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TODAY'S OTHER NEWS

First-time buyers confused by mortgages

The Royal Institution of Chartered Surveyors is calling on the industry to help young first-time buyers understand the process of buying a property.

This follows research showing that just one in five young buyers who looked into mortgages found the process to be simple.

And only 30% believed that it would take over 30 years to pay off their mortgage.

The results came in a survey by NatWest which revealed that many ‘millennials’ - young adults aged 22-30 – do not have a good understanding of the core buying matters.

Many are confused about how much deposit is needed, the mortgage process, lending requirements, how long it will take to pay off a mortgage and where to find financial support.

The NatWest Millennials Home Buying Survey also revealed that, 69% of young adults believe they will have saved enough for a deposit within five years.

However, 41% admitted they did not know how much deposit was required, suggesting that many may be overly optimistic.

Of those who said they did know how much deposit they would need, the most common estimate was 6-10% of the house price.

RICS said first-time buyers should become familiar with their local housing market in order to see what properties are available within their budget, and budget to save a minimum 10% of the property’s value for the deposit.

Andrew Bulmer, FRICS residential director at RICS, said: “It’s important that young buyers have a clear understanding of their local housing market – including what areas they can and can’t afford to buy in - as well as the buying process.

“Until the rate of home building sees a significant increase, it’s likely that house prices will continue to increase, especially in the more popular areas, where competition for homes is much greater.

“Therefore, saving up as large of a deposit as possible will not only help secure a purchase, but also the best mortgage deal with a lower interest rate.”

RICS has created a Consumer Guide to Buying a Home aimed at first-time buyers explaining financial advice, instructing a solicitor, the benefits of a Home Buyer Survey, to what to expect when exchanging contracts.

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