First-time buyers expert tips

Published: 02/06/2021 By Musgrove & Co

First-time buyers expert tips

Many people in the UK are hoping to become a first-time buyer and get on the property ladder.
ONS figures note that approximately two in five households are in private or social rented accommodations. Rising house prices mean that buying a property can feel like an intimidating process.

Nationwide said that prices increased 6.4 per cent in the last year. This means that the average UK house price is now £229,748. UK rents have also increased by 3.7 per cent over the past year, making it harder to save.
At present, most mortgage lenders ask for a minimum deposit of 10 per cent of the purchase price. This means that aspiring homeowners will need to come up with an approximate of £22,975.

See a few experts tips below to get you on the property market.

1) Plan ahead and save

First, create a timeline that will help you save for a deposit. This way you'll understand what steps you need to take to get there.
Then, set up a regular direct debit into a savings account each month. This will help you put money aside and you will be less tempted to spend the money on other things.

2) Use all the help available

If you're saving for your first home, look into getting help from the Government.

A Lifetime ISA, helps you save up to £4,000 each tax year. You can also receive a 25 per cent government bonus on top. If you pay in the maximum of £4,000 per year, the government will top it up with an additional £1,000.

There are two types of Lifetime ISA available, both offering the 25 per cent Government bonus. The only condition is that you must be under 40.
First-time buyers can also apply for a Help to Buy equity loan. This is a Government's loan that you put towards the cost of buying a newly-built home. Note that you must buy your home from a homebuilder registered for the Help to Buy equity loan.

The Stocks & Shares Lifetime ISA invests your savings in the stock market. This way your savings grow more than cash over time. The only down side is that this may be a long process as investments can go up or down.

3) Cut back on unnecessary expenditure

Have a look at your bank statements and see what outgoings or spendings you might be able to cut down.

You can consider reducing takeaways, avoiding that £3 daily cappuccino or changing energy supplier and decreasing your bills. You could also check your subscriptions and memberships. Are you using them all? Any extra cash can be put into your savings account instead.

The biggest expense for most first-time buyers is the cost of rent.

If you have a good relationship with your landlord, you can try explaining to them that you are trying to get on to the property ladder. They may offer to reduce by even the smaller amount or agree to not raise it. Even a £10 reduction per month means you can stick £120 towards your deposit for that year.

4) Get yourself mortgage-ready

Any outstanding loans? Try and pay these off before you apply for a mortgage. Avoid taking out any more loans.
Make sure you pay all your bills on time as this will prove you're reliable and financially independent.

A simple but very effective thing to do is to register on the electoral roll to vote where you live. This makes it easy for the lender to trace and confirm you as officially living at that address.

Also make sure you pay any bills registered to your current address.
Improve your credit score. It is a great way to increase the number of mortgage lenders who may offer you a mortgage.
One of the best ways to significantly amplify your credit score is to start using a credit card.

This shows that you're able to look after your own finances and pay off any outstanding debts within a reasonable time-frame.
Can I get on the property ladder without having a deposit?

There are a few specific mortgage products designed to help first-time buyers get on the property ladder without a deposit. However you will need friends or family able to help out.