Ways to buy a property without a deposit

April 4, 2016 by Brendan O'Neill

Advice & Tips

The traditional method of buying a home involves saving for a deposit and applying for a mortgage. However, as house prices continue to rise, first time buyers often struggle to save for the large deposit necessary. If saving a deposit is becoming difficult, consider other ways of getting on the property ladder.

Consider a shared ownership scheme, which involves you buying a smaller percentage of the property. You may buy a share between 25% and 75%, with a housing developer or local authority owning the remainder. You require a much lower deposit and need to borrow a much lower amount. However, you won’t own the whole of the property and will have to pay rent on the amount you don’t own.

You may be able to find a deal with a property developer, to buy a new home. A construction company will usually lend you the money for a deposit so that you can obtain a mortgage for the remainder of the money. You are expected to repay the deposit within a specified term, which may be 15 years or even 25 years if that is the length of your mortgage term. You would have to be sure of saving up the money owed over the term.

If you know someone who trusts you to make the repayments on a mortgage, you could ask them to be a guarantor. This will generally enable you to borrow slightly more and have a lower deposit. If you find that saving a deposit is becoming a struggle, consider seeking advice from a CeMAP qualified mortgage adviser.