How can I get on the property ladder? Top tips to afford your first home

If you're asking yourself, how can I get on the property ladder? You're not alone. The thought of buying a property, and how you'll finance it, can be a daunting prospect.

But before you do anything else, speak to a mortgage broker. A good broker will be able to properly assess your affordability, talk you through all the costs associated with buying and owning a home, and help you understand all the options open to you. 

Often, after speaking with a broker such as our sister company Mortgage Scout, buyers find they can either afford to borrow more than they thought, or that the monthly costs aren’t going to be as high as they feared. And this advice should be free to you until you take out the mortgage too, so it's always the best first step.

Then, here are 5 top tips in general to help you afford your first home and get on the property ladder:

1. Think of ways you can generate additional income

The deposit is usually the biggest stumbling block for first-time buyers, so look at ways you could save or make some extra money. For example:

• Could you get a part-time job in a bar or restaurant?
• If you go to the gym regularly, is there an evening or weekend job there that would pay you and give you free membership?
• Have a clear-out of your wardrobe and cupboards and sell some of your things on eBay, Vinted, Facebook Marketplace, or Depop
• Are you creative? Could you make anything in your spare time that could be sold somewhere like Etsy?
• Instead of buying drinks and sandwiches during your work day, take them in from home and set aside the money you save – you’ll be amazed how it can add up!

2. Invest in a Lifetime ISA

If you’re aged between 18 and 40, you can put up to £4,000 into a Lifetime ISA each tax year and the Government will pay a 25% bonus monthly, up to a maximum of £1,000 a year. So, if you need £15,000 for a deposit and can afford to save £4,000 a year, you’ll have the funds in three years instead of nearly four and can get on the property ladder quicker!

3. Buy with someone else or go for a Shared Ownership scheme

You may want a home that’s entirely yours, but splitting the ownership can get you on the property ladder – and it doesn’t have to be for ever! Buying with a good friend or relative can make the deposit and mortgage payments much more affordable, just make sure you understand your legal and financial obligations.

And if you buy via Shared Ownership, where you own part of the property and pay rent on the other part, you can choose a scheme that gives you the ability to buy more shares over time (known as ‘staircasing’) until you own the whole thing. If this sounds like something you’d like to know more about, our sister company SOWN specialises solely in shared ownership properties.

4. Have a guarantor for the mortgage

If you are confident about the amount you can afford to pay each month, but for some reason that isn’t reflected in what lenders are prepared to offer, you could look at having a guarantor. This is often a parent who owns their home outright or with a high level of equity, and they essentially agree to make the mortgage payment if you default.

Some guarantor mortgages even allow you to use the guarantor’s equity (or other collateral) in place of a deposit, meaning you can borrow 100% of the value of the property you’re buying.

If this is something you think may be an option, it’s important to discuss it with a mortgage broker, who can explain all the implications to both you and your guarantor.

5. Negotiate

First-time buyers are chain-free, which can be a huge benefit to a seller if they are also keen to get into their next home – or if they need to sell quickly for any other reason – and yet so many first-time buyers don’t negotiate.

When people’s time pressure is greater than their financial pressure, they will often be prepared to accept an offer below the asking price. The important thing is that you have everything ‘ready to go’ from your end: a mortgage agreement in principle from a lender, deposit funds in place and a solicitor or conveyancer instructed. Present yourself as someone who can complete the transaction in good time, make sure the offer you put forward is reasonable and fair, and you might be surprised what you can get if you ask!

For help finding and financing a property, do pop in or contact your local branch as we’d love to find a way to get you on the property ladder!