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Regional First-Time Buyer Mortgages

Property markets and mortgage lending vary between UK regions. Here we explore varying lender attitudes depending on your postcode and the benefits of using an experienced mortgage advisor.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2024-06-15
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Regional First-Time Buyer Mortgages

First-time buyer mortgages are complicated enough. However, if you're buying a home in Scotland, Wales or Northern Ireland, you'll also need to know about changes to regulations and first-time buyer support schemes.

Not all mortgage products are universal, and the rules around costs like stamp duty will depend on where you are buying a property.

In this guide, the Revolution team explains how first-time buyer mortgages work in each UK region outside of England, so you know what to expect from the process.

For more tailored advice, please get in touch at 0330 304 3040, or email us at [email protected].

Finding a First-Time Buyer Mortgage Northern Ireland

One of the most popular first-time buyer initiatives in Northern Ireland is called Co-Ownership - it's designed for people who want to buy their first property but can't afford the deposit or the purchase alone.

There are eligibility requirements, but you can apply if you're buying a home worth under £175,000 - anything more expensive won't be eligible.

Co-Ownership is designed for open market properties, so it does not apply to existing homes rented through the housing association.

You'll also need a National House Building Council warranty or a Zurich warranty for any relatively new build home that has been constructed from 2000 onwards.

However, if you're on a low income and can't buy a property alone, you could find that Co-Ownership makes it far easier to get onto the property ladder in Northern Ireland.

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Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.

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Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.

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Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.

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How Does a First-Time Buyer Mortgage NI Work With Co-Ownership?

Co-Ownership in Northern Ireland is a scheme managed by the Co-Ownership Housing Association.

In essence, you buy a proportion of the home and pay rent for the remaining balance to the association. This scheme is similar to Shared Ownership.

There are a few rules that you'll need to meet to be eligible:

  • The first-time buyer needs to purchase at least 50% of the property through a residential mortgage.
  • You can buy a more significant proportion, up to 90% as a maximum.
  • When the property is bought, your lease with the association runs for 99 years and is an equity-sharing lease registered against the property.
  • Applicants can choose to buy the 50% minimum and then purchase additional chunks of at least 5% each - or they can stick with the original purchase split and keep paying rent.

Rent payable through Co-Ownership is designed to be affordable. It is worked out at 2.5% of the proportion of the home that belongs to the association.

For example, if you buy 65% of a property, the association will charge rent for the other 35% proportion.

Each year the association reviews the rent charges and links this to the Retail Prices Index. It may increase each year slightly depending on inflation.

If your rent does go up, you'll be given a month's notice.

When a Co-Ownership property is sold, the proportion that belongs to the association is still theirs, so they'd be entitled to 35% of the sale proceeds in the above scenario.

Can a Mortgage Broker First-Time Buyer Expert Help Me Buy a Home in Scotland?

Yes, and there are several Scottish first-time buyer schemes available!

One option is to consider Help to Buy - this was initially available only in England but has since been rolled out in Scotland, albeit with some slight differences.

As in England, you can only use Help to Buy to purchase a new build, and the buyer can be either a first-time buyer or somebody moving home.

You'll need a minimum 5% deposit to qualify and can then borrow up to 20% of the property value from the Scottish government in the form of an equity loan.

The scheme helps because a lender is likely to offer far more advantageous terms to someone with a 25% deposit, particularly a first-time buyer, than someone who can put down 5% on the cost of buying a new property.

Here are the differences between the Scottish and English Help to Buy schemes:

  • In Scotland, there is zero interest payable on the equity loan, no matter how long has passed since you applied - in England, you start paying interest if you haven't refinanced the loan in five years.
  • Scottish Help to Buy properties are capped at £400,000, compared to £600,000 in England (note that caps differ between London and the rest of England).

Are First-Time Buyer Buy to Let Mortgages Available Throughout the UK?

Yes, there are mortgage lenders who offer products to applicants throughout the UK.

Others focus on a specific region, so a local lender might only consider properties in Scotland or Wales, for example.

However, a whole-of-market broker can help regardless of where you're based and where you'd like to buy a home!

How to Get a Mortgage First-Time Buyer in Wales

In Wales, the schemes are different again. One of the best first-time buyer initiatives is called HomeBuy, funded by the Welsh government.

Local housing associations and councils manage this programme. Still, it isn't available in every area since only councils with a designated housing association in the district can offer the scheme.

HomeBuy is aimed at people in Wales with low incomes, so anybody in this category can apply, whether or not they are first-time buyers.

If you apply, you'll need to provide evidence about your income. Acceptance means that you meet the conditions to be categorised as low-income for the mortgage application process but have demonstrated affordability.

Applicants for the Welsh HomeBuy scheme cannot be in rental arrears, receive housing benefits, or have been benefits recipients within 12 months of applying.

HomeBuy does allow people to purchase a property with a joint applicant. Still, in this situation, they'll apply the same income measures to determine whether you qualify - so you'll need to have a combined income that means you wouldn't be able to purchase the home without help.

Using HomeBuy as a First-Time Buyer in Wales

Like the Scottish support initiative, HomeBuy means you can borrow from the housing association. In this scheme, you can borrow between 30% and 50% of the property value.

The balance of the purchase cost needs to be covered with a residential mortgage from a recognised lender, i.e. a bank, building society or another legitimate lender.

Contact Revolution if you're interested in applying and need to know which mortgage providers offer HomeBuy mortgages in Wales.

There are no monthly repayments required towards the loan - it remains in situ until the property is sold.

The amount payable will depend on how much the property is now worth on the market when you sell the property.

For example, if the HomeBuy loan was for 40% of the property value, you'll need to repay 40% of the sale price if you sell.

Help From the Leading First-Time Buyer Mortgage Advisor

For any more information about the first-time buyer schemes in Northern Ireland, Scotland or Wales, give the mortgage brokers team a call on 0330 304 3040 or drop us a message at [email protected].

With years of experience supporting our clients, we'll evaluate the options available and help you find the most suitable first-time buyer mortgage in your chosen UK region.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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