Buying your first home is a huge step. It’s exciting, but it can also be stressful. You’re dealing with big decisions, loads of paperwork, and a lot of money. But don’t worry – you’re not alone. Plenty of first-time buyers have been through it, and there are a few tried-and-tested strategies to help you get on the property ladder without losing your mind.
This guide breaks down some of the best tips and tricks for first-time buyers. Whether you’re struggling to save, finding it tough to get a mortgage, or just trying to decide where to buy, this is for you.
Set Clear Savings Goals
Before you even start looking at properties, you need to know how much you can afford. That means working out how much you need for a deposit and making a savings plan.
- Know Your Target: Most lenders ask for a deposit of at least 5% to 10% of the property price. If you’re buying a £200,000 home, that’s £10,000 to £20,000.
- Save Automatically: Set up a direct debit so that a set amount goes straight into your savings account every month. It’s easier to save when you don’t have to think about it.
- Use a Lifetime ISA (LISA): If you’re aged 18-39, a LISA can be a great way to save. You can put in up to £4,000 a year, and the government will add a 25% bonus. But remember, it’s only for your first home or retirement.
Make It Work for You
You might find it tough to save a big chunk of your income, but even small amounts can add up over time. Review your spending and look for places to cut back – even swapping a takeaway for a home-cooked meal once a week can make a difference.
Understand Your Mortgage Options
There are loads of different mortgage products out there, so take your time to understand what’s available.
- Fixed-Rate Mortgages: Your interest rate stays the same for a set period, usually two, three, or five years. This means your monthly payments won’t change, which can help with budgeting.
- Variable-Rate Mortgages: Your interest rate can go up or down, depending on the lender’s standard rate or the Bank of England base rate.
- Income Booster Mortgages: If you’re struggling to borrow enough on your own, some lenders let you add a family member’s income to your application, even if they won’t be living with you.
Speak to a Mortgage Broker
Even if you’re just starting out, talking to a broker can be a good idea. They’ll help you understand how much you can borrow, what rates you’re likely to get, and which lenders are best for you.
Get Help Where You Can
There are a few government schemes designed to help first-time buyers, so make sure you know what’s out there.
- Shared Ownership: You buy a share of a property (usually between 25% and 75%) and pay rent on the rest. It’s a good option if you can’t afford to buy outright.
- Help to Buy (Now Replaced by Lifetime ISA): This scheme topped up your savings by 25%. It’s no longer available for new accounts, but if you already have one, you can still use it.
- Income Booster Mortgages: Some lenders let you add a family member’s income to your mortgage application to increase how much you can borrow.
Don’t Overlook Family Support
If you’re lucky enough to have family who can help, whether through a loan or by acting as a guarantor, that can make a big difference. But make sure everyone understands the risks involved.
Choose the Right Location
Where you buy matters as much as what you buy. And for many first-time buyers, it’s a choice between location and property size.
- Look for Affordable Areas: You might need to consider moving to a cheaper town or city to get more for your money.
- Check Transport Links: If you’re moving further out, make sure you can still get to work easily.
- Research the Neighbourhood: Look at crime rates, school ratings, and local amenities. Try visiting at different times of day to get a feel for the area.
Be Open to Compromise
You might not get your dream home straight away, but getting on the ladder is what counts. You can always sell and move again later.
Consider a Fixer-Upper
Buying a property that needs some work can be a great way to save money. If you’re handy or willing to learn, you can add value to your home without spending a fortune.
- Look for Cosmetic Projects: Properties that just need fresh paint or new flooring are less risky than those with structural issues.
- Get a Full Survey: Make sure you know exactly what you’re getting into. Structural problems can be expensive to fix.
- Budget for Renovations: Even small changes can add up, so plan your spending carefully.
Work at Your Own Pace
There’s no rush to do everything at once. Take your time, and remember that you can tackle one room at a time.
Don’t Be Afraid to Negotiate
Buying a property is a big deal, and there’s often room to negotiate on the price.
- Do Your Research: Look at how much similar properties in the area have sold for recently.
- Start Low: Make an offer below the asking price – the worst that can happen is the seller says no.
- Be Polite but Firm: If the property has been on the market for a while, you might have more room to negotiate.
Know When to Walk Away
If the seller won’t budge and the price is too high for you, don’t be afraid to keep looking. There will always be other properties.
Plan for Ongoing Costs
It’s easy to focus on saving for a deposit and forget about the other costs that come with buying a home.
- Stamp Duty: First-time buyers don’t pay stamp duty on the first £300,000 of a property worth up to £500,000.
- Legal Fees: You’ll need a solicitor or conveyancer to handle the paperwork.
- Surveys and Valuations: A survey will check the property’s condition, while a valuation is for your mortgage lender.
- Moving Costs: From hiring a removals company to buying new furniture, the costs can add up.
Set Aside an Emergency Fund
Even once you’re in your new home, things can go wrong. A broken boiler or a leaking roof can be expensive to fix, so make sure you’ve got a bit of money set aside.
Think Long-Term
When you’re buying your first home, it’s easy to get caught up in the excitement. But it’s worth thinking about your long-term plans.
- Will the property still suit you in five years?
- Could you afford to keep it if your circumstances changed?
- Would it be easy to sell if you needed to move?
Keep Your Options Open
Even if this isn’t your forever home, make sure it’s somewhere you could comfortably live for a few years.
Get Professional Advice
Don’t be afraid to ask for help. A mortgage broker can find you the best deals, while a solicitor will make sure all the legal work is done properly.
- Use a Broker: They have access to deals you might not find on your own.
- Hire a Good Solicitor: They’ll handle the legal side of things and make sure the sale goes smoothly.
- Consider Financial Advice: If you’re not sure how much you can afford or how best to save, a financial adviser can help.
Stay Positive
Buying your first home can be a rollercoaster. There will be ups and downs, but don’t get discouraged. Take your time, do your research, and remember that every step you take is bringing you closer to owning your own home.
