Suffolk experts' 4 top tips to get young people on the property ladder
- Credit: Getty images/ Aaron Scott/ Brown & Co
From taking advantage of help to buy schemes or improving your credit score, two Suffolk property experts offer their top tips to young people thinking about stepping onto the property ladder.
The average price of a property in Suffolk currently stands at £272,839 with the county seeing an "unprecedented" shortage of homes for sale as many try to get on the ladder for the first time or find their next home.
For those on the hunt for their first ever place, experts have issued four tips to help them take the next step forward in their lives.
Work on your credit score
Expert Aaron Scott, is broking manager at Try Financial in Ipswich and has worked in the broking industry for more than five years, Aaron has experience helping clients source mortgage lenders – even those that aren’t accessible to clients directly.
A mortgage broker can find different lending options much more quickly than individuals searching on their own, and will take into account a client's financial circumstances and find a lender that is suitable for them.
He explained that the Covid-19 pandemic has meant some people have missed payments on credit commitments and he has therefore seen a large increase in those wanting assistance in improving their credit score which is why working on this is a good first step.
He said: “The most important thing in an ideal world is a good credit score. Whilst this isn’t essential, many of the lenders who offer the lowest rates will only lend to those with very good credit scores.
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“The larger the deposit as a percentage of the property value, the lower the potential mortgage rates will be.
“Lenders will also look at bank statements, things such as regularly being in overdraft or exceeding overdraft, along with regular or large sums spent on gambling can be seen as red flags to a lender."
Take advantage of schemes
Aaron explained that the help to buy scheme offered up by the government is a popular option for those under the age of 40. The scheme is only open for new build houses, but requires first-time buyers to pay a smaller percentage of the deposit with the government providing a loan.
He said: “The Help to Buy scheme only requires a 5% deposit with the government providing a loan for 20% of the deposit towards the purchase of selected properties.
“After an absence during Covid, 5% deposit mortgages have also become available again which allows people to purchase at a value that would otherwise be unaffordable.”
Aaron also adds that saving accounts are also a very useful tool. Although the Help to Buy ISA (a separate entity to the Help to Buy scheme) has closed to new applicants, young people can definitely take advantage of the Lifetime ISA (LISA), open to anyone between the ages of 18 and 39. The LISA allows individuals to save up to £4,000 with the government topping it up with £1,000.
Budget, budget, budget
It may be glaringly obvious that sacrifices and cut backs have to be made when thinking about buying a property. But sometimes it can be easier said than done. What can a young person do to save money?
Well, Aaron says set yourself a weekly budget and start a direct debit so that as soon as you’re paid, a percentage of your wage goes into an ISA that helps you save for a deposit. And cut back as much as you can.
“Many people don’t realise how much they spend on things such as takeaway coffees, meals out, nights out, and clothes each month.
“Reducing these things just a little can mean people can have hundreds extra per month to save. A takeaway coffee once a day Monday to Friday could easily be £80 a month that someone is spending just on coffee.”
Do your research
The final tip is offered up by Peter Hornor, chartered surveyor and a partner at Brown & Co which has an office in Bury St Edmunds.
He says one of the most important things for young people thinking about getting on the property ladder is do your research.
“Take a tour around the area first and try to understand the market and values before you view. Understand the difference between new build and established properties.
“Don’t exceed your budget, do your homework and speak to friends, family and advisors who can be a real help to those inexperienced in the house buying process.”