The dream of owning your own home is one that many young people aspire to. Unfortunately, the cost of buying a property can be prohibitive, especially in today’s market. In this article, we will explore the various options young people have for getting onto the housing ladder. We will also look at the popular Help to Buy scheme run by the UK government. So whether you’re saving up for your first home or considering using help to buy, read on for more information!
The problems facing young people trying to get onto the housing ladder
The average price of a house in the UK is now over £250,000, and with wages remaining static, many people are finding it difficult to save for a deposit. In addition, mortgage lenders are often reluctant to lend to first-time buyers who may not have a track record of repayments. So what can young people do to get onto the housing ladder?
Saving for a deposit
If you’re saving for a deposit, there are a few things you can do to make your money go further. One option is to open a Help to Buy ISA. This is a special type of ISA that allows you to save up to £200 per month, and the government will top up your savings by 25%. This means that if you save the maximum amount each month, you’ll have £12,000 after just two years. Another option is to take out a Lifetime ISA. With this type of ISA, you can save up to £4000 per year and the government will top up your savings by 25%. You can use this money to buy a house or for your retirement.
Help to Buy
The Help to Buy scheme was introduced by the UK government in 2013. The scheme offers two types of support: an equity loan and a mortgage guarantee. With the equity loan, you can borrow up to 20% of the cost of your new home from the government. This means that you’ll only need a 75% mortgage to buy your property. The equity loan is interest-free for the first five years, and after that, you’ll pay a low rate of interest. With the mortgage guarantee, the government will provide lenders with a guarantee on part of your mortgage. This makes it easier for you to get a mortgage with a lower deposit. Help to Buy is only available on new-build properties.
When you’re buying your first home, it’s important to think about the long-term. You may be tempted to buy a property that’s cheap and in need of repair, but this can end up costing you more in the long run. It’s also worth considering whether you want to live in an urban or rural area. If you choose to live in a city, you’ll have easy access to public transport and amenities. However, property prices are often higher in cities. If you choose to live in a rural area, you’ll enjoy the peace and quiet of the countryside. However, you may need to travel further for work and services.
There are a lot of things to think about when you’re buying your first home. But with a little planning and research, you’ll be able to find the perfect property for you.
