Sarah Beeny Autumn 2017 - 47
BUYING AND SELLING ▲
London, or £90K a year or less in London.
ou are a first time buyer.
ou used to own a home, but can't a ord to
buy one now or are an existing shared owner
looking to move.
You are 18 or over.
There are a few catches to be aware of,
however. You won't, for example, be able to
sublet this home or enter a part-exchange deal
on your old home. You also need to purchase
your home through a registered agent.
If you're aged 55 or over, you can get help
from the Older People's Shared Ownership
scheme, which works in a similar way but only
allows you to buy up to 75% of your home.
Once you own 75%, you won't have to pay
rent on the remaining share.
o find a registered agent in the area
you're looking to buy, visit helptobuy.gov.uk/
shared-ownership for England. For Scotland,
see shared ownership (on previous page);
for Northern Ireland, visit nidirect.gov.uk/
articles/co-ownership-housing; for Wales,
check with your local housing association.
If you are saving to buy your first home,
putting money into a Help to Buy: ISA is a
great way of boosting your funds. Basically,
the government will raise your savings by
25%. For example, for every £200 you save,
you will receive a government bonus of £50.
The maximum government bonus you can
receive is £3K, so if you save £12K in a Help
to Buy: ISA the government will boost your
ISA savings to £15K. To check whether you're
eligible, visit helptobuy.gov.uk
relatively new entrant to the field,
crowdfunding for property is also known
as Peer to Peer, Person to Person or P2P
lending. It allows you to access finance for
development projects and property purchases
from private investors.
Loans are typically short-term and loan
amounts tend to be no more than 70% of the
open market value of the property, so you'll
need to have access to a sizeable deposit if
you decide to go down this route.
If you have a great credit rating, interest
rates could be competitive. However, they
can also be much higher than 'high street'
WITH A HELP TO BUY: ISA,
FOR EVERY £200 YOU SAVE,
YOU WILL RECEIVE
A GOVERNMENT BONUS
OF £50, UP TO £3K
mortgages, so it's important to check the
small print before you sign on the dotted line.
Lending is secured with a legal charge,
which means the lender's interest in your
property is recorded at the Land Registry,
just as with a standard mortgage.
While P2P funding is relatively widely
available for buy-to-let mortgages, it's still
rare for domestic ones. However, it's an area
that looks set to grow over the coming years,
so watch this space.
BANK OF MUM AND DAD
Parents are predicted to lend more than
£6.5 billion this year to help their children
get on the property ladder - a whopping 30%
increase on the £5 billion loaned in 2016 -
according to research from Legal & General
and economics consultancy Cebr.
This means that parents will be involved in
more than 25% of UK property transactions,
and the 'bank of mum and dad' (BOMAD)
will help fund property purchases worth
about £75 billion this year.
part from helping first timers raise a
deposit, this kind of lending or gi ing can help
purchasers secure mortgage deals that are only
on o er to those with larger deposits.
A deposit of 35-40% means a borrower can
access the best deals, secure lower monthly
repayments and reduce the risk of falling into
negative equity, because they have purchased
their property with a higher deposit.
ighter regulations on mortgage a ordability
mean more prospective buyers are unable to meet
the lending criteria without a helping hand
from BOMAD. Current rules mean borrowers
need to demonstrate they can make their
monthly repayments, even if mortgage interest
rates rise to 5% or more.
But experts are warning that there could be
a sting in the tail for recipients of BOMAD
generosity owing to the UK's complex
Inheritance a IH rules on gi s. lthough
there are plenty of exceptions and rules are
subject to change, BOMAD contributions
towards a house purchase could be liable to
40% IHT further down the line.
With so many
options on offer,
t an e fﬁ t
to ﬁn the est
mort a e
ro er an he
t stra ht
to the options
yo are e
for ra n yo r
attention to the
most ﬁnan a y
a e ea s n
the on an
tho h they
may har e a fee
yo eno h t me
and money to
any n t a o t ay
www.athomemagazine.co.uk OCTOBER 2017 | 047