5% deposits and rising rental costs bring out first time buyers

A rosy picture is finally being painted for first time buyers in the north west, and housebuilder Taylor Wimpey thinks it’s about time.

Taylor Wimpey Manchester, which has developments across the north west, believes that the selection of deals available to first time buyers which only require a 5% deposit, is key to making home ownership affordable to more people.

And with the average borrower’s repayments today taking up just 28% of their take-home pay – the lowest level in 12 years – according to Halifax, monthly mortgage repayments are also refreshingly reasonable.

In contrast, rental prices have begun to rise over the last year with Halifax research finding that renting can cost over £100 more per month than mortgage repayments*.

The low Bank of England base rate of 0.5% coupled with the higher stamp duty threshold have also helped to keep interest rates low and extra costs to a minimum for first time buyers.

Anthony Mansfield, sales and marketing director for Taylor Wimpey Manchester explained: “This is a really exciting time for first time buyers as all manner of help is now available to them. Many first time buyers are under the impression that they will always need a huge deposit and so they count themselves out of the running. However, with deals such as FirstBuy and shared equity available, only a 5% deposit is needed – in contrast to the up to 20% deposits expected when these schemes are not available.

“As rental prices rise as well, many renters will start to question the amount they are ‘throwing away’ and they will start to look around for something which offers them a better deal with more security.

“First time buyers need help so they understand what is available for them. Unfortunately many believe that they cannot afford to buy a home, due to what they read and hear, and so do not pursue it – we are working to change that.”

FirstBuy works through a joint loan of 20% from the Homes and Communities Agency (HCA) and Taylor Wimpey, which means that eligible purchasers only need to put down a 5% deposit and obtain a 75% loan-to-value mortgage. The loan is repayable at the end of the 25 year mortgage term or when the property is sold. To be eligible, purchasers must be first time buyers and the total household earnings should be less than £60,000.

With Taylor Wimpey’s Easystart shared equity scheme, the buyer owns 100% of their home from day one, but only need to secure a mortgage for 75% of the price. Taylor Wimpey will contribute a 5% deposit and a small 5% deposit is also paid by the buyer. The remaining amount is repaid in monthly sums or as a one lump sum interest free within 10 years of completion.

For more information about the selection of properties, developments and financial incentives available, visit taylorwimpey.co.uk.

(*Based on the price of a two bedroom apartment)