There is little doubt that the current generation of would-be house buyers are finding it much harder to even get on the first rung of the housing ladder let alone work their way up it.
Some places are more affordable than others when it comes to housing and there are definitely some ways that can help you to plan ahead and achieve that goal of owning your own home.
Here is a look at how you can work out the best way to become a property owner and what incentives and ideas you might want to look at in order to set you on your way.
Saving the deposit
Mortgage lending criteria has tightened and this has often meant that saving the deposit you need has become harder or takes a bit longer than before.
You can actually get a mortgage with just a 5% deposit but the more you can put down in cash towards your new home, the more affordable it will become in terms of mortgage payments and having a bigger deposit will often unlock a better finance deal in the first place.
Your aim should be to save the deposit you need within a one to five year timeframe, depending on your available salary and existing financial commitments.
Budgeting is important
There is no question that many first-time buyers do find the first few years of ownership quite a financial challenge, which is why working out a budget beforehand is so important.
Most mortgage lenders do now conduct affordability tests as part of the tighter lending rules, so make sure you know exactly how much you currently spend each month and do your own stress-test to see what effect a rise in interest rates would have when working out how much you can afford to pay each month.
Calculating how much of your salary you can commit to a mortgage will help to ensure you do not borrow more than you can afford even if the lender does offer you a higher sum than you expected.
Getting the right finance deal
It is very advisable to research all of your mortgage options so that you can find out which particular deals are available to you and so that you know how much you can borrow before you start searching for a property to buy.
You can deal directly with a lender or through a mortgage broker to discuss your options and ask to get a mortgage in principle. This means that your acceptability for a mortgage has been pre-qualified and having a mortgage agreed in principle will give you a much stronger position when you are making an offer on a property.
Finding a property and making an offer
You may already have an idea of the type of house and location that you want and once you have a mortgage agreed, you have a clear idea of what your budget is, which will help to narrow down the search options to a manageable level.
Almost every property that is for sale now, has to have had a home report completed by the seller. You can learn more at hdg.co.uk about what information is contained in a report, but you should ask for a copy of this information once you have confirmed that you may be interested in buying that particular property.
A bit of negotiation on the sale price is often expected by the seller and this is often factored into the initial asking price. When considering making an offer, make sure you put forward your suggested purchase price based on the information and valuation contained in the home report as well as basing it on local market conditions.
A well-researched and reasoned offer based on certain facts and figures that you can justify, is more likely to be considered than a figure that is seemingly designed to try and get the property at a lower than acceptable asking price.
Completing the purchase
Ensure that you take professional guidance from a solicitor or qualified conveyancer and be sure to understand all of the legal implications of making an offer and also be ready to advise your lender that you have found a house to buy, so that they are in a position to send the funds within the timeframe agreed.
Buying your first home is an exciting time but it can also be challenging at times, but by following some of these tips and being prepared financially for what lies ahead, you could soon be taking your first step on the property ladder.
Josh Henderson is always on the lookout for real estate news. A property investor of several years, he likes to share his experiences online. You can read his articles on various property investment blogs.
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