Daniel Linton, Branch Manager Winkworth Borehamwood gives his tips to those looking to buy their first property.

Is now a good time to jump on the property ladder?

Although property prices may soften in the short to medium term, my advice is to jump on the ladder now, because if you wait and try to hit a lower point in the market competition will be fierce. You may also be able to negotiate down with a vendor due to strong buying position, however, this depends on how sensibly a property was priced initially.

How much can you afford?

Speak to a qualified Independent Financial Advisor (IFA) who should be able to obtain an Agreement in Principle, however, also ask the advisor what could happen if interest rates went up by 1%, 3% or even 5% – would you be able to afford your monthly mortgage payments?  Don’t overstretch yourselves.  Remember that interest rates will have to rise at some point in the future!

What to get in place?

Firstly have an Agreement in Principle from a Lender via your IFA, find out what they would need in terms of supporting evidence for your mortgage application to proceed as quickly as possible after you have found the property you would like to buy. You may find that vendors may be more flexible with price if you have the ability to move quickly.

What deposit do I need?

The days of 100% mortgages for the time being are over, so based on what we are experiencing at our branch, many first time buyers have been rushing to the next favourite option of the ‘Bank of mum and dad’. The main reason for parents helping out their offspring, is that return on investments and interest earned from money in the bank is barely negligible, unless you are prepared to take a gamble.  Bricks and mortar has always been seen as a safe, long term investment, and if the money is not doing much, then at least helping their children out is a fantastic way to get them out from under their feet at the family home!

However, there are only so many parents who can afford to help their offspring in that way. The average age of a buyer has seen a marked increase over the last 10-15 years, and the average first time buyer is now in their mid-30’s, this also coincides with a lot of children staying at the family home until their late 20’s.  This enables First Time Buyers to save as much as possible.

A buyer would need to have a minimum of 10% of the purchase price as deposit to have a fighting chance of obtaining a mortgage; however rates are still not that attractive at that level. There is a huge difference if a buyer has a 15% or more deposit.  Don’t forget to keep money aside for solicitors, surveys and possible IFA/Lenders fees.

Remember, if your first purchase is under £250,000, you will not have to pay any stamp duty at all, as this has been suspended for two years from April 2010.

For property to buy in Borehamwood, contact Winkworth Borehamwood’s Sales office on 0208 953 8899.