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Am I still a first-time buyer if I inherit a property?
If you inherit a property, you are no longer classed as a first-time buyer. Being a buyer is based upon ownership, so if you own the property that you've inherited, you're not class as a first-time buyer.
This means that you will no longer qualify for any first-time buyer schemes, however, you will own a house that you can either now live in, or sell to purchase a different property.
With new schemes such as the Help to Buy ISA and easier access to mortgages with smaller deposits, the government and banks are trying to help create a favourable market for first time buyers who have been dubbed “Generation Rent.” Many around the UK rely on these preferential rates to become homeowners and it’s important to understand how inheriting property can affect someone’s status if they decide to apply for a first-time buyer scheme.
While inheriting property may seem like an opportunity to take a step onto the property ladder, it’s not always feasible to keep the property. Whether you want your first home to be in a different area of the country, or you have to sell the property due to an agreement made between the properties various beneficiaries, there are many reasons why you may opt to sell this house. It's also important to look at what happens when you inherit a house with a mortgage.
If you do decide to sell the property, buying a house with the inheritance money can be a great alternative, meaning you can then purchase a property that you really want. Although you won't qualify for the first-time buyer scheme, you will have available funds to be able to use instead.
Typically, when someone applies for a first-time buyer scheme with a bank, one of the first questions they are asked is if they have ever owned a property before. While a beneficiary may believe they have not owned their own house before, the moment the deeds to their inheritance was given to them, they legally became a property owner.
One way this may not apply to a beneficiary is if the estate sold the property. In this scenario, they do not inherit any property, only the money they are due from the sale.
While a beneficiary may no longer be applicable to the benefits presented to first-time buyers, their inheritance does provide them with some new avenues to buying their own house, even if they do not want to move into to the currently owned property.
What about selling the property myself?
Selling the property will give the prospective homeowner access to the funds that will help them secure their next property, and if they are willing to wait until the property sale is fully completed they can look for homes as a cash buyer, pretty much avoiding the often-fickle property chain.
However, time can often be of the essence and a beneficiary may not be able to wait until the property is placed upon the market, viewings are organised and potential buyers get their offers sorted. Throughout the UK, the average property can take a minimum of 8-10 weeks before the keys are exchanged and for some who have unexpectedly inherited a property, this can be too long. An alternative solution could be to come to us, We Buy Any House, who are willing to offer cash which could be in a bank account within 14 days.
Inheriting a property can remove your status as a first-time buyer, however, it is not going to prevent anyone from buying their dream house. The preferential rates offered are there to help those who are struggling and with the money from the sale of the inherited property, beneficiaries may find themselves in a better position than if they used any of the first-time buyer services.
We buy any home in as little as 3 days, or timescales to suit you. Head to our website for more information.