November 24, 2014

5 Tips to help you get on the Property Ladder

If you read and watch the news, you would have noticed that they keep telling us that it is almost impossible for anyone under the age of 30 to own their own property. In fact the reported figures suggest that we could well be into our 40’s before we are able to afford to buy-and it’s even worse if you live in London! However, don’t let some facts and figures put you off-you could buy your own home sooner than you think. We share 5 tips to help you get onto the property ladder.

 What is so bad with renting anyway?

There are currently 3.9 million people living in private rented accommodation in the UK. Renting is an opportunity to live in a fantastic location-pretty much stress free as long as you have an assured shorthold tenancy agreement; you will be protected with a break option and your landlord has safeguarded your deposit in a government approved deposit scheme such as www.tds.gb.com.

Owning a home is expensive; the cost does not stop once you put down that lump sum for your deposit.  Remember to include in your budget the cost for yearly buildings insurance.  If you purchase a flat you will likely be a leaseholder and are required to pay a yearly service charge and ground rent.  In some residential blocks these payments can total in excess of £2,500 per year.  Owning a freehold property could also come with the unexpected costs of repairs to your roof and central heating system which require urgent attention at very short notice.  To safeguard against any unexpected repairs make sure you buy an independent RICS (Royal Institute of Chartered Surveyors) homebuyers report from a reputable surveying practice before completing on your purchase.

Save, Save, and Save some more.

Property is expensive; making little cut backs on your everyday spending will help you reach your deposit goal sooner.  The money advice service also provides great tips on budgeting and managing your money.

It is true; those with the largest deposits get the best mortgage rate deals however no matter what size your deposit you can still get onto the property ladder.

Research government backed schemes

In 2013 Help to Buy was launched and the government promised to lend you up to 20% of the value of a property in the form of an equity loan. You will have to find a 5% deposit and secure a mortgage to cover the other 75% of the cost of the property. This 20% loan is interest free for the first 5 years.

There are several new build schemes which promote shared ownership allowing you to purchase a small share of a property and pay rent for the share you do not own.  As the value of property increases, so does the share you own. ‘Staircasing’ enables you to purchase a larger share of the property at a later date.

Get together with like-minded people.

Getting together with a few friends to save a large enough deposit is a good way of getting on the ladder. Just make sure you draw up a contract to guarantee everyone’s interest in the property and to protect your own share of the deposit amount.

Look outside of your City centre.

Okay, we would all love to live the fast life in the City but let’s face facts; the asking price of some house’s in City centres is more than triple those which are located on the outskirts. We have to ask ourselves: why not go for the cheaper option?

Most towns now have excellent transport links into the City and have lower demand for property which makes housing cheaper and more affordable for the first time buyer.  There is also more potential for your property to increase in value especially if you jump into an area that is ‘up and coming’.

All hope is not lost, there are things that you can do now to at least make you more eligible and get a jump start on the ladder. Think about getting together with friends, making the most of the government backed schemes and maybe start making your own salad a few days a week instead of splurging on a Pret sandwich! The jump onto the property ladder is never easy but do not be disheartened-where there is a will there is a way!

Written by Elaenore Fom, Property Manager and Trainee Surveyor in Notting Hill, London.

Confused about how you may juggle balancing a career with motherhood, check out our Girls, Career and the baby race feature here: https://www.girlstalklondon.com/girls-careers-and-the-baby-race/ (This can be done on your own terms too!)