It’s time for us to revisit the topic of homeownership, focusing on first-timers who are looking to buy a house or flat in London. You’ll soon find out just how challenging this can be, but we don’t want this to put you off. The odds may seem like they stack against you, but there’s help at hand. Aussie Man & Van is enthusiastic about getting more people into ownership and out of the rental loop.
Earlier this year, we wrote the following blog for first-time buyers in London, and you can read it here. Now it’s time to flesh this out and focus on other areas for consideration while you begin looking at mortgages. London is an expensive city, none more so than its tenants who spend a chunk of money per month on someone else’s property. In this article, we’ll dive deeper into the depths of savings for a deposit and related topics.
Delving Further into the First-Time Buyer Process –
The dream for many Londoners is to own a home one day. As you’d expect, it’s a long a protracted process that takes a lot of willpower and hard work. You’ll need to put in lots of research, not only to find the ideal property. Applying and securing a home loan is crucial, but it’s all worth the effort when you get the keys.
This is part two of the guide for first-time buyers, and we published a previous blog on this. In this article, we’ll look at the various steps you’ll need to take to move towards your goal. We’re always thinking of new ways to help our followers. Hopefully, this article will bring you further towards becoming a homeowner.
Some of the themes will continue from the first blog, and we’ll flesh out several points in more detail. There are other things you’ll need to take into account to understand specific aspects in more depth. The stages involved in homeownership are plentiful and often confusing and tricky for people who do this for the first time. That’s why we’re here to break them down into palatable chunks.
Mortgages – Concentrate Your Research –
There are various avenues when it comes to applying for a mortgage, and you’ll need to understand how they work in detail. Some will seem like a sure thing but might have higher repayments. Remember to cost things out yourself before making any applications. It’s essential you have an idea of whether you can afford to pay off a mortgage. It’s also vital you have some contingency measures in place, such as life insurance with wage protection add-ons.
The first thing you’ll need to work out is a guestimate of your budget against some mortgage examples. You can click here to use a mortgage calculator. If it’s a joint venture with your spouse or partner, that’s two wages and assets to combine. It will help if you have a clear picture of this as it affects affordability.
Next, we’ll look at the pros and cons of using government-backed schemes. There are numerous ones to choose from, including Shared Ownership, Help to Buy and several others. The details are where it matters, and while some are attractive to first-time buyers, they’ll have clauses. You’ll have to remain in the property for a specific period with further restrictions on selling.
There is no singular answer to how to approach the application side of the exercise. Our advice is to spread your research out and note everything in a Word document. Please be cautious when using price comparison platforms as they only tell half the story. Instead, use them to get a feel for the market. Please speak to your bank to see what packages they offer, as well as mortgage brokers.
More Tips on Saving Money for a Mortgage Deposit –
In our previous blog, we gave some tips on how you can begin saving for a deposit. We feel this needs some more attention due to the importance of having this in place. The maxim for this is – don’t put off something until tomorrow if you can do it today. If owning your own house or apartment is your goal, let’s start making changes straight away.
One of the obstacles renters face is their monthly outgoings, ironically, including tenancy costs. We’re going to suggest something – look at reducing this and move to a more affordable property for twelve to twenty-four months. Rent a self storage unit if you want to keep your possessions – the cost comparison per square metre is favourable. If you can trim a few hundred from your monthly outgoings, you’ll have a chunk of money to save.
It will be a good idea if you consider selling your car to raise some instant funds for anyone living in the city centre. London’s transport system is one of the best, so take advantage of it. An oyster card and the occasional Uber or cab will be cheaper than petrol and insurance. Plus, it’s an instant injection of cash into your savings account. It might only be temporary, and you can consider buying another vehicle after you’re a homeowner.
One of the things we think people should avoid doing is getting a second or third job. You’ll soon burn out, and this saving exercise needs to be manageable. Don’t do anything detrimental to your health and well-being. If you need to supplement your income, look into passive ways of adding new revenue streams to your situation.
