Should I consider buying a bigger home

Dreaming of a bigger home in the bustling suburbs of London but are you concerned about the house prices? We understand that the costs associated with moving can add up quickly. From preparing your property for sale to purchasing your new home, including mortgage fees, legal expenses, surveyors, and hiring a professional removal company. The financial commitments can be daunting. And let's not forget about the additional expenses, such as stamp duty.

Save on stamp duty fees

The great news is that recent changes to stamp duty in England, Northern Ireland, and Wales have significantly reduced the financial burden. In England and Northern Ireland, you can now buy a property up to £250,000 without paying any stamp duty, except in the case of second homes. Meanwhile, in Wales, properties up to and including £225,000 are exempt from stamp duty. For those purchasing above these thresholds, you can save up to £2,500 on your stamp duty bill in England and Northern Ireland. 

First-time buyers enjoy additional benefits. In England, you can purchase a property up to £425,000 without paying any stamp duty, while in Scotland, properties up to £175,000 are exempt from the Land and Buildings Transaction Tax.

Need to move, but can't afford it? 

Consider these alternative options:

1. Let your property and rent a bigger home

Thinking long-term? If you're concerned about your immediate finances, explore 'let-to-let.' Rent out your current property and lease another. It's a practical way to navigate financial uncertainty and determine your future plans. Whether you return to your original home or decide to sell and move on, 'let-to-let' provides flexibility.

2. Extend your mortgage 

Own a property outright but need assistance purchasing your next one? Consider securing a mortgage during your transition. Age restrictions on mortgages are becoming less common, with most lenders extending eligibility up to age 65 or 70 and even beyond. 

3. Auction properties

Struggling to find a property within your budget?  While it's essential to inspect a property in person and gather legal information, online bidding simplifies the processAuction properties can sometimes be a more affordable option. Be well-prepared, as winning an auction commits you to the property, and delays can result in the loss of your deposit. With the right approach, you can secure a fantastic property at a bargain price. 

4. Buy a property with a family member

Join forces with a friend or family member to afford your new home. This strategy is particularly useful in high-cost areas like London. Combining your savings for a purchase or rental deposit can ease the financial burden and help manage living costs. Ensure you have a clear agreement in place to address potential disputes or changes in circumstances.

5. Shared Ownership

Government schemes, including shared ownership, provide opportunities for homeownership beyond first-time buyers. This scheme allows you to purchase a percentage of a property, such as 25% or 50%, and gradually increase your ownership over time. While you'll pay rent on the remaining share, it's a viable option, especially when proximity to work or family is essential.

6. Deposit unlock scheme

Explore the 'deposit unlock scheme,' a collaborative initiative between new build developers and lenders. With a 5% deposit, you can secure a property through a 95% loan-to-value mortgage. For example, if a property is valued at £250,000, your deposit requirement would be just £12,500. While this isn't a discounted deal, lenders offer this option to protect against property value fluctuations.

7. First homes schemes

Consider 'First Homes,' where local authorities collaborate with developers to offer properties at a 30% or greater discount from market value. Lower deposits and reduced financial barriers make homeownership more accessible. Unlike similar schemes like Help to Buy, 'First Homes' guarantees ongoing affordability for local communities.

Choose an Estate Agent near you

If you're unsure about your next steps or need expert property guidance, our team provides daily assistance to help you find the perfect home within your budget. We're passionate about helping you secure a new life in your dream home. Connect with us at our offices, via email, or by phone, we're here to make your dream a reality.

Posted on: 4 October 2023