Getting that first foot on the property ladder is arguably one of life’s major milestones.
But recent studies show that the impact of the pandemic, both on the property market and the personal finances of those looking to buy, has exacerbated the existing gulf between struggling first-time buyers and those already on the property ladder.
Don’t fret though, as Alan Cumming, the national estate agency director at Aberdein Considine, says the picture for first-time buyers in Aberdeen is brighter.
Here, Mr Cumming explains what the outlook is for first-time buyers in the north-east and the support that is available.
Opinion by Alan Cumming
That first step on to the property ladder has always been the toughest one – and there has been a lot of chat recently about that step getting steeper.
Miles of column inches have been dedicated to the UK’s “booming” property market over the last six months, and it is correct to say that demand for property has risen sharply.
The pandemic has made millions of people reconsider what they want from their home, both today and in the future.
There has also been a rush to take advantage of tax “sweeteners”, such as the Stamp Duty cut in England and a smaller, but still significant, reduction in its Scottish counterpart, the Land and Buildings Transaction Tax (LBTT).
Together, these factors have combined to create a more competitive market – but don’t worry, help is at hand for first-time buyers.
What’s happened to the market?
Believe it or not, the property market nationally is still catching up from what happened at the start of the pandemic, way back in April 2020.
When the first lockdown was imposed, the property market effectively shutdown. And with estate agents closed, there was an extended period where no new properties were coming on the market.
However, buyer demand didn’t diminish and as a consequence, there has not been enough stock to meet the demand.
More buyers going after fewer properties usually results in price inflation – great news for sellers, but it does make things more competitive for buyers.
This is particularly true for first-time buyers as anything over home report value must be funded privately by the buyer.
Things have been easier in the north-east, however, due to the high levels of stock sitting on the market going into the pandemic.
Improving mortgage picture
There is another factor going in favour of first-time buyers – the mortgage market. Since the turn of the year, the availability of 95% mortgages has increased dramatically.
We have lenders offering five-year fixed rate deals and there are many options out there for those with low deposits.
However, building as big a deposit as possible is still key and will make it easier to find the best possible deal. There are no issues at present with part of that deposit being gifted, either from a parent or grandparent.
Could the First Home Fund return?
And there could be more good news on the horizon.
Shona Robison, the cabinet secretary for social justice, housing and local government, has been urged to re-open a scheme to support first-time home buyers after its “phenomenal popularity” led to it running out of money within a few days of being launched.
Industry body Homes for Scotland said the Scottish Government’s First Home Fund was needed to help meet the huge demand from those struggling to get on the property ladder.
In April, the Press and Journal exclusively revealed that the £60million scheme had run out of cash within just a few days of re-opening. The initiative, which lends people up to £25,000 towards their deposit, was launched on April 1 but was fully committed by April 8.
Could it make a comeback?
Perhaps. But first-time buyers need not wait.
At Aberdein Considine, we can access over 15,000 mortgages, including hundreds of deals for those with deposits of 5%.
We’d be delighted to meet with anyone looking to get on the property ladder.