Can I Afford to Buy My Own Home?
Home ownership is an aspiration for most people, but sadly in 2024 the considerable challengers for first-time buyers mean that home ownership is declining.
Is This Doable for Most People?
Many who aspire to own their homes will be asking themselves if they can afford to buy their first home when previous generations took this as given.
How Much Money Is Needed?
Most mortgage lenders expect buyers to have saved at least at least 5%. The amount you will need to save will be dependent on the cost of property you want to buy. If the average price for a home for first-time buyers in 2022 is £302,00, then a 5% deposit will be £15,100, but you should view properties in the area you want to buy now to get an idea of the type and price of home that you are aiming for.
Is There Any Help?
Luckily, the government has several schemes that can help give first-time buyers a leg-up. As well as measures like Lifetime Individual Savings Accounts that will help people save for a deposit, the government has also announced the First Homes Scheme, which will allow first-time buyers in England (not the rest of the UK) to buy certain houses with either a 50% or 30% discount on their market value. Though it’s worth bearing in mind that the home cannot cost more than £425,000 in London or £250,000 elsewhere in England after the discount has been applied.
Legal ownership of such properties can be complicated, so it’s worth investing in advice from a good solicitor such as https://www.parachutelaw.co.uk/deed-of-trust to understand what your rights are and if something like a declaration of trust will be put in place.
100% mortgages do exist but come with risks. You must have a good record of paying rent for at least 12 months and be over 21 years old. However, not having any deposit at all comes with risks – mainly that if the value of your property falls, you will have no buffer against negative equity when the value of your property falls below the amount mortgaged.
