They are one of the largest generations in history. They are about to launch an economic takeover as they move into their prime spending years. Born between 1980 and 2000, millennials are the “digital natives” poised to dramatically repaint the business landscape.
Many companies wishing to market to this generation are already having to re-configure their buying and selling strategies to attract the spending power of this demographic. With the older tier currently in their late 20s and early 30s, these prospective UK home buyers are turning out in their droves to secure their domestic futures.
Is There a Survey for That?
According to the 2015 NatWest Millennial Home Buying Survey, 72% of Millennials are willing to compromise on location to obtain an affordable starter home that will prove to be a good long-term investment.
Outside of London, the majority think a semi-detached house would make the ideal first home. Over half of 26- to 30-year-olds will take out a mortgage to avoid the expensive “Generation Rent” cycle they feel trapped in right now.
Are There Any Savings Tips for First-Time Buyers?
If you are a Millennial searching for your first home, here are a couple of pointers to help with your financial plans:
Stamp Duty Reforms
It’s good news for those on a modest budget. This year’s changes to the Stamp Duty Land Tax (SDLT) in England mean that house purchases costing up to £125,000 are now exempt from charges, with readjustments to other bands significantly decreasing tax costs. For instance, if you wish to buy a home for £225,000, you will pay nothing on the first £125,000 and then 2% of the next £100,000, creating a total SDLT cost of £2000. Previously 1% (£2250) would have been payable on the total purchase price, so there is an automatic saving of £250 thanks to these new reforms. The most to be paid in SDLT is now 12% on homes above £1.5m.
Help to Buy
In case you did not already know, the UK government is currently offering a Help to Buy Scheme for first-time buyers who may be struggling to save up the 20% deposit usually required to get on the property ladder. The two different elements of the scheme mean that it is suitable for those with a penchant for either traditional or modern homes.
An equity loan would be offered to buyers of new-build properties only, with the government providing a 20% repayment loan. A mortgage guarantee can be used for older properties. For this the government would guarantee 15% of your mortgage so that you only need a 5% deposit.
Eligibility criteria stipulate that you must be over 18 years old to apply, you must intend to live in your house in the UK and not rent it out, be prepared not to own any other property in full or in part, the size of your repayment mortgage (not interest only) must be less than 4.5 times your income and the purchase price of the property must not exceed £600,000.
Award-winning estate agent Keywest would be happy to assist you with your first home-buying venture in Leicester. Simply call, email or visit us today.
