According to a new Which? survey, thousands of homebuyers are blowing their budgets in a bid to secure their perfect property. Would you?
You know exactly how much money you’ve got to play with, but then you spot your dream home and it costs more than you had in mind. Would you concede that it’s beyond your means and look for something that’s more in line with your upper limit or blow your budget and hope for the best?
If it’s the latter, you’re not alone. According to our 2017 Which? Home Movers Survey, one in five buyers spend more than their top budget, with a fifth of these overspending by 15% or more.
Why are homebuyers overspending?
Considering the current state of the UK property market, you might not think this is surprising.
On the other hand, it could be argued there are more schemes than ever to help buyers, particularly first-timers, with small or tight budgets.
The government’s Help to Buy schemes are helping record numbers of first-time buyers onto the property ladder.
Meanwhile, first-time buyers who open a lifetime Isa can claim up to £36,000 of government money towards a mortgage deposit.
What’s more, our latest analysis reveals the amount of 95% mortgages available has soared since the financial crisis.
However, it isn’t just the deposit that buyers have to find. Many may not realise how much money they need to cover additional costs, such as stamp duty, conveyancing fees, etc. These costs may well be sending many homebuyers over budget.
See our handy guide for a full list of services you’ll need to pay for, and how much they may set you back.
As well as the initial cost of buying a property, it’s important to consider the ongoing costs of homeownership.
Since the introduction of the Mortgage Market Review, lenders have become more stringent when deciding who qualifies for a mortgage.
This means it’s less likely you’ll be saddled with a mortgage you can’t afford to repay. Still, it’s worth making sure you’re clued-up on the best mortgage for your circumstances.
Are you a homeowner? Did you overspend when you bought your current property or did you fall well within your budget? What more can be done to help people onto the property ladder, and to prevent homebuyers from blowing their budgets?