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What first-time buyers should be aware of as mortgage applications surge

While the housing market has seen prices falling, there was a spike in first-time buyer activity in January.

According to first direct bank, there was an 18 per cent rise in mortgage applications compared to the previous month of December, making it the most significant rise since September last year.

Small dip

Analysis showed that the volume of first-time buyer applications rose from 17,704 in December to 20,845 in January.

The value of applications for January was around £4 billion, up from £3.5 billion the month before, an increase of 17 per cent – showing a small dip in the average value of the loan month-on-month.

However, the first-time buyer market was down year-on-year compared to January 2022 – where application volumes were at 31,308, totalling a value of £6.4 billion.

Savings schemes

With mortgage rates rising, there are many things for first-time buyers to consider when purchasing their property like how much deposit do I need? What are the best mortgage rates and am I eligible?

There are a number of Government-backed savings schemes helping first-time buyers, including the Lifetime ISA and the Help to Buy ISA to help first-time buyers save for a deposit. You can benefit from a 25 per cent bonus on whatever you save.

When you have made that offer, it’s important to budget for additional fees and costs:

Conveyancing fees – Your solicitor will charge for conveyancing (dealing with the transfer of ownership), checking the legal title to the property and acting for your mortgage lender.
Mortgage valuation and arrangement fees where applicable
Stamp Duty – You will need to pay any stamp duty that is due to your solicitor, who will then pay it to HM Revenue & Customs once your property purchase has been completed
Survey of the property – This should reveal any structural problems with the property and issues like damp and items of repair.
Removal costs
Fixtures and fittings costs
Home insurance – Make sure you are properly covered both for the building itself and its contents.

Need legal advice when purchasing your home? Contact our team today.

Elizabeth Jennings

Director - Commercial Property & Charities

I joined Mander Hadley in 2004, qualified as a solicitor in 2006 and have focussed on commercial law throughout. I am also a member of Coventry and Warwickshire First and Warwickshire Law Society.

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