With the cost of living increasing and the property market becoming more competitive, it can feel like getting on the property ladder is a distant dream.
However, buying property is a great way to have some financial security – it offers you a solid investment that can grow in value over time. It also offers you something you can rent, sell for profit, or even keep as an inheritance for a family member or child.
There are a few ways to start taking your finances into your control to afford a property. In this article, we’ll give you five ways to get on the property ladder, so you can confidently start your journey into home ownership.
1 – Consider Buy To Let Properties
The main reason a lot of people choose to invest in property is so they can let it out. If you’re not desperate to live in the property yourself, this can be a great way to pay your mortgage, as you’ll receive monthly rent payments from your tenants.
It’s important to consider that becoming a landlord involves a series of new taxes and can require much accounting. For first-time landlords, it’s best to have a dedicated landlord accountant on your side to handle the legal intricacies that you might not be aware of.
It’s also important to note that becoming a landlord requires you to build a positive relationship with your tenants – you’ll need to make sure that you’re on hand to help with maintenance and pay for repairs if something goes wrong with the house, isn’t their fault. Before becoming a landlord, consider if this is something you’ll have time for on top of your work or other responsibilities.
2 – Save As Soon As You Can
You may have heard the phrase “a little goes a long way”, which remains true regarding getting on the property ladder. Adding a percentage of your monthly salary to a savings account or ISA bond can help you save up for your down payment.
The average age for first-time UK home buyers is 32 years old, so it’s recommended that you start saving during your twenties to be able to afford a home by this age. While savings may not stretch to a full down payment (especially if you have rent to pay in the meantime!), they can help you cover a percentage of it or help you repay a loan.
3 – Speak To A Mortgage Advisor
A mortgage is one of the biggest investments a person will make in their lifetime.
It’s not always easy to think about the scope of a mortgage when you’re paying it back in increments. However, understanding the full extent of your mortgage and knowing you have a steady stream of income to pay it back is vital to keeping your property investment.
A mortgage advisor can help you understand how exactly you will pay off your mortgage and how long it may take you to do this. Though there may be an upfront cost for your advisor appointment, it will be worth it to understand the life-changing investment you’re planning to make.
4 – Be Clever With Your Investment
When you’re looking to buy property for the first time, it can be easy to imagine your dream house in a perfect neighborhood. However, you must consider your first home as an investment and broaden your search.
Often, you will find much cheaper properties that need a bit of work or aren’t in the ‘best’ parts of town. It would help if you didn’t count these out when it comes to investing in property, as many areas now regarded as some of the best to live in started as undesirable places.
Look to the future when investing, not to the past. Sometimes you can find hidden treasures where you least expect them.
5 – Take Out A Loan
Getting a loan can seem like a big decision, but it’s very common for people to ask their bank for help getting on the property ladder. First-time buyers can often get a lower interest rate through specialist schemes to help them afford the down payment on their first home.
You must, however, be very careful when getting a loan. Only take a loan from a well-reviewed source or a source you trust, such as your bank. Some lesser-known companies will charge you huge interest rates, making it incredibly difficult to pay back what you owe.
Always read the disclaimers and fine print to ensure you’re not missing any hidden clauses. And always ensure that you have enough income to make your repayments on time – loans are a great way for some people to get a little extra influx for a downpayment, but you must be realistic about what you can afford and how you’ll pay it back.
Ready To Buy?
We hope you find these five ways to get on the property ladder useful in your home-buying journey. Remember to take it slow, never rush into anything, and consider everything before you take the plunge!