Buying your first home is always an exciting time. Yet for many this can remain a dream for long periods of time. This is often due to extremely expensive process with a deposit being the key issue for the majority. This is where Fairview comes to help with their new Save to Buy scheme.
This scheme can make property ownership extremely affordable. This will also allow many people to get keys to their first home in a much reduced time frame.
I will give my take on this scheme below with all the key stats you need to know summarised for you.
what is save to buy scheme
Save to buy is a great opportunity for a first time buyers to turn their home ownership dream into a reality at a significantly reduced cost. In one of my previous blogs I explained all the costs linked to buying a home. Deposit is by far the biggest expense and the one that causes the most issues for people looking to get on the property ladder.
This is where the Fairview Save to Buy scheme comes in. You can secure your new home with a deposit that is as little as 1% of the property value. This is significantly cheaper than the usual deposits of 5-10% that are required to buy your own place.
Not only you get to buy your first home with a significantly reduced deposit – this home is also a newbuild.
What the above means – you get a highly energy efficient home that comes with a 10 year warranty on top for your peace of mind.
One other thing that you get with this purchase – the smell of a new home where you will be the first person to live. Doesn’t this sound amazing?
what is the process to get you new home
The process of getting your new home is extremely simple. This will be good news for many people who are used to dealing with complicated processes in order to get what they were promised.
In order to be considered for this – you need to apply with Fairview team and be approved by their chosen financial advisor. Once that is done – you agree a price for the property and exchange contracts with only 1% deposit needed at this stage.
As part of the contract you also agree the monthly rent you will pay for your new home. The beauty of this rent – 100% of this goes towards your deposit.
So for example – if the monthly rent you pay is £1,200, after 5 month of living there your deposit will go up by a total of £6,000. This scheme is incredible.
Once your deposit is within 1 month of reaching the required deposit to purchase – you can apply for a mortgage.
The next step is simple and beautiful – you complete the purchase. You simply sign the required documents and become the homeowner.
what do I need to be aware off
There are few watch outs with this scheme that you have to be aware off.
Firstly, there is currently a limited number of properties that this scheme covers. This might be a dealbreaker for some. The current locations are in parts of London and Essex only. There is however a plan to expand the list further.
Only first time buyers are eligible to use this scheme. This eliminates some of the people who might have had properties of some sorts in their name in the past.
The scheme is currently running only up to December 2023 – so there is very limited time to apply for this. Also, as you probably guesses – these properties are allocated on first come basis. So be quick while these are available.
One further watch out to keep in mind is the time given for you to save the full deposit amount. This is limited between 6 months to 2 years. In the above example – if the rent is £1,200 this would add up to nearly £29k over 2 year period. It is impressive to think how much money is wasted on rent and paying someones mortgage out.
what alternatives are there to save to buy
If the above does not work for you – there are some alternatives to consider. One of these is Lifetime ISA or LISA. This savings/investment account allows you to save up to £4,000 per year. The government will add an additional 25% for free into your account.
As a first time buyer you would be able to use this money to purchase your home. And as a result the government will pay a large part of your deposit for you.
Other options you can consider – shared ownership. This is a great scheme that allows you to part buy and part rent a property. This makes a home purchase a lot more affordable.
summary
Save to buy can be an amazing opportunity for some to get on the property ladder with significantly reduced deposit requirements. This will be achieved through the fact that for a period of time you will be paying rent that will be fully saved in your deposit pot.
This scheme won’t work for everyone as number of properties will be fairly limited as well as locations might not work for all. There are alternatives currently available that can make your home ownership a lot more realistic.
It is always worth looking around and considering everything that is available to you. This can one day make your dream actually come true!