Whilst it may come as a surprise to some, to those who have already taken the plunge and bought their first home it’s a reality; the fact that, for many, they’ll be financially better off if they buy their own home using the Help To Buy scheme than they would be renting.
Data provided by Moneyfacts.co.uk suggests that, on a 95% mortgage alongside the Help to Buy scheme, the average monthly repayments for a first time buyer are £753 or £9,036 annually. In direct comparison, the average monthly rent currently stands at £768 per month. This, of course, shows that, by purchasing your own home using the Help to Buy Scheme as opposed to privately renting, you could be, based upon this example, an additional £180 per year better off whilst also paying off the mortgage as opposed to lining a landlords pockets with your rent payments.
It is important that those currently making the decision between buying or renting understand that, in the long-run, buying will always be the most logical approach and given that it currently seems to be financially attractive to buy rather than to rent, we’re seeing a surge in applications for those wanting to make the jump and purchase their first home.
Of course, common questions asked by first time buyers are generally surrounding affordability and whether or not they’ll get accepted, however it’s important to understand that help is at hand! Going back to the Help to Buy scheme, this is intended to allow first time buyers to purchase with just a 5% deposit whilst receiving an additional 20% from the government for 5 years to help keep repayments low. In addition, we’re set to see a dedicated Help to Buy ISA launch later this year which will see money saved for a deposit topped up by 20% up to £3,000 – as far as we’re concerned, this really is a completely free £3,000!
On the other hand, when it comes to getting ready to buy, it’s important to take the time to speak to a dedicated mortgage broker who can not only find you the best deal but also ensure you’re taking out the right mortgage and that you’re applying within your affordability range.
Above all else, it is generally accepted at the moment that it’s far better in the long-run to buy and with so much help available, it’s finally becoming easier for first time buyers to get onto the property ladder!