Getting on the housing ladder
It’s hard to get on the housing ladder these days. House prices have soared over the last decade making many properties unaffordable for first-time buyers, particularly in London and the South East.
There are various ways first-time buyers can get additional help however. We run through the main areas to look at below.
Help from parents
First-time buyers are increasingly getting help from their parents in order to get on the housing ladder. There are various ways to do this, assuming your parents agree of course!
The simplest way is for parents to contribute towards a deposit. In some case, parents have even remortgaged their own property in order to find the money to do this. It’s also possible for parents to be a guarantor for your mortgage, meaning they would be liable to make the payments if you weren’t able to do so.
Buy with friends
Many first-time buyers are teaming up to buy a property together. While this can mean a bigger budget, it’s important to think about what happens should your circumstances change and one or more people want to move out. You may want to have a contract drawn up by a lawyer to cover what happens in these circumstances.
First-time buyer mortgages
Many mortgage companies offer special deals to first-time buyers or recent graduates. Sometimes they will offer to pay for legal fees and valuations and even waive their normal arrangement fees. Graduate mortgages typically allow you to borrow more money in return for a guarantee from your parents that they cover part of your mortgage payments if necessary.
Government schemes
The government offers a range of schemes to help first-time buyers. These include the Key Worker Living Programme, which assists those in the certain areas of the public sector such as teachers and nurses. There is also the Homebuy scheme which allows you to buy a property in conjunction with a housing association.
Longer and longer mortgages
A final option is to look to pay back your mortgage over longer than the usual 25 year period. This has the impact of lowering your initial payments but will result in you paying a lot more interest in the long run.