If you’re a young person in Dundee trying to buy your first home, you will know it’s not easy.
With the cost-of-living crisis and high mortgage rates, for some it feels impossible.
But Dundee is still one of the most affordable cities in Scotland to buy in.
So what are the challenges faced by first-time buyers and how realistic is getting on to the property ladder?
We heard from a young couple who say they couldn’t have bought their new home without inheritance money.
We also spoke to a mortgage advisor about the current property market and why he believes that anyone can still buy a house.
Buying felt impossible for young Dundee couple
Kirsty and Sandie Dawson, who got married last year, bought their first home in the Main’s Loan area of the city last month.
Having rented their entire adult lives, becoming homeowners felt impossible due to the cost of living crisis and increased mortgage rates.
But inheritance money from grandparents gave the couple a beacon of hope.
Kirsty, 31, said: “Buying a house is something we’ve always looked at but we’ve rented for pretty much our whole adult lives.
“We have always kept an eye on the market but the reality for a long time is that we were not in a position to buy.
“It was finding a deposit that was the problem.
“Saving while renting at the same time and living through the cost of living crisis was the biggest block.”
Inheritance money gave couple a beacon of hope
It was only when the couple inherited money from their grandparents that they could seriously consider buying a home.
Kirsty said: “If we hadn’t had that help with the deposit we certainly wouldn’t be in this house now.
“And I think it would be quite a long time before we were in a position to get a house.”
Kirsty and Sandie, 34, who are enjoying their new build home, recognise that they are luckier than most.
Kirsty said: “It is 100% harder for people who don’t get inheritance or help from their parents.
“Landlords are putting rent prices up, food shops are going up, petrol is going up, insurance is going up…
“How can you then put away enough money each month to save?
“It’s not impossible but a lot of people don’t have the disposable income at the moment to put anything away on a monthly basis to then save up that pot for the deposit.
“We have friends who didn’t buy their first home until they were in their 40s.”
The couple say their mortgage journey became easier after they received advice at one of TSPC’s First-Time Buyers Evenings in Dundee.
Dundee mortgage advisor explains main challenges faced by first-time buyers
Kessar Salimi, a mortgage advisor at Financial Freedom in Dundee, has been helping people buy homes in Dundee since 2017.
He says the “main problem” buyers are facing is the lack of properties currently on the market.
He explained: “Because there are only a few properties on the market, it is preventing other people from selling properties.
“This means that there are a lot of buyers bidding for the same properties, which is pushing the prices up.
“The properties then tend to go for above the home report value.”
Lenders will not let buyers borrow more than the house value, which leaves lots of first time buyers in a sticky predicament.
But it’s not all doom and gloom for people hoping to buy in Dundee.
“The prices in Dundee are still quite low compared to other cities.
“I deal with clients all over Scotland and you are getting much better value in Dundee than the other cities.
“The market is fairly buoyant here and has always been very stable.”
Can anyone buy a house in Dundee?
Kessar says anyone can buy a house – even without inheritance or help from the ‘bank’ of mum and dad.
He said: “We deal with clients in all different situations.
“A lot of the lenders only need to have a 5% deposit, so sometimes we see people save as hard as they can for a few years to get that deposit together to get on the property ladder.
“Other times, people might move back in with family to try to save up the deposit as well but there are also other incentives as well.
“If buyers get a good plan in place and they know how much they need to save towards that deposit, pretty much all the clients we speak to will find a property.”
There are also money-saving schemes and incentives that can help first-time buyers in Dundee.
Stamp duty relief is one of them.
Kessar said: “The LBTT (Land and Buildings Transaction Tax) threshold is slightly higher for first-time buyers, so for a regular buyer it would be £145,000 but for first time buyers it is £175,000.
“This means they can buy a slightly more expensive property without paying any tax on it.”
Meanwhile, shared equity schemes, where buyers own a percentage of the property, can also help them get on the ladder with a much smaller deposit.
Incentives and money-saving schemes for first-time buyers in Dundee
Perhaps the most well-known incentive is the Lifetime ISA, which is only available for first time buyers.
If you save up a deposit in that account, the government give you a 25% bonus. We see people make use of this fairly often,” Kessar said.
Some lenders, including the Skipton Building Society, even offer 0% deposits.
Kessar explained: “It is called a ‘track record mortgage’.
“What the lender needs to see if that you have a track record of renting a property for 12 months.”
That could help them access a 100% mortgage.
What would he say to first time buyers in Dundee, who may be struggling to stay optimistic in the current climate?
“I would recommend talking to a mortgage broker to see what your financial situation is like – how much borrowing you can get and how much of a deposit you actually need.
“Then you can make a plan from there.
“Check out your credit report as well – that is key when it comes to lending.
“Then if there are any issues on your credit report then you can get them rectified before applying for a mortgage.”
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