Are you a first time buyer after separation?

Waiting for a divorce to be finalised can be a challenging time, as you might be planning your next move in life and your options. If everything goes smoothly and is agreed upon, divorce proceedings can take a few months, but can sometimes be longer if there are complications. Either way, buying a new house during these proceedings can be risky, so it’s important to understand the do’s and don’ts of being a first time buyer after divorce.

In this Black Norman guide, we will take a look at being a first time buyer after divorce in the UK and how our conveyancing team can help you find the perfect next step in your life. Continue reading to find out more.

Am I considered a first time buyer after divorce?

A first time buyer is someone who has never owned or held an interest in a residential property or area of land within the UK or anywhere else in the world. However, if previously you owned a property with a partner, and through divorce or separation, you are now no longer a homeowner, it is not uncommon for you to be considered a first time buyer again by some lenders.

Some lenders may also give previous homeowners access to first time buyer products and rates in specific circumstances, such as divorce or separation.

Although not technically a first time buyer, lenders may treat you as this if you have not owned a house within the last 3 years. You may therefore be eligible for some of their first time buyer incentives and products that contain benefits such as cashback.

If you have ever owned a property at any point, purchased, inherited or otherwise and no matter how long  ago, you will not be eligible for exemptions for stamp duty as a first time buyer. You will instead pay standard rates of Stamp Duty as you cannot be a first time buyer twice.

In the next section, we will cover more about these benefits and why they make purchasing a property as a first time buyer much easier.

The benefits of being a first time buyer

Stamp duty relief

If you are a first time buyer, you will receive stamp duty relief of up to £425,000 on any property up to the value of £625,000. Therefore, you will not have to pay stamp duty on any amount up to the relief amount. Usually, if you have ever owned a property, you will not be entitled to this unless you have recently gone through or are going through a divorce and no longer have interest in the family home.

Government scheme eligibility

If you are a first time buyer in the UK, you could be given the opportunity to buy a home for 30% to 50% less than its market value through the Government First Homes Scheme. You can then pay the rest in rent instalments through a shared ownership scheme. This means that you need less money upfront to buy the property.

The government also launched an initiative called the Mortgage Guarantee Scheme. This allows first time buyers to put down just a 5% deposit, and the government will provide a guarantee to mortgage lenders on the portion of the mortgage between 80% and 95% of the property’s original value.

Get in touch with us today for more information on these government schemes.

Lifetime Individual Savings Accounts (ISA)

First time buyers have an advantage when it comes to savings. With a Lifetime ISA, you can save up to £4,000 per year and the government will add 25%. These can be opened from the ages of 18 to 39, so if you qualify as a first time buyer during this time, it is recommended to open a Lifetime ISA to see your house fund grow faster. This can be particularly useful if you are a first time buyer after separation.

Learn more about opening a Lifetime ISA by contacting Black Norman’s conveyancing team today.

How Black Normans conveyancing team can help with your property purchase

The process of buying a property can be complex, which is why it’s important to speak to an expert who knows how to handle the process. Whether you’re buying or selling a property, remortgaging or transferring ownership through a Declaration of Trust, our expert property purchase solicitors can help you.

Get in touch with our specialist team today so that we can talk you through the process and help you take your next steps in purchasing a property.