Getting onto the property ladder in the UK has become a struggle for many first-time buyers, especially if you are looking for a home in London. According to figures provided by Zoopla, the average price of a London property is now £616,000. However, it is possible to secure your first home in London, with these suggestions:

1. Consider whether family members would be willing to help you secure your own home. This could be done by agreeing to be a guarantor for your mortgage. The guarantor typically agrees to offset some of the risk for the lender, by becoming liable for the loan until you have reduced the debt, usually to around 80%. However, if you are unable to meet the repayments, the guarantor will become liable.

2. A property ISA is an alternative method for saving for a home. You can invest anything from £100 upwards in properties located in regional capitals of the UK, including London. The money is invested in properties that are let out. Rental income and increases in property values generate the returns, and is tax free as it is in the form of an ISA.

3. You may want to consider pooling together finances with friends, and buying a property together. Up to four people could become joint owners of a property, although there are some risks attached to this. Financial and legal advice is crucial if you decide that this option is for you.

4. Shared ownership is another option, with fewer risks involved. If you live in London and have income of less than £90,000, you may be eligible for shared ownership, where you can purchase between 25% and 75% of a property. The relevant housing association owns the remaining share.

Before considering any of the options for purchasing a London property, consult a CeMAP qualified mortgage advisor to decide your best option.

One Response

  1. As a mortgage adviser, FTBs are becoming a smaller portion of my business compared to remortgages and B2Ls.
    The hardest part of obtaining a mortgage for first time buyers in modern times is the raising a deposit, as most lenders will not consider applicants with less than a 10% deposit. This article details many of the solutions that I often recommend to clients. Shared ownership can seem very appealing to people struggling to find the funds, however while it may seem attractive at first, this will always be a more expensive option in the long run, as you will have to pay rent on the portion of the property you don’t own, as well as mortgage payments on the part you do.

    As this article shows however, there is usually some route that can be taken and often people may be surprised by their mortgage prospects. It’s always worth speaking to a broker, may of them don’t charge fees these days, and can potential provide avenues you may never ave considered. I’m always happy to discuss people options with them if they are finding things difficult.

Leave a Reply

Your email address will not be published. Required fields are marked *