It’s always a momentous occasion when someone takes their first step onto the housing ladder.
If you’re hoping to achieve this someday soon, may be wondering what to do.
We’ve given 8 top tips for in this blog.
1. Increase your income
This is, of course, easier said than done!
Your income is one of the most important tools for getting onto the housing ladder.
By increasing your income, you can save more towards a deposit. And a mortgage lender will also allow you to borrow more money.
You could consider getting a second job. Or you could sublet an extra room in your existing accommodation, if you’re allowed.
Try negotiating for a pay rise at work as well, if you meet certain milestones.
2. Find someone who you could move in with
It’s far more affordable to get on the property ladder when you’re doing it with someone else.
Your combined incomes will allow you to borrow more from a mortgage lender. And your combined deposits will be larger, as well.
It’s crucial that you find someone you can trust. This isn’t necessarily your ‘best friend’ – as key factors like:
- Cleanliness
- Money
- Security
All matter.
You will need clarity on the legal arrangement when you buy with someone you’re not married to.
A ‘joint tenancy’ or ‘tenants in common’ arrangement could both work. The latter is more popular with unmarried people.
3. Lower your expectations for location and size
You could need to adjust your expectations for the property you’re aiming for.
Maybe you’ve always had a ‘dream location’ or house size. And the truth is, you can still achieve those things – but further down the line, later in your life.
For your first step on the property ladder, you need to start small.
And you may want to research locations where the average house price is lower. Even less expensive towns can have almost everything you need.
4. Make saving money a habit
Forming habits is crucial when you’re trying to save money. You can’t allow your emotions to get the best of you!
Transferring money into a savings account as soon as you receive your monthly payment is a smart idea.
Even if these numbers aren’t too huge, it can add up over several months and years.
Plus, make sure to research high interest savings accounts, so your money is working a bit harder for you.
5. Consider support schemes
There are plenty of schemes that help you to get onto the property ladder.
One of the most popular is ‘Shared Ownership’. This means that you buy a portion of the house and can then increase your share over time.
It allows you to build up some equity, even if your deposit and income isn’t too large.
In England, the government is still running the ‘First Homes Scheme’. This could allow you to buy a house for 30% to 50% less than its usual value.
The ‘Right to Buy’ scheme is also in place in the UK, for anyone living in a council house. If this applies to you, make sure you take advantage of it.
6. Cut down on your costs
Saving up for a house isn’t just about increasing your income: it’s also about reducing your expenses.
You may need to make some tough decisions about the big costs in your life. Taking a yearly holiday could need to be a thing of the past – at least in the short-term!
And if there’s a car gathering dust in your driveway, which you aren’t using, then it could be time to sell it.
Even the smaller habits can add up to hundreds, or thousands, of pounds throughout the year. Overspending on food is one of the best examples!
7. Explore all your mortgage options
You should do thorough research on the mortgage options available to you. This can give you a leg-up in your journey to get on the property ladder.
A mortgage in principle confirms how much a lender will allow you to borrow. This is essential for setting your budget.
You can also clarify whether your credit score is acceptable, and if not, what you can do to improve it.
Some mortgage options are favourable to first-time buyers. A 95% mortgage enables you to get on the housing ladder with a smaller deposit.
And a guarantor mortgage could work if you’ve got a family member willing to partake.
Put careful thought and consideration into these options, though. Although it can seem attractive in the short-term, there are major long-term downsides.
8. Prepare for timing on dream house offer
Preparation is key when you’re taking your first step on the housing ladder. Once you’ve found a property that ticks all the boxes, you don’t want it to slip away.
And having your documents ready is a crucial step to moving quickly. You should also have a solicitor supporting you who can begin right away.
Both of these steps will mean that you move fast, and the seller is more likely to take the house off the market. They’ll trust that you’re a serious buyer.
Documents needed include:
- Proof of ID
- Proof of funds
- Mortgage in principle.
Speak to your solicitor for a full list of what you’ll need.
