House prices are continuing to increase, despite a clear message from the government that the exclusion of the most recent generation from the property market is unacceptable: owning a home is still almost unmanageable for much of the population. But don’t give up hope. For those of us who are determined to break their way onto the property ladder, there are some paths that are easier than others. Here are a few of them to get you started.
Help to Buy ISA
Exclusively for first time home buyers who want to buy a property for up to £250,000, this government scheme will gift you with 25% of the value of your existing savings, up to £3000. It can be used in conjunction with the equity loan scheme below, as well as with a mortgage guarantee. You apply to a list of banks who provide the facility, and pay money into the ISA every month in order to get the pay-out when you apply for your mortgage.
Help to Buy equity loan
This government scheme allows you to borrow money to put down a deposit on a home purchase, at a much lower interest rate than normal that makes the commitment much more manageable for people who don’t earn a lot of money. There are some criteria for the scheme: the house must be anew build worth les that £600,000 and not be purchased with a view to rent it out. The government will lend you up to 20% of the value of the property (this rises to 40% in London) providing that you can put down a 5% deposit on the loan.
Shared ownership
This is an arrangement with a housing association what allows you to part own a property with them, and to pay rent on the rest. You must have a combined household income of less than £80,000; be aware that the arrangement is always leasehold. You can also buy more of your home as time goes on, although the price may not be the same as at the time of the original process, as its subject to the fluctuations in house prices in the area.
Combine forces
Even if you’re not in a couple, you may want to consider teaming up with a friend or relative in order to make the first step onto the poetry ladder more affordable. Just make sure that you make the terms of the arrangement clear and sign a legally binding contract, however much you know and trust them, to avoid future complications.
