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.