Bruce Burkitt, Founder & Managing Director at Property Experts ..
In the spring budget, Chancellor Rishi Sunak announced several reforms to the property market that have excited first-time buyers. Announcing a new scheme that offers buyers a 5% deposit for a 95% loan-to-value mortgage, available from the beginning of April, the scheme presents purchasers with a new opportunity to get on the property ladder earlier than they might have been able to otherwise.
With the pandemic resulting in many of us reconsidering our preferences, from where we want to work to where we want to live, the market is buoyant, driven by these new consumer demands. With working from home likely to continue long into the future, at least for two or three days a week, the necessity for people to live in central London, close to the office, has diminished significantly. In its place, the desire to be closer to nature, with more space and a better standard of living, whilst still living within the commuter belt.
This changing landscape is now driving huge value growth in the areas of Greater London that meets this new criteria, and two areas to look out for include Croydon and Horley. In both boroughs, purchasers can expect to need a deposit under £20,000, which for many first-time buyers is achievable and goes hand in hand with the Chancellors new 5% deposit mortgage scheme. Not only this, but the space available at properties in these boroughs is much greater than what can be found in more expensive, central locations in London, whilst also offering excellent transport links both into and out of London.
As our changing preferences and market reforms are driving significant increases in demand for these types of property, the value of them will rise, perhaps considerably over the next 3 to 8 years. In fact, demand has increased so drastically in these areas, that the average price of property grew 0.8% from February 7th to March 6th. Therefore, anyone who purchased a property before February will already be enjoying a return on their investment, albeit early days in that example’s journey
Hopefully this demonstrates the benefits of the 95% mortgage guarantee, especially from an investment perspective. Which, for any first time buyer, your first property purchase will likely be the most important investment you ever make. And in today’s market conditions, now is a perfect time to exercise the smaller deposit and make a purchase with your second already in mind. Then sit back, enjoy the new digs and all being well your investment could increase by as much as 10% over the period you’re living there.
For further information on property development and investment, contact Property Experts on 020 8720 6901 or visit www.propertyexperts.co.uk