ASPIRING first-time buyers need to overcome sky-high house prices and tough mortgage rules to get on the ladder.
Would-be homeowners are usually faced with the daunting task of saving tens of thousands of pounds for a deposit.
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And this is especially difficult if you’re battling with increased rents and the rising cost living.
Higher interest rates mean lenders have also cut the amounts they are willing to lend through mortgages.
The obstacles has pushed up the age of average first-time buyers to 32, from 30-years-old just ten years ago, according to data from Halifax.
But it’s not all doom and gloom.
Here we explain some of the ways you can fast-track your dream of owning a home.
Consider a different area
Broadening the area where you are willing to buy could help you on to the ladder sooner.
Halifax data showed the average cash deposit from first-time buyers in the north east is £32,920.
On the other hand, those in the south east are looking at saving three times more at £97,320.
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However, you don’t need to radically change your focus area.
Average property costs can shift significantly within just a couple of miles.
And lower house prices mean you can save the smaller deposit needed, faster.
So, if you are finding it difficult to afford a home, one option is to try looking at different neighbourhoods.
On the downside, it can be difficult to let go if you had your heart set on a certain area.
And it could mean compromising on access to better transport links or amenities which often push up house prices.
Rhys Schofield, mortgage adviser at Peak Mortgages, said: “It’s important to be realistic about budget, area and what you need.
“For example, if you are searching for homes close to good schools, but not planning to have children any time soon, you could take longer to buy.
“Remember, you are buying your first home and not a forever home.
“Once you are on the ladder you can always plot your next move into a different area.”
Buy a smaller home
Higher mortgage rates mean lenders have reigned in how much they will offer borrowers – and buyers will have to save a larger deposit to cover the shortfall for a pricier property.
But rather than delaying purchases, opting for a smaller – and cheaper – home can see you become an owner faster.
Settling for a one or two-bedroom flat over a three-bedroom house could be the key to getting a home of our own.
Aneisha Beveridge, head of research at estate agent Hamptons, said: “First-time buyers are still feeling the pinch from higher rates.
“But rather than delaying their purchase, they’re reducing their budgets and consequently buying smaller homes.”
The firm found that first-time buyers in 2023 are now buying on average the smallest size properties since 2010.
This can be a great way to get the keys to your own place.
But it’s important to make sure that you won’t outgrow your home before you are ready to move.
Consider if the size will still suit your needs in two or three years’ time. If you are planning to row your family, for example, settling for a smaller home might not be the best idea.
Cut down on your borrowing
Mortgage lenders work out how much you can borrow based on your income and outgoings.
The more expenses you have each month, the less banks will be willing to lend.
Cutting down on any bills could have a major impact on how much you can borrow.
This could be the difference between buying a home sooner rather than later.
Mortgage adviser Rhys Schofield said: “People always forget about buy now pay later and catalogue accounts.
“If you have debts here, it will reduce the amount you can borrow.
“Car finance also has an impact on affordability with a lender.
“Phone contracts are another big one and app subscriptions too.
“It might not seem like much in isolation. But tot it all up and you could be freeing up hundreds of pounds a month.”
Sit down and make a budget of where you can cut down costs so that you might be able to borrow more with your lender.
A car and phone are essential items for many. But swapping to more modest models that cost less each month may be an option.
Of course, It’s important not to overstretch yourself. Taking out a bigger mortgage means bigger repayments each month and you need to be comfortable with the commitment.
And if your outgoings are already as low as you can make them, you won’t see a significant difference in how much you can borrow.
Increase your mortgage term
Taking a mortgage over a longer term is an option for most younger people.
It means that you pay back the debt over a longer term of say 30 or even 40 years, as oppose to 25, which used to be the norm.
The result is that monthly mortgage repayments are lower, and you can usually borrow a little more.
This could be an alternative or additional way to bump up the amount you can borrow to help fast-track you into ownership.
But as mentioned above it’s important not to take on extra debt lightly.
And crucially, the longer you take to pay off debt by stretching the loan term, the more interest you will pay on the sum.
Scott Taylor-Barr, adviser at Carl Summers Financial Services, said: “The idea is to have the shortest term that gives you a comfortable repayment.
“There is no point in having a short mortgage term and then only being able to afford beans on toast for the next five-years.”
Speak to family
Many first-time buyers are gifted money for a deposit from parents or family members.
However, there are more ways that family can help you get on the ladder than simply handing over cash.
And it could be the difference between you buying a property or not.
For example, buyers can get a mortgage without saving up a deposit with Barclays Family Springboard Mortgage.
The deal requires a family member or friend to put savings worth 10% of the purchase price into the deal.
But the money is returned after five years as long as the mortgage payments are kept up.
With other deals, family members can use their income to help boost your borrowing power.
Aaron Forster, director at Create Finance, said: “Joint borrower/sole proprietor mortgages enhances the amount you can borrow as it can take up to another three incomes into consideration.
“However, there are additional legal costs involved.”
Buying a home with the help of family or friends requires a large amount of trust. And things could go very sour if there are misunderstandings.
Make sure you have clear and frank conversations about all potential outcomes.
For example, make a plan that everyone agrees to over what would happen if you were not able to meet mortgage repayments.
Government schemes
There are a raft first-time buyer schemes the boost they need to become an owner.
A good mortgage broker can talk you through all the options available – some you may never have heard of.
For example, Shared Ownership allows people to buy a slice of a home and pay rent to a landlord on the rest.
Buying a share of a property is an easier way to buy than buying an entire property.
And you can increase your share when you can afford to.
But you must show you can manage rent and mortgage repayments on the owned share.
And for some of these schemes you will need to have a job or other links to the area where you want to buy.
The First Homes scheme is another one that can help with a discount of up to 50 per cent off the cost of a property.
The discount stays with the property for life and you will need to save a deposit of at least five per cent.
The scheme is a little allusive and you will need to look for local builders advertising and apply through them.
