It’s not as if the desire to own a property is not there. In fact, 49% of 18-34 year-olds surveyed said that homeownership is now more important to them as a result of the pandemic.*
(Source: *Santander, Life after lockdown, June ‘21)
Raising the Deposit
52% of this age group also set out that the deposit was their biggest hurdle.*
However, Government intervention with the Mortgage Guarantee Scheme has helped bring about more products (across the board) that only require a 5% deposit. Others may be able to benefit from the Bank of Mum & Dad (plus Grandparents) to help deliver the deposit.
Rising House Prices
The demand for more space afforded by larger properties has helped drive up prices. So, you may find that if you’re after a smaller home, it might be more achievable than you first thought to get a foothold on the property ladder.
Additionally, there’s the Government’s First Homes Scheme for new-build properties (in England, although other initiatives may exist elsewhere in the UK). For eligible purchases, it’s designed to provide homes at a minimum discount of 30% against the market value, resulting in both a smaller deposit and mortgage loan. However, the discount off the price remains with the property when you sell it on.
Type of Mortgage you opt for
Another way of reducing the monthly mortgage payments is to take out a mortgage over a longer term, such as paying back over 35 years. Although, this means that you will be paying more money back, if extending the payback period.
However, over your lifetime of property ownership, you’re not committed to stay with the same deal – with homeowners often having a number of different mortgage deals across the years.
The process can be confusing and that’s why around nine out of ten First-Time Buyers are likely to use an Adviser.
(Source: Accord Mortgages, July 2021)
Your home may be repossessed if you do not keep up repayments on your mortgage.
