The prospect of buying a house for first-time buyers is looking more and more daunting as the months go by. Raising a deposit and affordability remains the key issues stopping many from getting on the housing ladder.

House prices are continuing to soar – annual price rises have been in double digits for months – and interest rates are rising making the cost of mortgages more expensive. This has resulted in the need for much bigger deposits to be saved.

UK Finance claims that typically a first-time buyer has scrimped and saved for a deposit worth almost one quarter of the property’s value, averaging around £60,000. Meanwhile, salaries are not keeping pace – the Office for National Statistics (ONS) puts prices at more than nine times average earnings.

Homeowners have stretched themselves like never before to get a foot on the property ladder while prices surge at a pace not seen since before the financial crisis. The main driver of prices is that the UK housing market continues to see demand for properties outstripping the number of homes on the market.

Image credit: Future Plc/Colin Poole

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: ‘Many will feel that the opportunity to own their own home is nothing more than a dream. Fortunately for them, there are opportunities to climb onto the property ladder. Whether standing on their own two feet, utilising a government or council scheme or a housing association– the likelihood is, there is a scheme out there to help.

‘A mortgage adviser will be able to guide you through the process and find the most suitable product for you.’

First time buyer schemes – what’s available?

First Homes scheme

The newest scheme on the block is the First Homes scheme, launched by the government in June 2021. You get a discount of between 30% – 50% off the price of a new-build property in England (this scheme is not available elsewhere).

To be eligible you need to be aged over 18, never have owned your own home before and be buying the home as part of a household where total income is no more than £80,000 (or £90,000 if you live in London).

Prices after the discount has been applied are capped at £250,000, with the exception of London where the limit is £420,000. This means it would be possible to buy a property with a maximum market price of £357,000 to £500,000, depending on the discount, and valued at as much as £840,000 in London with 50% off.

Buyers must use a mortgage for at least 50% of the price of the discounted home. Military veterans and key workers such as nurses, police officers, teachers and firefighters are typically given priority, but people in other jobs can also benefit depending on local authority rules.

The scheme is designed to keep offering benefits to a chain of buyers, so the discount is locked into the property. This means that when you come to sell you must offer the same discount you enjoyed on its market value.

To apply, contact the developer (or estate agent if you’re buying from a previous First Homes buyer) and tell them you want to buy a First Home.

Pros:

• Big discounts on the purchase price
• Help communities stick together for generations to come.

Cons:

• Only available on new build homes
• Potential lack of available homes in your area

Image credit: Future Plc/David Giles

Help to Buy

For buyers in England with a 5% deposit who want to move into a new build, there’s help under the government’s Help to Buy equity loan scheme.

The scheme is now exclusively for first-time buyers, having previously been open to all. As before, the government will lend homebuyers up to 20% of the cost of a newly built home, and up to 40% in London. Regional price caps have been introduced, however. For example, in the north-east it can only be used on homes worth £186,100 or less and in the south-east the limit is £437,600. In London the maximum is £600,000.

The equity loan is interest-free for the first five years, and can be paid back at any time, up to the maximum loan term of 25 years.

After five years, you will be charged 1.75% interest which then increases every year in April, by adding the Consumer Price Index (CPI) plus 2%.

The Welsh variant of Help to Buy is relatively similar to that of England, with the Government loaning you up to 20% of the property’s price, interest-free for five years. After five years, you will be charged 1.75% interest which then increases every year in April, by adding the Consumer Price Index (CPI) plus 1%. The properties must be new build from a builder registered with the scheme and to be worth no more than £250,000 in price.

Both schemes are due to end in March 2023.

To apply in England, you need to apply through the Help to Buy agent in the area where you want to buy your home.

To apply in Wales there’s an online application form.

The Help to Buy (Scotland) scheme is no longer available and it is not available in Northern Ireland.

