How to make it on to the property ladder
For many people in their 20s and early 30s it can seem like an uphill struggle to find their footing on the elusive property ladder. However, there are a number of schemes and strategies in place that are aimed at encouraging young people to take their first initial steps towards owning their own home.
With high house prices, a lack of house building and stagnant wages, first-time-buyers need to be very determined in order to make any inroads into home ownership. It’s a given that saving up for that initial deposit might mean that you have to make some cut backs on luxuries, nights out and holidays, or it might mean changing your living arrangements so that your rent is cheaper. However, you might not know that some estimates suggest that it can take first time buyers up to five whole years to save up enough money for their deposit. Yikes!
Fear not though, there are a number of initiatives out there which can help you with your aim of establishing a home. One of those, sponsored by the government, is the ‘Help to Buy’ scheme. Help to Buy is an equity loan which allows first time buyers to purchase a property with a relatively small deposit. The government loans you money to put down as part of your deposit, freeing you up to be able to put down a larger deposit than initially planned and therefore making your mortgage more affordable. You may be eligible to borrow up to 20% of the purchase price of your home provided that you can put down a 5% deposit yourself. Click here to find out more about Help to Buy: https://www.helptobuy.gov.uk/.
If you are a council and housing association tenant in England then you may be eligible for the Right to Buy scheme. The Right to Buy scheme helps tenants who have lived in a property for at least 5 years to be able to purchase their home with a discount of up to £78,600. Click here to find out more: https://righttobuy.gov.uk/
One avenue for buying your first home is to club together with third parties such as friends or family. This is known as a joint purchase, and some mortgage lenders will allow as many as four parties to be involved in the purchase, even without all four persons living in the property.
Finally, another route on to the property ladder for first time buyers is that of Shared Ownership. This is when you purchase only a percentage of a home and rent the remaining share, normally from a housing association or council. The share you own is typically 25-75% of the property but you should be able to purchase further shares later on in order to own the home outright. Click here to read the pros and cons of Shared Ownership: https://www.hudson-moody.com/latest-news/shared-ownership-explained/133205.
For some in-depth advice on saving for your deposit, and other hints and tips for first time buyers, please click here.