Stepping onto the property ladder is a dream that most of us hope for but many feel is out of reach. Over the years house prices have increased, as well as the cost of living making it a real mission to be in a position to buy property. This is especially so in certain areas such as the Cotswolds, where rural house prices are around 19 times higher than average earnings, averaging at around £345,000.
It is easy to feel deterred; however hope is not all lost. Despite the average deposit increases to £32,000 last year, the amount of first-time buyers actually increased by 7%! There are many schemes and offers out there to assist people in getting on the property ladder and into the house market, as well as simple savings that can make this dream a reality.
Make your savings work for you
There are many options out there for savings, but some offer better rates than others, so it is definitely worth doing your homework. Re-evaluate how hard your savings are working for you; check your interest rates and if there are better savings accounts available elsewhere then it may be worth moving your money. Also, look into the Help to Buy ISA.
What is your credit score
Applying for credit cards at the time that you are going to be applying for a mortgage is a big no, no. Lenders will check your credit rating when you apply for a mortgage, so any debt, borrowings and late payments will be visible and could impact the decision of your lender. Ensuring that your credit rating score is in a good place is essential before even applying for a mortgage. You may have old accounts that you have forgotten about, different addresses. Contact Equifax, Experian or Callcredit to check your rating.
What can you afford?
It is important to have realistic expectations on what you can afford when looking at stepping on to or moving up the property ladder. Visit our Mortgage Calculator that allows you to put in your mortgage value, interest rate and number of years to repay, to give you the monthly cost of your mortgage. Most providers have fairly sophisticated means of assessing affordability but, generally a good guide may be up to four and a half times your annual income. So, it is important to have a good idea of what you can afford before you begin your search.
Factor in the additional costs involved
As well as the monthly mortgage costs, there is of course additional expenditure involved in purchasing and owning a property. You may have saved a good deposit but it is important to consider stamp duty, valuation & surveyor fees, legal fees, estate agent’s fees and removal costs. If you successfully purchase a property, you need to consider your monthly outgoings such as gas, electric, water rates, maintenance and council tax.
There are a number of schemes created with the intention of making it easier for many buyers to get into the housing market and own their own property. The Government’s Help to Buy Scheme, Forces Help to Buy Scheme and other offers that have been created with new-build housing developments can be enough to allow you to make your dream a reality and own your own property. Take a look to see if you are eligible. There are often other incentives such as no stamp duty or additional features added to new builds for no cost.
One thing is for sure, the property market is vast and there is much to consider and to be aware of if you are venturing into this arena. Our team of professional and knowledgeable financial advisors are trained to help you in these areas, so if you would like some advice or more information please contact us on 01608 651602 or via our enquiry form.