Pros:

• Only a small deposit of 5% is needed
•  Loan is interest-free for five years

Cons:

• Only available on new build homes
• Regional caps might be prohibitive
• Interest charges after five years could be expensive as linked to inflation

Image credit: Future Plc/Douglas Gibb

Mortgage guarantee scheme

A government support scheme announced in the March 2021 Budget means it is now possible to get a mortgage with just a 5% deposit again.

Behind the scenes, the government provides the lender with a guarantee on the mortgage. Borrowers can apply as normal to a lender for a 95% home loan.

There are some restrictions for the buyer. You cannot use the scheme to buy properties worth more than £600,000 and it must be a repayment mortgage (paying both the interest and capital) rather than an interest-only mortgage. The scheme cannot be used for second homes or buy-to-let properties.

Some 95% loans are only for houses – flats, maisonettes, or even new-builds might be excluded. The self-employed are not eligible for 95% loans from some lenders and criteria may be stricter.

The requirement for a small deposit will only benefit people who are already earning enough to borrow the mortgage they want. You still need to pass affordability tests.

To apply, speak to a fee-free mortgage broker about which lenders can help with first-time buyer mortgages.

Pros:

• Only a small deposit is needed
• Many mainstream lenders participating

Cons

• Price caps on property value
• The self-employed could be excluded
• The loans might not offer the best first-time buyer mortgage rates

Right to buy

This enables eligible council and housing association tenants in England to buy their home with a discount of up to £87,200 (£116,200 inside London). The longer you have been a tenant, the bigger the discount you could get.

You probably have the Right to Buy if you have spent at least three years renting from a council, housing association or government department. The three years don’t have to be continuous.

To find out if you’re eligible you can use this eligibility checker. You can apply here once you’ve established if it’s right for you.

In Northern Ireland, you can apply to buy your home if you’ve rented your home from the Housing Executive or a housing association for the last five years. However, if the property is a one or two bedroom bungalow, or in a sheltered housing development it won’t qualify.

The scheme ends for housing association tenants this summer. You must apply to buy your home by 28 August 2022.

Right to buy is not available in Scotland or Wales.

Pros:

• Big discounts are available
• Some mortgage lenders will take the discount as a deposit

Cons:

• If you sell your home within the first five years, the landlord has the right to ask for repayment of all or part of the discount

Image credit: Future Plc/Douglas Gibb

Shared ownership

Shared ownership enables people who can’t afford to buy outright to purchase a share of between 25-75% of the property’s value. They get a mortgage on this portion and the deposit needed is relatively small as it’s only needed for the share you buy.

The balance is covered by monthly rent to a housing association. Buyers have the opportunity to buy more shares, known as staircasing, subject to affordability checks. This means you increase the amount of equity you own in the property and will get a bigger uplift when it’s eventually sold.

To apply, contact your local authority’s housing team to ask about housing associations in your area.

You can find helpful information on websites such as Share to Buy, the government’s Own Your Home website, or Homes for Londoners if you live in London.

Shared ownership in Wales is similar to the scheme in England, where you buy 25% to 75% of your home and rent the rest. You need to have a combined income of £60,000 or less and not be able to buy the property without assistance. Under the rules you must buy from a participating landlord.

To apply in Wales there’s an online application form.

In Scotland there’s the New Supply Shared Equity (NSSE) scheme which is open to first-time buyers (as well as other priority groups such as the over 60s). As the buyer, you’ll pay for the biggest share – usually between 60% and 80% of the home’s cost – and the Scottish Government will hold the remaining share under a ‘shared equity agreement’, which it will enter into with you.

You need to contact the local council or social landlord who can provide you with details of how to apply and will assess your application to see if you qualify. You can find a scheme in your area here.

Northern Ireland has two shared ownership schemes; Co-ownership Housing, and FairShare. Both allow you to buy 50-90% of a property and then pay rent on the rest, whilst gradually increasing your share when you can afford to.

Co-ownership Housing is for homes worth up to £175,000. FairShare is used by certain housing associations for new build properties worth up to £160,000. You can apply here.

