Affordable property prices and nearby amenities prove a big draw
Research from Experian has shown that 20% of homebuyers planning to put down roots in and around Swindon are buying for the first time, making it the tenth most popular location for ‘aspiring homemakers’ in the UK.
The findings show that, increasingly, those wanting to set up a home and start a family are looking at other parts of the UK, rather than the traditional urban and suburban hotspots. In the South West, the Swindon area is proving irresistible to this group, due to its relatively affordable house prices and commuting distance to the amenities of Oxford.
James Jones, head of consumer affairs at Experian, commented: “While choosing to look outside of traditionally more expensive areas in favour of more reasonably priced locations like those found in Wiltshire means getting on the first rung of the ladder is now a reality for many aspiring homemakers, it’s nevertheless vital to understand that lenders will apply the same levels of scrutiny to affordability for all mortgage applicants, regardless of where you look. “Understanding lending criteria is crucial, as is careful preparation as soon as you make the decision to buy. Building a positive credit history and a solid track record of money management is the first step though to ensuring that you get the mortgage you can afford and a home that is right for you, at the best possible rate.”
The research went on to reveal that other hotspots for aspiring homemakers around the UK include: Bracknell Forest (25%), Milton Keynes (24%), Tamworth (23%) and Rushmoor (23%). Boroughs Lambeth, Camden, Hammersmith and Fulham, Westminster and Kensington and Chelsea are unsurprisingly the least popular with the group. In a city where 54% of people cannot afford to purchase where they live, families are escaping the inner city and looking for more amenable locations.
In order to help these buyers to secure their dream home, Experian has produced a helpful guide that takes people step by step through the process of preparing to apply for a mortgage. The guide includes tips, advice and suggestions of how people can make themselves as attractive as possible to lenders, and is available online: http://www.experian.co.uk/consumer/improve/index.html
Here are some simple tips from Experian CreditExpert to help people prepare for a mortgage application:
One year before making an application
Scrutinise your spending: Scrutinising your outgoings carefully will help you understand where your money is going. Build good habits like increasing the amount you save, clearing overdrafts and cutting back on discretionary spending to ensure you close out the month with even a small surplus. If you are moving to a different location, it is important to take things like added cost of travel to work into consideration.
Do your research: Use mortgage calculators and comparison websites or speak to a mortgage adviser to find out where the best deals are in your chosen area and what type of mortgage will suit your circumstances. Work out what you can afford to borrow and repay, both now and if rates rise by 1%, 2% or more.
Check your credit report: As soon as you make the decision to buy, check your credit report with all three credit reference agencies. Ensure everything is accurate and up to date and reflects your current circumstances. If you spot anything you believe to be inaccurate, contact the relevant credit reference agency and ask them to investigate the entry with the lender.
Room for improvement: If your credit report has areas for improvement, make a plan to get it into shape well before making your mortgage application. There are a number of steps you can take, including: ensuring you’re registered on the Electoral Roll; paying down outstanding balances to less than 50% of your limit; paying off more than the minimum repayments on your accounts each month and making sure never to miss a repayment.
Six months out
Know what you have to spend: Consider what funds you can draw together to form your deposit. The size of your deposit will often dictate how much you face in terms of interest rates and lender fees. It is good practice to find out what the property prices in your chosen area are, and work backwards looking at how much you have to spend on outgoings.
Get quotes: When you’ve done your research, make sure you understand the difference between a quote and an agreement in principle. A quote will tell you what mortgage rate you’re likely to get and how much repayments would be, and it won’t affect your credit score. An “agreement in principle” will tell you if a lender is likely to offer you a specific mortgage. This requires a full search of your credit report and will leave a footprint that can be seen by other lenders.
Avoid additional borrowing: A flurry of recent applications for loans or other types of credit may worry mortgage lenders as it can make it appear you’re in financial difficulty, so it’s best to avoid borrowing for about six months before making your application. Lenders will also look at whether you’ve increased or decreased your borrowing year on year, and will look more favourably on you if you owe less this year than you did last year.
Just before you apply
Don’t fall at the last hurdle: Right before you make your application, take time to do some last-minute checks. Check your credit report again to make sure nothing has changed and everything is accurate right before you apply. Check the exact way your address and other personal details appear on your credit report. Small inaccuracies could see your application turned down, so don’t overlook the details.