Buying your First Home: What are the options?

Whether we like it or not here in the UK, there are far too many people and not enough accommodation for everyone, especially accommodation that is affordable.

So, the government are working on different schemes to help first time buyers to get on the housing ladder and stop paying astronomical rental prices. One scheme is the Help to Buy government scheme which lets buyers put down as little as 5% as a deposit on your first home.

More recently, the government have started to unfold their plans to build affordable housing across the country for 23-40 year olds who haven’t yet managed to buy their own homes. The plan with the Starter Homes is to build them to a value of say £250,000 and then knock 20% off the original value to make decent properties affordable to more people. There are obviously conditions – you have to stay in the property for five years before you can sell it for its true value, but this is an excellent option if the initiative starts popping up in your area.

Government schemes aside, the best thing you can do if you want to buy a house is start saving. You’ll need some guidance to look into how much of a deposit you need and budgeting solutions but there is plenty of help out there. There are loads of ways to save; some are creative and some just straightforward ‘tighten the purse strings’ ideas. You’ve also got to consider how much you can afford to repay each month on your mortgage. If it’s your first home you’ll have to estimate bills, council tax, and all of the other expenses that come with a house as well as your monthly mortgage.

If you have credit cards or any loans, now is the time to make sure that you’re extra sensible with your repayments to keep your credit rating happy. There are strict checks in place so your credit history will need to be squeaky clean.

If you’re extremely lucky, your parents might have suggested they help you with your first home. It’s not as simple as them getting a second mortgage if they want you to pay for everything else. The safest thing to do for both parties is to ‘gift’ the money to the desired recipient. Otherwise, if you miss a payment, the debt falls to your parents when it should actually be you.

There are many routes up the housing ladder these days for first time buyers and with a 7% increase on people buying their first homes in 2016, the future certainly looks more encouraging.

 

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