How to get on the Property Ladder

Taking your first step onto the property ladder can seem like a daunting prospect, especially considering that a typical deposit is usually between 10% and 20% of a property’s value.

We often get asked by first-time buyers: “How do I get on the property ladder” and we always tell them that it is achievable with some patience, hard work and dedication to make it a reality.

If you are a first time buyer, our useful tips on how to get on the property ladder could help you make your dreams a reality sooner than you think!

• Start Saving Early

The sooner you start saving, the sooner you’ll be able to get your foot on the ladder. And not only that, but the earlier you start saving, the more it will become a habit, meaning you’re less likely to take lump sums out of your account for impulse purchases.

A great way to maintain consistent savings is to set up a direct debit from your bank account to your savings account every month. Try to achieve a regular transfer of a specific amount each month on payday. That way, you won’t miss the money each month as you stash it away!

• Stay With Your Parents if you can

It can be tempting to move out and be independent at the very first opportunity, and of course, that’s not necessarily a bad thing.

However, if you’re serious about owning your own property, then forking out at least a few hundred pounds a month on rent is not the best idea. Those monthly payments could instead add up to a substantial deposit over time.

So if you’re still living at home then don’t be in too much of a hurry to leave, as staying with Mum and Dad could help you buy your own place much quicker.

• Make Sacrifices and Prioritise

Be sensible about how you spend your money. If buying a property is your focus, then you may need to make a few small sacrifices to reach your goal.

It could just be missing the odd night out, or not buying an expensive pair of trainers you’ve got your eye on. Any chance to save money is an opportunity to get a little closer to the first rung of the property ladder, so think twice before making any impulse purchases.

• Be Realistic and Flexible

It’s unlikely that your first property will be your dream home, or your forever home, and the location might not be your first choice either. However, if you’re serious about buying a property, there needs to be some room for compromise.

It might be that you choose a smaller property, for example, a one bed flat instead of two, or you find an ideal sized property but with a slightly longer commute than you’d like.

When it comes to your first property, the most important thing is just getting on the ladder.

• Speak to a Mortgage Advisor Before you View any Properties

When you’re in a position to put down a deposit, arrange meetings with a couple of mortgage advisors to find out exactly how much you can borrow.

Mortgage calculators on banking websites aren’t always an accurate indicator, and you may be able to borrow slightly more or less than you think. Therefore, it’s essential to know exactly what budget you have to work with so that you don’t view the perfect property, only to find that it’s out of your reach.

• Save Your Money Wisely

Keeping your savings in the right place can make a big difference to the time it takes to achieve your deposit.

It’s best not to keep your savings in your current account. Not only will you gain little or no interest, but you’ll be far more likely to dip into them when you fancy a treat.

Instead, consider opening a Lifetime ISA. These accounts allow you to earn a 25% annual bonus from the government up to a maximum of £1000.

So for every £1000 you save, you’ll receive a £250 top up until you reach the maximum savings amount of £4000 per year.

• Look into all Your Options

There are many different initiatives available to help first-time buyers get on the property ladder, and while some of them might not seem ideal solutions, they can help you get there more quickly.

Help to Buy is one example of a government-backed scheme that allows you to buy a property with just a 5% deposit, with the government lending you 20% interest free for five years.

Alternatively, you could look into shared ownership. This allows you to own a percentage of the property while paying rent on the other part.

Again, it’s worth speaking to a mortgage advisor first, who will go through all the options with you.

James Gorey Estate Agents are your local property experts for the South East London and North Kent area. We can also recommend mortgage experts to help you with your finances.

Call us on 020 3633 9866 or email info@jamesgorey.com to chat with a member of our friendly and experienced team.