?
To discuss the issue, Richard Blanco is joined by Kate Faulkner, MD of Property Checklists, Investment Coach Damien Fogg of theepinvestor.com and Financial Adviser Jay Rooney from One and All Financial.
On this month’s episode the panel hear from two case studies looking to buy property, and offer advice on the difficult decisions they have to make.
First time buyers
The panel heard from Laura, a single mother in her mid-30s looking to purchase her first home. She has a significant deposit, thanks to her mum, but still finds herself limited in terms of how much she can borrow. With her son settled in school, she doesn’t want to move out of her current area. What are her borrowing options? And are the challenges she’s experiencing the same across the country?
Investment purchases: to let or to flip?
Jack is already a home owner, but he wants to become a property investor. He looked into becoming a landlord – something his step-father and step-brother did when he was young – so he always thought it would be a good investment. His three-bed flat has appreciated in value, meaning he is now able to downsize and use the capital to invest. His first attempt at purchasing a rental home was difficult, so he’s now considering other investment options such as buying to sell.
Laura also looked at buying to let somewhere outside London, but found she didn’t have the knowledge or time to learn about becoming a landlord. Is buy-to-let still a viable option?
Jack and Laura are in two different positions, but both need finance. As Jack is a homeowner, he has more options available, but few mortgage products that offer finance for buying to sell and he doesn’t have development experience. That lack of experience makes it difficult for anyone trying to enter the industry. Laura can access Help to Buy, which opens up her options for purchasing her own property. But what types of mortgages are available to them?
Changes to the market
In the first six months of 2017, 21 per cent of first time buyers said they were competing against landlord buyers. That was 39 per cent in 2015. There have also been changes in the Budget, such as the reduction of Stamp Duty for first time buyers. Does this signal a shift in the market and will it encourage first time buyers to go out and find a property they can actually afford?