Whatever your thoughts on the EU referendum, it appears as though house prices are set to decline in the coming years as a result of the outcome. For homeowners, it may not be the best news in the world. But for those who feel locked out of the property market, such news will probably provide a lot of encouragement.
Furthermore, the recent cut in interest rates is likely to make mortgages even more affordable, which will make the dream of homeownership an increasingly realistic one for existing renters. Nevertheless, despite the dice starting to fall in a slightly kinder manner, gaining a foothold on the property ladder is far from a foregone conclusion, so below is some advice to help you get there – regardless of where you live, or how much you earn.
Saving for a deposit
There are finer nuances to saving, but the principle which overpowers all the others is discipline. Whatever your monthly budget is in terms of incomings and outgoings, you need to find a way to ring fence a couple-hundred quid of it, and move it into a separate account. Aside from building up your savings rapidly, such self-control will also demonstrate to mortgage providers one day that you are a credible and diligent potential borrower, thus standing you in good stead to be approved at a good rate.
Get more for your savings
It’s one thing to save – it’s quite another to maximise what you get for it. The new Help-to-Buy ISA is one place to lock your savings away, and, if you play your cards right, could see you earn up to a £3,000 state-sponsored bonus. The incoming Lifetime ISA may be another option from next year, and similarly offers a bonus scheme for first-time buyers.
There are other different kinds of ISA available too which can offer a significant boost to the funds you put away in terms of interest. You just need to be conscious of the risks, and weigh up whether the rewards justify them or not.
Improve your credit score
When it comes to applying for a mortgage, your credit rating will be crucial in determining whether you are approved, and at what rate. Not many people are too au fait with how credit scores are calculated, but there are numerous steps you can take to improve it. Simple things like registering on the electoral roll, paying off your credit card balance each month, taking out a mobile phone contract and even ordering a copy of your credit file to check for errors can all make a big difference.
Consider a private deal
It may sound risqué; even desperate, but writing letters and putting them in post-boxes of homes you like may result in one landing with someone who is thinking of selling up. If you luck out, you may be able to do a private deal with them, and both of you can save plenty in agency fees.
Understand the true cost of buying
Most people think that covering the cost of a deposit means job done. Unfortunately, the costs don’t end there. There will be other fees for estate agents and solicitors, not to mention stamp duty, insurance and home improvements. And even once this is all paid, you should note that your financial exposure is ongoing. As a renter, you don’t need to give it much of a second thought when something like a boiler breaks down. However, it will be you who has to foot the bill for maintenance once you’re a homeowner. It’s all part of the deal, but, if you are adequately prepared financially, then it will no doubt be one of the happiest experiences of your life.