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With mortgage rates expected to fall in the coming year, owning a home may finally become a reality for many aspiring first-time buyers. While the journey may seem overwhelming, there are now several strategic ways to start saving, secure financing, and achieve that long-awaited first step onto the property ladder.
1. Start Saving Early with a Lifetime ISA
First-time buyers are encouraged to begin saving as early as possible, with the average deposit now reaching £34,500, according to UK Finance. One of the most effective tools is the Lifetime ISA, which offers a generous 25% government bonus on savings. For every £4,000 saved annually, an extra £1,000 is added, potentially accumulating up to £22,000 in bonuses by age 30. Family members can contribute, though funds must be used for a first home valued under £450,000.
2. Explore Low-Deposit Mortgage Options
The availability of 95% loan-to-value (LTV) mortgages has surged, giving hope to those with smaller savings. Yorkshire Building Society, for example, offers a £5,000 deposit mortgage, while Skipton’s Track Record mortgage offers 100% financing to applicants who can prove they’ve consistently paid rent higher than the prospective mortgage. However, such deals usually carry higher interest rates and may not suit self-employed buyers with complex incomes.
3. Consider Shared Ownership Schemes
Shared ownership allows buyers to purchase a stake of 25% to 75% in a property and pay rent on the rest. Over time, they can increase their ownership in a process known as “staircasing.” This option is available across the UK and is no longer limited to younger buyers — with some schemes seeing average applicant ages around 48. Eligibility varies, so regular checks are advised.
4. Use an Income Boost Mortgage
Also known as a Joint Borrower Sole Proprietor mortgage, this option enables buyers to include family members or friends on their mortgage application, boosting borrowing power without affecting their first-time buyer status. It’s a great solution for early-career buyers who earn less but have supportive family members. However, all parties share financial liability, making trust and repayment planning essential.
5. Look Into Professional Mortgages
Lenders now offer tailored “professional mortgages” for regulated careers such as doctors, teachers, architects, and NHS staff. These professionals may qualify to borrow up to six times their annual income, with specialist lenders like Kensington and Teachers Building Society offering favourable calculations that include overtime and second jobs. While rates may be slightly higher, the borrowing potential is significantly increased.
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