Getting onto the UK Property Ladder – What are your Best Options?

The property market in the UK is currently very difficult for first-time buyers, for a variety of reasons. If you’re determined to get your foot on that all-important first rung of the ladder, however, there’s no reason to give up hope: you have a few options available to you.

Why is it difficult?

The UK is currently embroiled in an economic malaise. The rate of inflation is higher than many predicted, and has been for the better part of a year. To combat this, the Bank of England recently increased the base rate of interest to 4.5%, which is the highest it’s been since the global financial crisis of 2008. As a consequence, would-be homebuyers – already facing sky-high living costs – are now finding it difficult to secure affordable finance.

So, what’s to be done?

Newbuild developments

If you’re willing to move into a new build, then you might find that there are special schemes available to help you out. You’ll typically need to reserve the home in advance, which means that you’ll be buying it before it’s built. Moreover, the value of your home might dip compared to some of the options elsewhere. With that said, if you like the look of a new home development, then this is an avenue worth exploring.

Personal finances

If your finances are in good shape, then you’ll be in a much better position to put money aside every month. Prioritise your work, and deprioritise frivolous spending. If you have any outstanding debt, then pay it down, starting with the high-interest debt.

The reality is that many of the people who succeed here also get help from their family – so, if that’s feasible, and your pride allows for it, make sure that you ask the question. Just a few thousand here or there might help you to put that deposit together, and improve your loan-to-value ratio.

Lifetime ISAs

For those between 18 and 39, a lifetime ISA might offer a cost-effective way to save. If you’re able to put aside £4,000 every year, the government will top up an extra £1,000 – or 25% of however much you are able to put aside. You can only draw the money out when you’re sixty, terminally ill, or (and this is the crucial part) if you’re buying your first home.

Help to Buy ISAs

The lifetime ISA came about as a replacement for this kind of ISA, designed explicitly to get people onto the property ladder. If you already have this kind of ISA taken out, then you’ll be able to get £3,000 from the government if you’ve managed to save £12,000. So, it’s slightly more generous than its successor.