Research Reveals: First-Time Consumers’ Largest Fears – Wealth and Finance Worldwide

The largest concern raised by first-time patrons is experiencing a ‘home worth drop/damaging fairness’. Actually, 31% of respondents mentioned they’re anxious about their property changing into much less worthwhile than the remaining worth of their mortgage.

Nisha Vaidya, mortgage editor at cash.co.uk, mentioned: “There are some things you must take into account if you wish to keep away from damaging fairness. Firstly, it’s necessary to be sure to pay the market worth for the property, so don’t draw back from negotiating on the asking value.

“Secondly, the bigger your deposit, the extra fairness you should have within the property. So, if you’ll be able to save sufficient, placing down an even bigger deposit is a good suggestion.”
Whereas placing down a bigger deposit is a good way to unlock decrease rates of interest and higher mitigate shifts in home costs, over 1 / 4 of first-time patrons mentioned they’re anxious that they wouldn’t have the ability to save on the similar tempo because the rise in home costs.

Nisha Vaidya, a mortgage editor at cash.co.uk, supplied the following tips for saving for a deposit:
● Setting a funds: Along with understanding how a lot deposit you’ll want, there are different prices to contemplate when buying a house, reminiscent of survey prices, solicitor or conveyancer charges and insurance coverage. However by setting a funds, you’ll have the ability to plan out your financial savings targets and begin saving in your preferrred residence.
● Minimize the price of your lease: You’ve most likely requested your self the query ‘How to economize for a home’ a number of occasions, however a technique is by paying much less lease to unlock extra cash in your deposit fund. For those who stay alone, contemplate shifting right into a home share or dwelling with household to avoid wasting on rental prices.
● Get a lodger: For those who stay alone and have house, taking in a lodger could be a good way to assist subsidise the price of renting and offer you more money to avoid wasting for a deposit. Earlier than you start your seek for a brand new flatmate, test your landlord is completely happy so that you can share their property and sub-let a room.

The third commonest fear skilled by first-time patrons is being ‘unable to afford your mortgage long-term’ – a priority skilled by 22% of respondents. 

Nisha Vaidya added: “In case you are anxious about affording your mortgage, there are methods a purchaser can get assist. This kind of assist can embody: a fee deferral, an extension to your mortgage time period and a change to your mortgage sort. In case you are seeking to purchase a brand new residence however have monetary worries, utilizing the Assist to Purchase scheme may give you the assist you want. 

This Governmental scheme gives patrons an fairness mortgage they’ll use to assist purchase a brand new construct residence, permitting patrons to buy a property with a 5% deposit and obtain a mortgage for as much as 20% of the property worth, which will likely be curiosity free for five years. The patrons should then take out a normal mortgage for the remaining 75%.”

Furthermore, the pandemic has affected us in some ways, and it has created new issues in numerous elements of our lives, together with monetary ones. The survey carried out by cash.co.uk reveals that 13% of first-time patrons concern ‘COVID-19 influencing a spike in costs’.

This isn’t the one concern folks have because of Covid-19. With many individuals changing into distant staff, confusion has arisen in regard to the place it’s greatest to purchase, within the eventuality of going again to the workplace. 5% of respondents have mentioned they’ve issues relating to the ‘uncertainty about location with working from residence [WFH]’. 

{Couples} who purchase collectively have additionally admitted {that a} massive concern is ‘breaking apart with somebody after shopping for collectively’, with 11% of individuals fearing a separation may create difficulties with property associated issues. 

Nisha Vaidya, a mortgage professional at cash.co.uk, mentioned:

“Getting on the property ladder generally is a nerve-racking expertise for first-time patrons, as being misinformed can price drastically – whether or not it’s dropping out on a dream residence or dropping some huge cash within the course of. Nonetheless, the perfect factor first-time patrons can do is do their homework totally earlier than embarking on this journey.
“Being geared up with the proper info will minimize the chance of encountering disagreeable eventualities that many first-time patrons concern, reminiscent of experiencing damaging fairness or being unable to afford a mortgage long-term. As soon as you might be assured in your information the method must be much less dangerous and extra thrilling.”
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Methodology
● Mortgage consultants at cash.co.uk carried out a survey by which 1,501 folks participated. The query “As a first-time purchaser, what’s your largest concern?” was requested.
● The survey pattern is damaged down as follows: 56.5% male respondents, 43.5% feminine respondents. 8.5% had been aged 18-24, 19.5% had been aged 25-34, 13.7% had been aged 35-44, 17.0% had been aged 45-54, 22.9% had been aged 55-64 and 18.4% had been aged 65+.
● Geographically, 77.7% of respondents had been from England, 15.6% of respondents had been from Scotland, 6.1% had been from Wales and 0.7% of respondents had been from Northern Eire.

*Figures offered by https://ahrefs.com/.