What first time buyers in Wales need to know

If you’re a first-time buyer in Wales, you might be wondering whether now is a good time to get a foot on the housing ladder. While it’s worth considering house prices and interest rates, the key thing is to base your decision on your personal circumstances.

If you’ve done your sums and know what is affordable at in today’s market, there’s no reason not to take the plunge. It’s a big step but if you are buying in the desirable North Wales areas of Anglesey and Gwynedd, your property is likely to rise in value over time and be a sound investment.

If you think now is the right time to make your homeownership dreams come true, then this article explores the things you need to consider.

Buying a house in Wales – how is the market right now?

In general, house prices in Wales fell over the past year, according to recent figures from the Principality Building Society. However, Gwynedd in North Wales was one of the few areas to see a rise in prices.

According to property website Rightmove, the average cost of a house on the Isle of Anglesey was just over £253,000 over the past year, 5% up on the previous year. For first time buyers, however, there are plenty of properties available at around £150,000.

Similarly in Caernarfon, Gwynedd the overall average price of a property was just above £206,000 with terraced homes going for around £182,000.

While the areas we cover have many desirable period properties, North Wales has plenty of affordable new developments which may be a good bet for anyone looking to enter the market.

Help for first time buyers in Wales

If you’re looking to build up cash for a deposit or find other ways to make your first home more affordable, the Welsh Government has three schemes that might help:

• Shared Ownership – Wales – through this scheme you can buy an initial share of 25% to 75% of a property and pay rent on the remaining share.
• Help to Buy – Wales: This shared equity loan scheme is available for homes costing up to £300,000 for buyers who have a 5% deposit.
• Homebuy – Wales: This scheme offers equity loans of between 30% and 50% for buyers who meet specific criteria.
• The Welsh government has an online tool to help find which home ownership is suitable for you.

Steps to owning your first home

If you’re thinking of buying for the first time in Wales, it’s worth understanding the process, costs and other things you need to be aware of:

1 Do your research

Give some thought to your property project. Think about where you want to live, what type of property will suit your needs and the pros and cons of different locations. Think too about how long you want to live in the property – is it to get a foot on the housing ladder or your forever home? Find out as much as you can about help to buy schemes and the applications process.

2 Understand the costs involved

Possibly your most important task is setting a budget that will define your property search. As well as the price of the property, you will need to factor in the costs of buying – so conveyancing and survey fees plus Land Transaction Tax in Wales (known as stamp duty in England).

You will need to get an understanding of mortgage rates and how much you’ll be paying each month – and how the level of deposit you have impacts on the loan. You’ll also need to think about the ongoing costs of property ownership including building and contents insurance, council tax, utility bills and repairs and maintenance.

3 Save for a deposit

You’ll need to save for a deposit (you may wish to consider using the Principality Building Society agencies within Williams & Goodwin at Holyhead and Llangefni for this) before you apply for a mortgage. The more money you have to put down as a deposit, the lower your repayments. It will also be easier to find a good deal with a lower interest rate. Generally, you‘ll need to save at least 5% to 10% of the cost of the home you’d like to buy.

4 Find the right mortgage

You’ll need to look around for the best mortgage rates for you. You can apply direct to banks or building societies or use comparison sites to find deals. You could also use the services of a broker or mortgage advisor who might charge a fee but could find you a deal that would be hard to source otherwise – especially if you have a small deposit or are self-employed.

5 Make your application

To apply for a mortgage, you will need to pull together proof of income such as payslips – or tax returns if you’re self-employed – as well as details of your outgoings. The mortgage company will carry out a credit check and examine your application to be sure you will be able to afford the repayments. They will also stress test whether you’d still be able to afford it if interest rates rise. When your application is approved you will receive a mortgage offer.

If you’re a first-time buyer in North Wales – whether in Biwmares, Porthaethwy, Caernarfon, Bangor Llangefni or beyond – talk to us. We have a great range of affordable properties of all types in the area and would be happy to advise you further about taking this exciting step.