What Can You Do To Make Homebuying More Affordable?

With housing prices ever on the rise, and mortgage rates making getting onto the property ladder increasingly difficult, it might feel like the dream of owning your own home is getting harder and harder to reach. Especially for first-time buyers. However, while it is certainly more difficult than in the past, that doesn’t mean it’s impossible by any means. There are still strategies that can help you buy a home more affordably. Here, we’re going to look at a few options worth considering. 

Co-Buying With Another

Although it might not be the first option to jump into your mind, co-buying has become a lot more popular as of late. This essentially allows you to purchase a property with a friend, partner, or family member. Combining your incomes can greatly increase your buying power by helping you qualify for larger mortgages while sharing the burden of the deposit and monthly payments. However, it’s important to make sure that there are clear legal agreements on the nature of ownership going forward. Cohabitation and ownership contracts can help outline responsibilities, exit strategies, and what happens if circumstances change and you can no longer continue jointly owning the home with another. A lot of communication and trust is needed to make this strategy work.

Right To Buy

The Right to Buy scheme is available to renters of council and housing association properties, allowing them to buy their homes at a significant discount. It’s worth noting that the scheme’s availability will depend on where you live, and some regions might have their own equivalents worth exploring with the help of your local authority. However, in some cases, discounts can reach tens of thousands of pounds, depending on how long you’ve been a tenant, which is one of the most direct ways to reduce purchase costs. The discount can also affect your deposit, meaning you may not have to save as much upfront before applying for a mortgage. Long-term affordability is still important to consider, however, alongside other costs like legal fees, surveys, and so on. 

Shared Ownership Schemes

You might want to consider this the inverse of the “Right To Buy” scheme mentioned above. However, rather than being a government initiative, shared ownership homes are typically sold privately. They allow you to purchase a portion of the property, usually between 25% and 75%, while paying rent on the remaining share. You can reduce the size of the mortgage and deposit as a result, making it a lot easier to get started with home ownership. In most cases, buyers choose to increase their ownership, buying a greater portion of the home when they have finished paying the mortgage. It’s important to bear in mind additional costs like rent, as well as potential restrictions on selling the home before you fully own it, but it can still be more affordable than renting alone.

Property Auctions

If you’re hoping to secure properties below market value and full ownership, then property auctions might be the place ot look. These typically sell off repossessed properties, fixer-uppers, and homes needing quick sales, which means they typically cost less. However, as a result, they also usually require a little more work, and you don’t have as much time for inspections and decision-making. Auctions move quickly. They have a set date, and once you agree to buy the home “as seen” on that date, there can be steep penalties for trying to change your mind. As such, you have to be ready to carry out any necessary surveys and legal checks within a relatively small timeframe. 

Lifetime ISAs

A lifetime ISA is one of the most effective tools for helping you build the savings required to buy a home. With these, you can save up to £4000 a year, and the government adds a 25% bonus, up to £1000 annually. This makes it a lot easier to build up your deposit over time. Although they are referred to as “lifetime ISAs”, they can be used not only for retirement but for buying your first home, as well. However, for homebuyers, these penalties typically only apply for homes that are over a certain value threshold and ISA accounts that are open for less than a year.

First Homes Scheme

Another government initiative, this is one that offers newly built homes at a discount of at least 30% compared ot market value, specifically aimed at new buyers as well as keyworkers. It’s designed to help those who are able to manage the long-term costs of homeownership, but might be struggling with that initial affordability barrier. The discount is attached to the property, so it even benefits future buyers. However, the availability of the scheme is limited based on location, as well as the eligibility of buyers, which includes income caps and local connection requirements. That said, it does come with some resale restrictions, so it’s best suited to those who fully intend to live in their new homes for the long term.

Stay Flexibility

By being flexible, you may be able to make homebuying more affordable. Expanding your search to areas you have considered before, such as commuter towns or up-and-coming regions, could help you find lower property prices. You might want to consider smaller homes, fixer-uppers, or properties that might need aesthetic upgrades that tend to come with lower upfront costs. Additionally, being open to different property types, such as flats instead of houses, may improve affordability. Timing can also play a role, as quieter market periods may offer better negotiation opportunities. Compromises are often necessary to lower the barrier between you and your first home, but that can having to wait indefinitely while the housing market continues to get more expensive. 

While the housing market is getting a lot more demanding on budgets, there are still ways to make it more affordable and put your goal of owning your own home in reach. Be it through government schemes, uniquely structured buying opportunities, or practical strategies, you can find the right opportunity for your needs.

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Becky

Meet the award-nominated UK lifestyle blogger behind Spirited Puddle Jumper – a mum of three living in South East London! Becky shares the real ups and downs of family life, parenting tips, and lifestyle inspiration, proving that being a mum doesn’t mean you stop being fun or having other interests! Follow along for honest insights into UK family life and opinions on a whole range of topics, from travel and food, to beauty reviews, home and DIY, business and health and wellness.