Pros:

• Enables a more accessible and cheaper route onto the property ladder
• Ability to increase your share of equity in the property

Cons:

• Not all mortgage providers will offer mortgages for shared ownership
• Shared ownership properties are leasehold
• You don’t own it in a fully legal sense until you have staircased up to 100%

Rent to Own (Northern Ireland)

You rent a new-build property from government-backed developments (although private companies are also available) for three years and receive 20% of your rent back to help you save a deposit. Available properties are new build properties worth less than £165,000, with 10-year warranties.

Bear in mind this involves a £2,500 upfront payment to Own Co at the start of the process, once you’ve been approved.

Wales’ Rent to Own scheme is now closed.

Pros:

• Bank 20% cashback if you buy the property
• Rent will not increase during your tenancy

Cons:

• You have to pay Co-Ownership a £2,500 down payment

Do I qualify as a first time buyer?

Most schemes require you to have never owned a property in the UK before, although this doesn’t apply to the mortgage guarantee scheme. Many of them also require that you could not afford a property without the relevant scheme – so that the help goes to those who really need it.

David Hollingworth of L&C Mortgages says: ‘There’s a range of different schemes so it’s important to understand the varying requirements and way they work. Schemes will have different eligibility requirements in order to make sure that the help is aimed at the right target group. They will often be for first time buyers only but there could be other limits such as a maximum income limit or maximum property value.’

The post First time buyer schemes to help you get on to the property ladder appeared first on Ideal Home.

Heading to a festival this year? Let us introduce you to Aldi’s brand new bell tent, which looks far more expensive than its £399.99 price tag.

Whether you managed to bag Glastonbury tickets or are simply seeking a little luxury on a camping trip, this cute tepee-style tent is a fab option for sleeping under the stars. The aesthetics are 10/10, plus it’ll accommodate several happy campers at once.

Image credit: Aldi

Aldi bell tent

Aldi’s new premium bell tent is an online exclusive available to pre-order from this Sunday (June 12th) on the Aldi website. It has a spacious camping area, measuring five metres across. There’s also plenty of headspace so you’re not bending down all the time.

The sleek design will make the tent easy to spot in a sea of ordinary tents and, most important of all, Aldi says it will take one person fewer than 20 minutes to put up. So less time spent grappling with poles and pegs and more time lounging around by the bonfire.

We also think it would work brilliantly as a garden idea. Pitch it at the bottom of the garden and you’ve got an extra, shaded zone for guests to hang out in when you have friends over for summer barbecues.

Image credit: Aldi

The Aldi bell tent has, thankfully, been designed with the unpredictable British weather in mind. It’s fully waterproof and made from 100% cotton canvas that regulates the temperature to keep campers happy whatever the weather.

The sides are removable, so you can invite a fresh afternoon breeze and 360 views in the daytime and create privacy and warmth come evening. It’s launching as part of the supermarket’s Family Camping range, which you can check out on the Aldi site.

After two years of last-minute cancellations, Aldi certainly understood the assignment and created this tent to help shoppers return to normality in style. It’s a far cry from the basic bright blue tents of our childhood camping trips, that’s for sure.

Image credit: Aldi

All that’s missing are some lovely Aldi outdoor rugs and cushions for extra comfort. Hang up festoon lights or use your existing garden lighting ideas to create a cosy atmosphere.

Happy glamping!

The post Aldi is selling a bohemian-chic bell tent just in time for festival season appeared first on Ideal Home.

Boris Johnson is expected to set out plans to extend the right-to-buy scheme to include housing association tenants, and enable people to use housing benefits to pay towards mortgages to boost homeownership in the UK.

The new measures where confirmed in a major speech in Lancashire today. Boris Johnson said ‘Just as no generation should be locked out of home ownership because of when they were born, so nobody should be barred from that same dream simply because of where they live now.’ The speech restated the government’s commitment to extending the right-to-buy scheme to housing association tenants. It also included suggestions that housing benefit could count towards mortgage payments.

