Property: The nightmare of your first time

'If it feels right, go for it' may be the advice of some estate agents, but virgins to the property market do have a lot to learn, says Ginetta Vedrickas. Not least, don't panic
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Indy Lifestyle Online
Those of us sitting prettily in properties of our own can bask in the warm knowledge that our assets are increasing, unless of course we want to trade up. Not everyone is so smug, and for first-time buyers rising house prices equal rising panic and the fear of never getting even a toe on the property ladder.

Sarah Collier and her partner Kevin were renting a flat until the birth of their baby Thomas brought an urgent need for a house of their own: "We've never been so sensible in our lives before." The couple shared the same vision of their ideal home, "a terraced cottage with two bedrooms, proper sash windows and definitely a garden", but the search in Streatham Common, an area "with loads of friends and family", proved difficult.

Were agents helpful to the first-timers? "We were worried because prices were rising and, despite being specific about our requirements, agents tried to get us to look at horrendous basements without gardens or flats, five storeys up, which would be impossible with a baby and a buggy," says Sarah.

The couple found that anything decent was "snapped up the same day" and despaired of finding somewhere, until one day Sarah chanced upon a little cottage that was having its sale board erected. Sarah knocked on the door and found the owner was a friend of a friend. Through the agents, Sarah arranged to view and later that day offered the asking price, pounds 75,000, without Kevin even seeing the house. The offer was accepted with a brief query from Kevin: "What if I don't like it?" "You've got to like it," was Sarah's reply.

So far so good but a late-night visit from their agent brought a serious hiccup. Another couple had offered an extra pounds 5,000, which the vendor accepted. And the agent? "He was very embarrassed and said it had never happened before in all his years' experience. He was a genuinely nice man," says Sarah, who decided to match the offer as long as the vendor promised faithfully not to accept further offers. The deal was struck and Sarah and Kevin became property owners earlier this year. Was the process stressful? "We came in and said, thank God. What a complete nightmare."

Sarah and Kevin found the survey part of the procedure relatively painless. Kevin is an architect and trusted his own judgement. But agent Nick Harrington, of Winkworth in Streatham, says that first-time buyers can be a jumpy lot: "When the survey comes back they panic. Agents should pre-empt the panic and tell them what to expect. We've had a few teetering sales but we take it as our personal mission to steer them through," says Nick with the saintly repose of a man hell-bent on commission.

Richard Turnbull, financial adviser for Patrick Knight, is less zealous but, as well as securing the best possible mortgage deal for his first- timers, arms them with the facts: "I always make sure they know exactly what they're getting themselves into."

Most first-time buyers take out loans of between 70-90 per cent of the value of the property. Richard finds that most of his current clients have deposits of around 10 per cent and, until recently, faced expensive mortgage indemnity guarantees (MIGs) that protect the lender not the borrower. Earlier this year, several of the big lenders abolished MIGs for borrowers who can raise a 10 per cent deposit which has given a boost to the first- time market.

Richard believes that first-time buyers are more knowledgeable than in previous years, partly because they have greater access to a media that can help them decide which mortgage is best, although he warns: "A mortgage product is about more than getting a fixed-rate of 3.89 per cent for two years. Look carefully at the fine detail and make sure you can afford it when the rate rises."

Some first-time buyers pay more in rental than the cost of mortgage payments and this was the case for production assistant Julian Meakins, who recently bought a one-bedroom flat in Acton, west London: "I was renting a studio flat in Camden, near work, but my parents kept nagging me to buy somewhere so I did." Julian received a "whopping great deposit" from his parents, which enabled him to buy the pounds 110,000 flat. What's it like? "It needs work and I'm not exactly the DIY type but I am paying less than when I was renting," Julian says.

How is he coping with the restoration of his flat? "I'm not. I plan to employ an architect, if I can afford it," adds Julian. One-bedroom flats in London are plentiful where converted houses make up the bulk of the market. As one agent eulogised: "We pile 'em high and sell 'em cheap."

First-timers may be attracted by the special deals that developers offer on 'starter homes' but bear in mind that, like new cars, new flats tend to cost around 20 per cent more than re-sales. Julian Meakins with his "whopping great deposit" could choose from pretty much anywhere in London, but the financially challenged may have to seek out less popular nooks and crannies that are awaiting discovery.

Nick Harrington has a one-bedroom flat in Streatham on offer at pounds 58,000, but finds that first-timers often miss out the flat stage and go straight for two-bedroom cottages: "They've been renting for years and have saved large deposits," Nick explains.

Gordon Blausten, of Notting Hill agency Bruten, is London's estate agent of the year and offers this advice: "Speak to a bank or broker before you fall in love with somewhere and then realise you can't afford it. It will be difficult to find somewhere similar for less," says Gordon, who sees this scenario regularly, if not often.

And how do you choose your first home? "If it feels right, go for it," Gordon advises, and avoid the painful scenes he frequently witnesses. "First-time buyers often return a month after viewing and ask if the first place they saw is still available." Sadly, it usually isn't.

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