A Solicitor’s Tips for Getting Onto the Property Ladder
If you have just graduated, are looking for your first job or even if you are at an early stage of your university life, chances are that eventually getting on the property ladder is something you aspire to. It might currently be fighting for a place on the priority list with ‘what are we doing on Friday night?’ but either way, joining the property market is one of life’s chief aspirations, and it is something you need to start thinking about and planning towards now.
Doubtless you have heard many scare stories about how hard it can be for first-time buyers, but there are less barriers to home-ownership than you think, and with some strategic planning and shrewd judgement it is far from impossible to be fresh from graduation and settling down in your first home within a reasonable timeframe. Here at Ison Harrison, widely-recognised as one of the largest solicitors and conveyancing service providers in Leeds and the wider Yorkshire area, we can take you through some trusted advice on how to get on the property ladder.
Sounds obvious, but it is fundamental to making any headway in the property market. Of course you need money for a deposit, plus stamp duty, legal fees and searches, but saving money instils a certain discipline that you will also definitely need once you have moved into your home. There are more 95% mortgages around now than there has been for many years, but on average you can still be looking at having to save around £10,000 for a deposit on a first home. It is wise to set up a direct debit to transfer an affordable amount from your salary into a savings account, that way you are not tempted to spend it and you already have some discipline in your life. Of course, you need to be realistic, and while you should still aim to enjoy your life and recreational pursuits such as nights out and hobbies and interests, maybe this is a time for some lifestyle shifts? Do you really need that gym membership? Can you cut down on your beer intake a bit? Definitely cut down on using your credit card, and maybe look into more online deals when buying clothes or seeking out restaurants.
Other ways to save money quickly could involve moving back in with your parents temporarily, if that is an option. It may not seem too appealing, but short term pain can be long term gain. Also, you should look into Help to Buy ISAs, which is an interest free savings scheme specifically for first-time buyers. Your monthly input is capped at an affordable £200, so saving for a deposit can take up to four years, but the Government help by topping up your savings by a maximum of £3000.
Schemes To Help The First Time Buyer
The Government’s Help to Buy scheme specifically for first-time buyers has now ended, but there are other options available, such as an Equity Loan. Here, the Government loans you 20% of your property purchase cost, as long as the property is a new-build. You then only need to find a 5% deposit and a mortgage for the remaining 75%. Shared Ownership is another helpful scheme, whereby first-time buyers can agree a share in a property between 25-75% and pay rent on the remainder. Of course there are drawbacks to each of these, but depending on your circumstances, these schemes may suit you perfectly. It is also an option for some people to borrow from parents – presumably at a more accommodating interest rate – and some parents may also be willing to act as a guarantor to help their children into their first home.
Do Your Research
You need to be realistic in your visions for what property you can afford. Your dream home may have to wait a few years, and your first property is a great way of making that achievable. Assess the market to enable you to make informed offers for properties, but also look at different, cheaper areas and varying house sizes to work out what you can afford. Unfortunately, this might require some patience and an element of compromise, but in the long term, it will be worth it.
This is not for everyone, but if your circumstances allow, you could consider joining the property market with your partner, sibling or friends. There are trust issues and financial implications, naturally, but formal legal agreements can take care of all that, and many mortgage lenders are happy to offer products to joint owners as more than one income reduces the risk for them and adds more security.
Now is the time to start following the news a bit more and actually paying attention to the budget. The property market is hard to predict, but certain circumstances affect interest rates or a lender’s confidence, and hence can influence when it is the right time to enter the market. Being patient and showing restraint for even just six months can pay dividends with lower interest rates, lower house prices and more generous mortgage products.
When it comes to buying your first property, talk to Ison Harrison Solicitors; the Leeds Law Firm.
About the Author
David Bancroft is a Partner and Head of Residential Property at Ison Harrison Solicitors.
With 15 years’ experience in residential conveyancing, David heads up a large team of property legal experts in Leeds city centre. Get in touch with David and the team by calling 0113 284 5000 or email firstname.lastname@example.org.
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