How to escape the rent trap and get on the property ladder
30/10/2019 - Attwell Solicitors
In the current economy, many people see homeownership as a distant dream and are facing up to the prospect of renting in perpetuity. However, the team at Attwells Solicitors don’t think it has to be that way, and have sound advice on escaping the so called ‘rent trap’ and getting yourself on the property ladder.
Grow your deposit
The biggest hurdle for most potential homeowners is gathering together the sizeable deposit required to purchase that first home. There are schemes that can help you expand the reach of your deposit, such as the Help to Buy ISA. These savings accounts offer a decent interest rate compared to other savings methods, alongside a 25% contribution from the state, up to a maximum of £3000. Although the deadline for opening one of these accounts is the end of November this year, so move fast if you want to take advantage of this scheme.
Sharpen your credit rating
If you’re serious about getting a mortgage to buy a house, then you’ll need a strong credit rating. Even if you’ve been in debt in the past, there are ways you can boost your rating, and show you’re now someone mortgage providers can rely on. For example, if you don’t already have one, get a credit card, make purchases on it, and then pay off the balance before you incur any interest payments. Over time, this will strengthen your credit rating.
Cut your rental costs
The lower your rental payments, the more you can save every month. Now, that’s easier said than done, especially if you’ve got your eye on a nice apartment in London. However, if you’re serious about your goal of getting on the property ladder and buying that first house, it’s worth thinking about downgrading in the short term. Being able to move back in with family, commuting from outside the city centre, or moving to a smaller rental property might feel like a step backwards, but as part of a long term plan, it could actually bring you closer to the first rung of the housing ladder.
Will the new government be able to help you?
Boris Johnson has pledged to give millions of young people the chance to own their own homes… which sounds like a bold promise, but he may have a few plans lined up that offer a glimmer of hope for those who are currently trapped in the rental cycle.
For instance, MPs are considering offering a 20% discount to first time buyers who buy a property in the area they grew up in, with the costs being absorbed by developers.
There is also the prospect of shared ownership, which allows home buyers the chance to buy a percentage of a property, and pay a fraction of the rent on the part they don’t own, alongside their mortgage.
If you are thinking about buying a shared ownership property, our conveyancing calculator can help calculate your conveyancing fees.
For more information on Attwells visit their website here.
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