The real estate market is constantly shifting, and in the post-pandemic era, buying your first property can be more intimidating than ever. But it doesn’t have to be! With these 11 essential tips, you can make an educated decision on investing in a home that will fit your budget and meet your needs now and years into the future. From understanding mortgages to finding the right location for you – no matter what stage of life or financial situation, this guide has everything you need to know about successfully purchasing your first property. Let’s get started!
The UK housing market in 2023
2023 is shaping up to be an interesting year for the UK housing market. With the cost of living crisis in full swing, affordability is a priority while house prices remain relatively high. Regionally, there are significant differences in price caps and annual house price growth. This means that it’s important to research different regions carefully before making any big decisions.
This year also represents an excellent opportunity for property developers and investors who recognize the potential of the UK real estate industry – whether through sustainable construction practices or unlocking previously unexplored locations.
1. Take advantage of the Help to Buy scheme
If you are looking to buy your first property in the near future, then the help-to-buy scheme can be a great help. The scheme offers an equity loan initiative, which is free for those looking for their first purchase. It is necessary to meet specific criteria to qualify, but if you do, you can add up to twenty per cent of the value of your property onto a mortgage.
Plus, there’s no monthly payment on this additional funding until you either pay it off or sell it back to the government when moving house. The interest rate is also considerably lower than standard mortgages, so taking advantage of the scheme could prove one of the few opportunities for first-time buyers to get onto the housing market with peace of mind and a plan for continued affordable payments over time.
2. Pay down your existing debts
As a new homeowner, you must be well-prepared financially when entering the real estate market. One of the first steps is to pay down existing debts before diving into a significant investment like property. It’s essential to create a budget and save some money in advance to have cash on hand for purchase or repair expenses that may come up unexpectedly. You’ll want to prioritse paying off things like high-interest loans or credit card debt to keep your payments low and make it easier for you to qualify for better loan terms and rates.
Lastly, don’t forget about your emergency fund! No matter how carefully you plan out your future purchases, financial curveballs can occur, so make sure you have enough savings to handle any surprises with owning a home.
3. Improve your credit score
The prospect of buying your first property can be intimidating. With housing prices rising, knowing what steps to take to improve your credit score is essential to get the best possible deal in 2023 and beyond. Paying bills or debts on time, requesting a change in your credit limit, removing any hard inquiries on record, and eliminating high-interest balances are all effective ways to improve your credit score and give yourself an edge when it comes time to start shopping for a property.
In addition, monitoring how lenders report negative items on your credit report is equally crucial in ensuring you have the highest possible score when you’re ready to hit the market. Investing in yourself now by taking small but meaningful steps can get you one step closer towards realising your dreams.
4. Start a savings plan
It is important to start saving now to buy your first property in 2023 or beyond. Setting aside money each month and investing it in the right places can make all the difference for a potential homebuyer. It’ll be helpful to research different house-buying options, such as interest rates, mortgage repayment plans and other schemes available from banks and loan providers.
Regular investment planning sessions with a financial advisor will provide valuable advice on potential savings strategies, such as diversifying investments within managed funds, building up an emergency fund for unexpected costs, or contributing to an online share portfolio. Investing your savings can also provide you with opportunities to build up capital for the property purchase and for further investments going forward into the future.
5. Shop around for a mortgage that suits you
If you’re looking to buy your first property in 2023 or beyond, it’s important to remember that finding the right mortgage is an integral part of the process. Shop around to get a feel for which lender offers the best rate, and remember to read the fine print before signing on the dotted line. Talking through your requirements with several lenders can highlight potential deals that don’t appear on tables of comparison rates, as well as help you find a financially-suitable product with terms that are clear and easy to understand.
Don’t forget to consider other fees associated with buying a home – you may be able to negotiate some down, particularly if the sale will bring in more business for a lender. You can secure a fantastic deal on your first property purchase with careful planning and research.
6. Get mortgage preapproval
One of the most important steps is getting preapproval for your mortgage. Preapproving for a mortgage will help you know how much house you can afford, save time on negotiations with sellers, and increase your chances of securing the perfect home when you find it.