Levelling Up Secretary Michael Gove said: ‘By extending Right to Buy and bringing forward the most comprehensive review of the mortgage market in decades, we are backing first-time buyers, breaking down barriers to homeownership and delivering on the people’s priorities.’

PM plans to extend right to buy scheme

The right to buy scheme was introduced under Margaret Thatcher’s government in October 1980 and allows anybody who lives in council housing for a certain number of years to purchase it for a discount of up to 70 percent. The new proposal plans to extend this to people living in properties owned by housing associations – not-for-profit bodies that rent low cost homes. There is currently a scheme in place for housing associations, but the maximum discount is limited to £16,000, while the right to buy scheme discount is currently capped at £87,000 (or £116,200 in London).

Image credit: Getty

According to The Times the Prime Minister will argue that the £30 billion in housing benefit that currently goes towards rent could help people secure and pay for mortgages. Housing benefits are available to help low-income or unemployed people pay their rent. A person is not usually eligible for housing benefit if they have a mortgage.

The Times report expanded that the plans are likely to be limited to a series of pilots for now, without additional government funding. So stark changes shouldn’t be expected soon.

The proposal has already been met with criticism from Labour leader Sir Kier Starmer in an interview said the plan is evidence the government is ‘completely out of idea.’ A version of the proposal was trialled in 2015 under David Cameron. Kier Starmer called it a ‘reheated’ idea.

‘For people who want to buy a house, affordable housing, this is not the answer. They know it’s not the answer – I don’t think this is actually going to happen,’ he said.

However, some industry experts are optimistic that an extension to the scheme could help aid first-time buyers. However, they warn that there are still plenty of hurdles, including the cost-of-living crisis, to housing becoming more affordable in the UK.

‘The government’s introduction of the Right to Buy scheme is welcomed,’ says David Hannah, Group Chairman of Cornerstone Tax. ‘It is a great initiative that will aid buyers (especially first-time buyers and those on low incomes) in purchasing a property. However, I think rising interest rates, inflation and the cost-of-living crisis remain serious hurdles in preventing housing from becoming affordable for all Brits.’

The post Boris Johnson plans to extend right-to-buy scheme – what it could mean for first-time buyers appeared first on Ideal Home.

Most home insurance policies will only cover an empty home for a set period – if your property is left empty for longer than this, you’ll need unoccupied house insurance to ensure it’s adequately protected.

Also known as ‘empty property insurance’ or ‘vacant property insurance’, unoccupied house insurance is a specialist insurance policy that will cover a vacant property for three, six, nine or 12 months – sometimes longer.

‘A home that is left unoccupied for a significant amount of time represents a higher insurance risk for insurers,’ says Greg Wilson, founder of Quotezone.co.uk. ‘Not only is the house an easier target for burglars, vandals and squatters, but there’s also a higher risk that the building or its contents might be damaged by rising damp, mould or burst water pipes when the house is left empty.’

Follow this extensive Q&A report that explains why you need unoccupied house insurance, the costs and what it covers.

Why do you need unoccupied house insurance?

Standard home insurance policies won’t offer adequate cover if a property will be vacant for a long time.

Image credit: Future PLC

‘Most house insurance policies allow for a shorter period of no occupancy, such as 30, 60 or 90 days, but for anything longer than that, as described in the wording of your policy, you’ll require specialist cover,’ explains James Slater, chief executive at ST&R Limited.

There are a number of reasons why a homeowner might leave a property unoccupied or empty for a lengthy period of time. Common reasons include:

• Working overseas
• Extended holidays
• Void periods between tenants
• Sale-related delays
• Probate-related delays
• Away from home health care
• Extensive renovation works

How much does unoccupied house insurance cost?

Unoccupied property insurance tends to be more expensive than standard home insurance. This is because vacant properties are considered a higher risk by insurers.

