Get your foot onto the first rung of the property ladder
Five years is the average time it takes today's first-time buyers to save a deposit for their first home, according to research by Halifax. So it's no surprise that a growing number of first-timers, and their parents, are looking for ways to shimmy up the property ladder.
If you are in a similar position, here are some ways to get yourself a foothold on that elusive property ladder.
One option is to join forces with another first-time buyer. By having additional income sources to take into account, you can significantly increase your buying power.
Brothers Mike and Robert Burton are in the process of buying a £200,000 Victorian terrace together after finding themselves priced out of the Reading market. 'Neither of us could afford to buy on our own,' says Mike.
Buying with friends is another option. Dale Jannels of broker All Types of Mortgages, says he is seeing more people looking to buy in groups. "It's possible to take up to four peoples' incomes into account when determining how much you can borrow," he explains.
You don't necessarily have to share your living space to benefit from another person's financial help either. Many first-timers are helped out with the deposit or ongoing mortgage repayments by a parent, sometimes in exchange for a part-ownership of the property.
A variation on this is the guarantor mortgage. With these, rather than owning part of the property, another person's income is considered. This is the approach taken by Veerena Henson. "Just having my dad's name on the paperwork made such a difference. I wouldn't have been able to borrow enough on my own," she explains.
You can always look for someone you don't know to help you become a property owner. The website sharedspaces.co.uk helps people find suitable co-owners in much the same way as internet dating. "You search our database online for people you might want to buy with," explains its founder Richard Cohn. "You then exchange emails and build a relationship to determine whether you could buy together."
Whether you buy with a family member, a friend or even a stranger, it's worth laying down some ground rules first however. Legal advice is essential, says Cohn.
Bargain basement properties
Settling for a cheaper property is another way to get onto the ladder quicker. Traditionally the haunt of the seasoned property developer, Gary Murphy, property consultant at Allsop, says he has seen more and more first-time buyers coming to auctions. Buying at auction isn't for those of a nervous disposition. Once the hammer goes down you are legally bound to buy the property. Arranging a mortgage can be nerve-wracking too. Completion normally occurs within four weeks, which can test many lenders' administration.
Buying a rundown property and doing it up is another option. These will be cheaper and, for those with the time and money to renovate them, offer the potential to leap a little quicker up the property ladder.
Fairly straightforward improvements are relatively easy to get mortgages for, but you might struggle if you are taking on a major project. Generally lenders require a property to have a functioning kitchen and bathroom before they'll give you a mortgage. Serious repairs, such as a new roof, may result in some of the mortgage being retained until the work is carried out.
A more suitable option could be affordable housing. Planning permission regulations require there to be some affordable property within new developments, with affordability generally based on average earnings, either on a local or national basis.
"It will depend on the rules set down by the local authority but they could be available to rent through housing associations, for shared-ownership schemes or for key workers," says Adam Slater, affordable housing manager at Linden Homes. "There could be conditions attached too." Mortgages are easy to arrange on these properties, although problems may arise if there are conditions attached.
How to give your kids a helping hand
Faced with the prospect of their kids never leaving home, more and more parents are keen to offer a helping hand onto the property ladder.
"Parents with spare cash may want to give their kids a gift or loan to help with the deposit or to cover the cost of buying," says Dale Jannels of Atom.
But if you don't have the cash to spare you might prefer to help with the ongoing cost of the loan by buying the property with them, which will increase the amount they can borrow.
Acting as a guarantor to help your child secure a mortgage is usually a temporary arrangement and one that needn't cost you a penny. Ian Bates at Bank of Ireland Mortgages says: "You don't need to remortgage or cash in investments to help them out. Proof of your income is sufficient."
It's not suitable for everyone though. As any debt will be taken into account, including your own mortgage, which could reduce the amount that will be taken into consideration. More importantly, you would be liable for the debt too.