Posted in: Buying Guide, 15th January, 2020

Why rent when you can buy?

With rising property costs and current rental prices, you could be forgiven in thinking that it is unlikely that you will ever own your own home. However, there is plenty of help available if you are a first-time buyer who is keen to get onto the property ladder.

And with monthly rent sometimes costing more than mortgage repayments, why pay rent into someone else’s pocket when you could be investing in your own home?

Benefits of buying vs renting

  • Your monthly payments go towards your own home rather than in someone else’s pocket.
  • Once you have paid off your mortgage, you fully own your home and will no longer have to pay monthly.
  • If house prices rise, you could make a profit when you come to sell the property.
  • You can make changes such as redecorating to your home without asking a landlord for permission.
  • Buying can be cheaper than renting.
  • You can’t be asked to leave the property because the landlord wants to sell, giving you more long-term security.
  • Less important, but probably more fun, you’ll be able to decorate as you wish and get that pet you’ve been desperate for.

If those benefits are getting you ready to buy, then you might be wondering how this could be a possibility, read on and we’ll share our insider knowledge on the help available.

Help to Buy – Equity Loan

One of the reasons many first-time buyers struggle to get onto the property ladder is due to the high prices of houses, which means high deposits are required. With rental prices and living costs also creeping up, it can be hard to save up for a 25% deposit, which is often needed in order to benefit from low interest rates on mortgages.

It’s with this in mind that the Government fund the Help to Buy equity loan, which has just been extended to 2023 for first time buyers. This is where you can get a low-interest loan toward the deposit of your home, provided that it is a new build home, has a purchase price of up to £600,000, not to be rented out after you purchase it, and be one that you can show you cannot afford without the loan.

All you will need is the 5% deposit, and a mortgage in principal of up to 75% to cover the rest of the cost. You must also buy your home from a registered Help to Buy builder. If you are a current home owner, you will still be able to use the existing Help to Buy scheme until the end of 2020.

Help to Buy – Shared Ownership

If the equity loan is not for you, you could also take advantage of the shared ownership part of the Help to Buy scheme. This is where you have the opportunity to buy a share of a home, between 25% and 75% of the home’s value, with the option of buying a bigger share later on. You would then pay rent on the remaining shares of the property.

If you’re looking to take advantage of one of these schemes and purchase a new build property, then we could have just the beautiful new build home for your first step onto the property ladder. Get in touch to find out more.