Unoccupied properties are more likely to be damaged by:

• Vandalism
• Fire
• Flooding

For example, a burst pipe at an unoccupied property could go unnoticed for longer periods which would make the water damage worse. This would probably increase the cost of the subsequent insurance claim.

The cost of unoccupied home insurance will vary between providers. Cover and costs depend on a number of factors such as where the property is located, its value, any previous home insurance claims and the level of cover required.

If the property has contents, you’ll need to let your insurer know the total value of your possessions for these to be covered too. It is wise not to leave valuables in an unoccupied property.

Image credit: Future PLC/ Polly Eltes

Do you need unoccupied home insurance when someone has died?

A common scenario where you might need unoccupied home insurance is if someone has died. The property will be unoccupied while probate is granted and the family decides on the best option moving forward. That might be a family member moving into the property, the home being placed on the market or it being rented out.

The executor of the deceased’s will must collect the deceased’s assets, settle their liabilities and distribute anything remaining as requested in the will.

Alex Milton, at law firm Moore Barlow, says: ‘Executors are personally liable for any mistakes they make whilst administering an estate and any consequential loss that may arise. Executors should protect and preserve the estate.’

‘This includes making sure that insurance is maintained on estate property. If, for example, there is a fire in an estate property and the executor has failed to maintain valid house insurance, then the executor could be made to pay for the repairs from his or her own pocket.’

Some home insurers will continue to provide cover until a set time, so you won’t need to take out a new policy. Sarah Smith, head of home underwriting at LV= General Insurance, says: ‘At LV= we will continue to provide cover on an existing policy in the name of an executor until the property is sold or under new owners.’

However, check whether there are any conditions attached to the policy – the property might need to be internally inspected at least once a week, for instance. Alternative arrangements might also be needed to pay on-going premiums as the deceased’s bank account will be frozen once the bank is aware of their death.

Image credit: Nick Richards

What does unoccupied home insurance cover?

Policies vary regarding the level of cover offered. Be sure you read the policy and understand what you’re covered for – and what isn’t covered.

Unoccupied home insurance will always include buildings cover. Buildings insurance covers the structure and fittings of a property including:

• Walls
• Roof
• Pipes
• Fitted kitchens
• Carpets
• Flooring

A good policy needs to protect you against risks including:

• Storms
• Floods
• Fire
• Water leaks
• Theft or attempted theft,
• Vandalism or malicious damage

A more comprehensive policy will also include legal expenses. For example, you might need legal assistance to remove squatters.

Another inclusion or add-on is property owner liability. This will protect you against compensation claims raised by third parties who have been injured as a result of the property not being maintained.

Some policies will also offer add-ons covering damage due to fallen trees, fly-tipping, and broken windows.

How can I get cheaper unoccupied property insurance?

Adding security features, such as burglar alarms and decent door and window locks, could help to cut the cost of your unoccupied home insurance.

Installing smart cameras and smart devices will make it easier for you to monitor the property yourself via your mobile phone. This means you can react quickly to any incidents, reducing the likelihood of making a claim. For example, smart leak sensors can alert you if there is a leak in the property.

Keeping the property well-maintained and looking lived-in can reduce the probability of a break-in or squatters moving in.

‘It’s also worth reviewing the excess to see what you’re comfortable with,’ says Wilson. ‘A high excess charge can help make the policy more affordable initially but if you’re not likely to have an extra lump sum saved should the worst happen, then it may represent a false economy. Paying annually can also help keep costs down, rather than monthly.’

When you insure any property, it’s important to give the insurer an accurate ‘rebuild value’ – this is the cost of completely rebuilding the property from scratch. Unless you own a listed building, the rebuild value is usually less than the market or sale value – so make sure you don’t over-insure your property.

Some unoccupied home insurance policies will require you to take certain steps to reduce the risk of a burst pipe. For example, heating the property to a certain temperature in winter or turning off the water supply.

