Escaping Generation Rent- How Do You Get Your Foot On The Property Ladder?
The term “Generation Rent” has been used to refer to the recent boom in (mostly) younger people who are finding it difficult to raise money to get their first property. However, while it is true that it is more difficult than in previous generations to secure a property it is not as hard as some people may think and here are some tips to help first time buyers get their first initial step onto the property ladder.
Save as soon as possible
Budgeting and learning how to manage your money is something that is vital and should be done as soon as you leave home to go to university. It may not seem much but saving bit by bit can make a difference.
If you are applying for a mortgage proof of income can make a big difference. Whatever work you do (even if it’s a part time job) proof of income can be crucial when applying for financing.
Look into potential sources of funding
There are numerous methods of possible sources of funding to help you secure your first property. One of the most well-known is the government’s “Help To Buy” ISA- in simple terms if you put aside £200 for a home the government will add £50 in addition (up to £3000).
Another alternative is the House to Buy Loan-this is a 5-year interest free loan worth 20% of a new build home (or 40% in London).
Of course, friends and family may be able to help as well and it always worth discussing a potential purchase with them.
Rent to own
One option you may not have necessarily considered is rent to own. The tenant pays their rent and an additional deposit payment. Over time that deposit can eventually be used in order to purchase the property. This option doesn’t need to be exercised straight away- this could be 5 or in some cases up to 10 years after you leave the property.
General purchase tips
While sourcing the financing for a property is important you also need to be wary of what is available and whether or not it is appropriate to your needs. Always make sure you get a viewing and do your research in the area as much as possible.
This is especially important when it comes to the price- knowing what people are paying for other properties in the local area will make it easier to gauge whether or not the asking price is consistent with the local market rate. If the price is considerably below the local market rate then you need to ask why that might be- any savings you make on the initial price could potentially be offset by the amount of work that may have to be done in order to make the property liveable.
We can help
Purchasing your first property can be very daunting. In some cases, you may or may not know whether it is viable to buy one. To find out more or to get in touch with our team please contact the team at Larcomes Financial Services now and we will be happy to discuss your needs in more detail.