With over 20 years of experience as a real estate agent, I have seen firsthand how having a preapproval letter from a lender helps buyers succeed in their hunt for their dream property, giving the buyer leverage when bidding in a competitive market.
7. Be prepared to bid against others for a property
With the 2023 real estate market already marking an increase in competition for desirable properties, anyone interested in buying their first property should be prepared to bid. One of the best tips is to start researching areas of interest and narrowing down the list of available properties. In such a competitive market, it’s important to be aware of local trends and future developments that might impact house prices and rental value.
Knowing your area well means having an informative overview of property value, allowing you to make an informed decision as to how much you are willing to pay and also helping you estimate potential yields. Preapproval with a lender upfront will also increase your chances, giving you more control over the negotiation process and a better chance of securing the property you want.
8. Understand that falling house prices may just be temporary
Buying a property can be stressful and lengthy, but understanding that falling house prices in the market may eventually become temporary is an important step in getting your dream home. Even with the economic fallout of 2022, planning ahead and preparing for the future by researching potential financing options and establishing a budget will ensure you go into buying your first home in 2023 feeling confident.
Planning goes beyond simply setting aside funds – familiarise yourself with the area you plan to purchase a house in to ensure you’re getting value for money and compare deposit amounts on multiple properties to get the best deal possible. With what may have been a trying settlement time for some potential buyers recently, these steps can make all the difference in securing your first property at a manageable price.
9. Have an independent building inspector look at the property before committing
If you’re looking to buy your first property in 2023, one vital thing to remember is to have an independent building inspector look at the property before committing. An experienced inspector can provide a detailed report on the property’s condition, from checking for structural defects and any underlying issues with plumbing to testing for moisture and checking for mould.
Knowing the property’s condition can help you decide whether it is worth investing in or if any further restoration work needs to be done. Engaging an inspector would give you confidence and peace of mind about making an intelligent decision when it comes time to buy your new home.
10. Be wary of hastily-built new builds
In 2023 and beyond, if you’re considering buying your first property, it’s very important to be wary of hastily-built new builds. While they may seem like a great deal at the time, they often come with deferred maintenance issues that eventually cost far more in repairs than the initial purchase did.
If you’re considering a new build, make sure to get an inspection done by a fully-qualified home inspector to identify any potential issues before making a final purchase decision. It’s also wise to carefully review the builder’s warranty to ensure that it covers whatever items are absent from the inspection report. You can choose a property that will provide years of worry-free ownership and financial security by taking extra steps up front.
11. Take advantage of online and remote viewings
Buying your first property can be an incredibly exciting and daunting experience, but in 2023 and beyond, technology will make the process easier. With the explosion of online and remote viewings now available, prospective first-time buyers will have unprecedented access to properties in their budget range. Before viewing a property in person, you must take advantage of all of the digital tools at your disposal to narrow down which properties are worth visiting in person–this will save you both time and effort down the line.
Online descriptions, videos, 3D renders, and high-quality photos should provide a solid idea of whether or not a certain property merits further inspection. Remote viewings via video conference are also becoming more widespread, allowing keen buyers to view properties from afar without needing to travel – an especially useful development for those living in distant locations or those with hectic work schedules.
12. Consider where you can cut costs on renovations
Buying your first property can come with a hefty price tag and the potential for costly repairs. If you’re looking to buy your first property in 2023 and beyond, consider where you can cut costs on renovations or home improvements without sacrificing convenience and functionality. For instance, investing in high-quality kitchen gadgets can help you save money in the long run by reducing food waste and increasing cooking efficiency. Opting for discount materials or finding cheaper alternatives for decorative items is also a smart decision, as well as enlisting the help of a local tradesperson to tackle more complex repairs and installations.
By researching the average price of various home improvements and renovations, you can make sure you’re getting value for money and ensure that any modifications are done properly. It’s also important to know where you shouldn’t cut corners. Instead of opting for cheap furniture, invest in high-quality pieces from suppliers like Doors2Floors.
With tumultuous times for the economy ahead, it’s important to take the right steps when buying your first home. By thoroughly researching the market, inspecting your property and cutting costs on renovations where you can, prospective buyers in 2023 and beyond can be confident that they are making a sound investment.