Image credit: Future PLC/ Rory Mulvey

How to compare unoccupied house insurance quotes

Firstly, assess whether you need unoccupied home insurance. Check the policy wording of any existing home insurance. If the property will be empty for longer than the limit stated on the policy, call your insurer to see if it can offer additional cover.

If you need unoccupied home insurance, you should shop around for the right policy at the right price. With standard home insurance, you can compare quotes using price comparison websites, such as our sister brand GoCompare, Confused or MoneySuperMarket, but it’s not as easy to do this for unoccupied home insurance. Instead, you’ll need to contact individual insurers to ask for a quote.

Most insurers want to know the condition of the property before they offer you cover. It can be more difficult to find insurance if a property is in a poor state of repair. For example, it might have boarded up entrances or roof damage.

Different insurers will take differing approaches to the checks you need to make on a vacant property. Some will require you to leave the heating on using a timer in winter to stop pipes from freezing and bursting. Others might expect you to regularly visit the property.

Who offers unoccupied property insurance?

Specialist Unoccupied home insurers include:

• GuardCover
• Endsleigh
• Towergate
• Adrian Flux
• Home Protect

What are ‘unoccupied building conditions’?

Some insurers insist that certain terms and conditions are stuck to for unoccupied home insurance to be valid: these are called ‘unoccupied building conditions’.

Unoccupied building conditions can include:

• Draining down water systems
• Switching off utilities
• Weekly documented visits

Failure to comply with their unoccupied property insurance guide and conditions could lead to any claim you make being turned down. Some insurers will let you choose which conditions you want to include – these will affect your premium.

What are unoccupied home insurance exclusions?

Every insurance policy comes with ‘exclusions’ which are events not covered by the insurance policy.

Unoccupied home insurance exclusions might include theft by unforced entry such as an unlocked door or open window or damage caused by contractors or builders.

Image credit: David Barbour

What happens if I don’t have unoccupied house insurance?

If your home will be left empty for longer than a standard home insurance policy permits, it’s important that you take out an unoccupied home insurance policy.

‘If homeowners don’t have unoccupied home insurance and the property is damaged or vandalised while it’s vacant, then the homeowner could be solely responsible for any repairs or financial implications,’ says Wilson.

What happens if the property becomes occupied again?

Once the property is occupied again, there will no longer be any need to have specialist unoccupied house insurance.

‘You should contact your provider as soon as possible and arrange more suitable coverage,’ says James Slater. ‘It may be that in the interim your empty property policy allows for a timeframe of occupancy and no further action is needed until renewal, but only by speaking to your provider will you know for sure.’

How to make an unoccupied home insurance claim

If  you need to make a claim on your home insurance, these are the steps to follow:

• Call the police if relevant – If your property is broken into, burgled or vandalised, call the police. They will hopefully investigate the crime, and also issue you with a crime reference number that you will need to give to your insurer to progress your claim.
• Call your insurer straight away – Although you can usually make claims up to six months after an insured event, it’s best to get the ball rolling straight away. Contact your insurer – it will tell you the next steps you should take. Most insurers operate claims helplines 24 hours a day.
• Retain insurance evidence – If you’ve had a fire or flood, don’t throw damaged belongings away immediately – wait until you’ve had the go-ahead from your insurance company. In some circumstances, they will send a ‘loss assessor’ to assess what has been damaged, destroyed or lost.
• Take photos – The more evidence you have to support your insurance claim, the better. Photos of damage to your property or destroyed possessions can make your claim easier. Especially if the insurer disputes the amount you are claiming for or what happened.
• Keep receipts – If you need to make urgent repairs to your property – for example, fixing broken locks – keep your receipts as you’ll need them for your insurance claim.
• Claim approved – When your claim is approved, your insurer will either organise the necessary repairs or send you a cheque for the amount you’ve claimed so you can arrange the work yourself.

With thanks to Rachel Wait for her contributions to this article.

The post Unoccupied house insurance: why and when do you need it? appeared first on Ideal Home.