Consider the Option of a Fixer-Up Property –
The first port of call for securing a first home might be an affordable housing development. However, we’ll be expanding on another option in this section. For those willing to put in the extra work, a fixer-up building might hold the key to an affordable first house or apartment. And there’s plenty of places that represent huge potential and value for money.
The only issue is the workload, even if you hire people for the renovations and labour-intensive tasks. You’ll be managing the project unless you have funds to outsource this as well. Regardless, you’ll be spearheading the big decisions and keeping a sense of organisation throughout. This will require patience, dedication, and most of all – time to spare.
There’s no better way of finding a bargain, though, with you standing to save tens of thousands of pounds. Auctions are happening all over Greater London and the neighbouring counties every week. We’re suggesting you attend at least one or two to get a feel for the process. Just remember to keep your arm down!
You’ll find most auction houses provide sales packs with lots of information for the properties. Some will also host open-house viewings before the auction, and it’s a good idea to take advantage of this. Even just for research purposes, you’ll be able to see if it’s worth further exploration or it’s not suitable for your circumstances.
The Importance of Surveys and Estate Agents –
This is something most prospective new homeowners have no experience with. Surveys are an invaluable part of the purchasing process, and they can protect you from any unexpected repair costs after you move in. Getting a survey for a property will give you an idea of any investment you’ll need to outlay. Money spent on a decent survey can help you avoid expensive surprises and costly repair jobs.
RICS Condition Report – this report details the property’s condition, including any risks and potential legal issues. It pays specific attention to significant defects. People tend to go with this option for newer houses that seem to be at a decent level of maintenance. The report won’t include any advice on the following action or valuations.
RICS HomeBuyer Report – this report will check for any structural problems, such as subsidence or dampness. You should be aware that this doesn’t extend beneath floorboards or behind the walls. This is a more in-depth survey than the condition report and will cost you more. Still, it’s possible to renegotiate the seller’s asking price if the repairs require a significant amount of money to undertake.
RICS Building Survey – if you need a more accurate level of inspection, this building survey uses a simple rating system to ensure that you can quickly identify the most serious issues. You’ll receive an in-depth analysis of the property’s condition, highlighting a range of problems, including advice on defects, repairs, and maintenance options.
Building Structural Survey – this is a comprehensive survey that’s suitable for all residential properties. Specifically, for older homes or properties that might need repairs. The surveyor will give you information on potential repair options and an overall estimate of any possible defects that might occur in the future.
A Balance of Optimism and Research –
Research is the key to making homeownership a reality. You’ll need to work with third parties and gather information from online sources. But the onus is on you to do the fact-finding, so don’t shy away from putting the work in, hoping someone else with giving you the answers. Allocate thirty or sixty minutes per day solely of mortgages and property scouting.
And remember this point – this has to be something you can manage. Mental health is physical health. Be firm about what you spend but don’t harm yourself in the process. It’s counterproductive if you’re doing nothing aside from saving money. Entertainment and socialising aren’t luxuries – we need them to lead full lives.
Let’s be optimistic about this and see the bigger picture whenever possible, as we’ll undoubtedly hit some low periods. Put small reminders around your flat you can see easily to refocus when you drift off course. Understand you’re working towards an ambitious goal and be proud of every penny you’re putting towards this.
Aussie Man & Van – Helping People Realise their Homeownership Dream –
At Aussie Man & Van, we love nothing more than moving first-time buyers into their home. The hope and positivity is infectious, giving us more reasons to love what we do. You’re starting a whole new stage of your life, one with more control. No more asking for permission to decorate or make alterations – it’s your place to do whatever you want with.
The Aussie team prides itself on being the ‘can-do’ removals and storage company. When the time comes, we’ll relocate you into your new home with an affordable service. We’ll do all the heavy lifting for you, providing an efficient and cost-effective move. Customer service is the foundation of every package we offer.
If you’re currently looking into getting on the property ladder, please contact us today. We can pass on any relevant advice to get you on the right path. And when it’s time to relocate, we’ll be here to provide you with an affordable move.