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Home Buyers Struggling to Raise Deposits

First Time Buyers Up in 2017, but Deposits Still a Stumbling Block

After years in decline, the number of first time buyers rose in 2017. But so did the average deposit they needed to get a foot on the property ladder.

Over the past decade, the number of first time buyers has been stuttering, as those looking to strike out on their own have struggled against a tide of rising house prices. But figures released by the Halifax suggest that 2017 saw a turnaround, with around 359,000 first time buyers completing their purchases during the calendar year. This is almost back to the number reported in 2007.

Yet while the figures give cause for cautious optimism, mortgage brokers in Essex warn that the average deposit first time buyers need to find has almost doubled over the same period, from less than £18,000 in 2007 to more than £33,000 in 2017.

Help to buy

The report suggests that low interest rates and the government’s help to buy scheme have combined to push younger individuals and couples back toward the idea of buying. This comes after several years in which a growing number have seen little option but to rent. This has led in turn to the growing trend of those with money in the bank choosing buy to rent as a lucrative investment option, and making more people than ever into private landlords.

Are the latest statistics an indicator that home ownership will see a swing back towards owner occupiers? Perhaps, although in some areas, it is still almost impossible to amass the necessary funds to put down a deposit.

Geographic variation

It will come as no surprise to hear that the most expensive place to set up home is London, where the average deposit needed is an eye-watering £112,206. In the borough of Brent, the average first time property price was around £365,000, almost 13 times the gross average earnings for UK citizens.

At the other end of the scale, the picturesque borough of Copeland, on the edge of the Lake District in Cumbria, was the most reasonable, with the average price of around £82,000, or just under three times the national salary.

The nationwide average price paid by first time buyers is about £208,000, and the average in Essex stands at around £250,000. This is still more than eight times the average salary. However, more first time buyers are setting up home in the south east than anywhere else. How are they managing it?

Longer mortgage terms

Government initiatives might assist with the problem of finding that all important deposit, but that still leaves the balance of the mortgage to consider. In days gone by, the traditional calculation involved three times the household income for a mortgage over 25 years. Today, there are far more variations.

As house prices have risen faster than salaries, a growing trend has emerged towards longer mortgage terms. Ten years ago, 48 percent of first-time buyers went for a mortgage term between 20 and 25 years, and 38 percent were between 25 and 35 years. Today, the pattern has essentially reversed. Just 26 percent go for a 20 to 25 year mortgage, while 56 percent have gone for a term in excess of 25 years.

tenancy agerement

A Renter’s Guide To Getting Your Bond Back

Securing your deposit: 6 tips for tenants

From cleaning the carpets to weeding the garden, there are a number of steps a landlord expects you to take to help ensure you get your security deposit back.

Renting a home can be an expensive business; before you even move into the house, you’re usually required to pay one month’s rent in advance plus a hefty security deposit. When you move out you are entitled to have this deposit returned to you unless you have damaged the property or caused the landlord to suffer a financial loss – however, in reality, deposits are often a big cause of dispute between tenants and landlords. We’ve put together some hints and tips to help increase your chances of getting your money back at the end of your tenancy.

Go through the inventory

Upon moving into the property you should be given an inventory which details the condition and contents of the property – and if you’re not, be sure to ask for one. Take time to go through the inventory with a fine tooth comb and flag up anything you think is incorrect – for example, if an item is listed as good condition but is actually broken, or if there is an area of damage or disrepair that isn’t included in the inventory. The inventory will be a key piece of evidence in the event of a dispute so it’s important to make sure it’s correct.

Take photographs

As well as going through the inventory, it’s also worth taking photographs when you first move into the property. Take photographs of all the rooms in their original condition and be sure to photograph any areas of damage, or furniture that is in a poor state of repair. As with the inventory, photographs can play an important role in helping to solve any disputes.

Stick to the contract

When you move into the property, take time to read the contract properly and make sure you stick to it. If the contract says you can’t have a pet, or you can’t attach things to the wall, you will need to abide by these rules or risk losing some of your deposit. If you do decide to put up pictures or paint walls, make sure you return the walls to their original state before you move out.

Build a good relationship

While it’s no guarantee of getting your money back, building a good relationship with your landlord from the outset can help increase the chances of settling things amicably if a deposit dispute does arise. Be sure to always pay your rent on time and try not to give your neighbours any reason to complain about you. And if your landlord needs access to the house to carry out repairs or inspections, being helpful and flexible is always appreciated.

Deep clean

Over half of deposit disputes involve insufficient cleaning of the property, so make sure to leave enough time to give the property a deep clean before you move out. While your landlord can’t legally force you to hire professional cleaners, your contract will usually stipulate that you leave the property in the condition in which you moved in, and a failure to do so could result in the loss of all or some of your deposit. As well as the obvious areas, don’t forget to clean your windows, oven, the insides of kitchen cupboards, and clean or paint over any scuff or dirt marks off the walls. Carpets often get stained during a tenancy which can result in deposit deductions. If you can’t get rid of these stains yourself, it may be worth paying out for professional carpet and rug cleaning services to help get the floors back in a decent condition.

Don’t forget the garden

While you’re concentrating on cleaning the house it can be easy to forget the garden. However, if your contract states that you are responsible for the maintenance of the outside area, an unkempt garden could lead to deductions from your deposit. The easiest way to ensure the garden is in a good condition is to keep on top of it throughout your tenancy. A spot of weeding and sweeping here and there will save you having to spend hours clearing it on the last day of your tenancy.
These days, your rental deposit has to be placed in a tenancy deposit protection scheme by the landlord until the end of the tenancy. The scheme offers a free dispute resolution service and, in the event of a dispute, your deposit will be held in the scheme until the issue has been resolved – so, as a tenant you do have some element of protection against unfair charges.

However, if you are a good tenant, stick to your contract and spend some time and effort on the property at the end of the tenancy, you should hopefully get the majority, if not all, of your bond back, leaving you with a heavier wallet and your landlord with a good condition property ready to let to the next set of tenants.