The housing market is cooling as the cost-of-living crisis bites and families find it tougher to save, and rising interest rates are pushing up monthly mortgage costs for borrowers. Yet, for beleaguered young people trying to get on the first rung of the property ladder, this momentary lapse in market growth is still unlikely to help as house prices are still at historic highs.
Whether you’re one of these first-time buyers or know someone who is trying to get their first property, there are thankfully things that can help. Read on to learn how young people can beat the economic headwinds and secure their first property in 2023.
Now, more than ever, first-time buyers are relying on help from their families to get their homes. YouGov research found that between 2015 and 2019, 54% of first-time buyers received financial help from their parents when purchasing.
From help with the deposit to legal fees, older family members that have benefitted from decades of growth of their homes and investments are best placed to help their children get on the ladder, so if you’re a parent, consider helping out. If you want to be certain your money is being managed correctly, trusts solicitors can help you work out the best way to set aside money for them.
Buying with friends
Rather than moving in with a partner, many young people who cannot afford to purchase a home on their own are instead choosing to pool their money with friends and buy a house together.
This can be a good way for unattached young people to start building up equity as opposed to handing over thousands to landlords in rent each year. However, it’s important to enter into arrangements on an equal footing and be certain you live well together before you move in – a mortgage is a long-term financial commitment, after all, so make sure you have similar standards when it comes to cleaning, tidying, and so forth.
Shared ownership is a form of home ownership that allows buyers to purchase part of a property, whilst paying rent to a housing association on the percentage that they do not own. As such, this form of home ownership is a good option for people who want to buy but are unable to get together a large enough deposit to get a mortgage.
You can buy a greater share in the future in a process known as staircasing, and you’ll own the equity on your share, which will help you when purchasing your next home.
Have you got any tips for first time buyers on how to get into the property market? Let us know your hints and tricks below.
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