Readers put their property questions to our guest panel of experts: solicitors, mortgage advisers, property gurus, and Help to Buy providers.
How can we afford to buy?
Q: We’re tired of the rent increases and want to buy our own home, but Help to Buy is gone and property prices are too high. We earn over £55,000 together, but with rising mortgage rates, we’re unsure how to proceed. We need advice on how to achieve our dream of owning a home in London without wasting money on rent.
Meg Oldchurch, Ealing
A: The current situation with your landlord’s rent increases can indeed be draining. With the house prices in the UK at a record high, getting on to the property ladder is becoming more of a challenge for first time buyers. I understand your desire for stability and the longing to stop pouring your hard-earned money into rent.
Given your combined income slightly above £50,000 per annum, shared ownership could be a great option for you. Shared ownership allows you to purchase a share of a property (typically between 25% and 75%, and with the new revised model, it could be possible to purchase from as little as 10%) while paying rent on the remaining portion. This way, you can gradually increase your share of ownership over time through a process that is called “staircasing.”
Shared ownership offers several benefits. Firstly, it enables you to step on to the property ladder with a lower upfront cost, as the deposit and mortgage payments are based on the share you’re buying. Additionally, you can enjoy the stability of homeownership, build equity in your property, and have the freedom to personalize your home according to your preferences.
For example, you could buy a two-bedroom property at The Elms, Harrow, with £52,091 household income. The deposit would be based on the equity you are buying and much more affordable than buying on the open market.
Although the Help to Buy scheme is no longer available, there are still shared ownership opportunities in London and the surrounding areas. Housing associations and developers often offer shared ownership properties, and it’s worth exploring their websites; they can guide you through the eligibility criteria, mortgage options, and the overall buying process for shared ownership. At Octavia, we have a dedicated shared ownership team who can help with this.
To help you navigate through the process, I recommend reaching out to a housing specialist or a financial adviser who can provide personalized advice tailored to your specific circumstances, especially with your finances.
Remember, shared ownership can be an excellent pathway to homeownership, providing you with stability and the chance to escape the uncertain rent cycle. By exploring this option and seeking professional advice, you can move closer to realizing your dreams of owning your own home.
By Hopkin Man
What route should I take?
Q: I am a first time buyer, and I have always dreamt of building my own home. What advice do you have on how to make a start?
Will Thompson, Guildford
A: Undertaking a self-build is a massive project, and before you start, you need to be sure you have the skillset to take it on. A self-build can be a long, stressful process, requiring extreme organizational skills and a surfeit of patience, so begin by being absolutely sure it is a manageable project.
If you are sure, then the best place to make a practical start is with the budget. The budget will need to cover three main things: land, labor, and building supplies, as well as leaving around 20% as a contingency for unforeseen costs.
When it comes to land, obviously location will be important to you, and when it comes to a self-build, the best location is worth the extra money; the finished house can be altered, but it can’t be moved. You will also need to decide whether to buy a plot with existing planning permission or engage an architect to design anew, which while being exciting will increase the timeframe and cost of the process.
When it comes to labor, you need to be absolutely realistic about how much of the process you can do yourself. If you have experience, then take on what you can, but there’s nothing wrong with leaving it to the professionals and waiting to get handy with a tin of paint. Start the search for trusted builders and tradespeople, and get as many recommendations as possible; also, seriously consider employing the expertise of a professional project manager to ease the burden on yourself.
Finally, when it comes to materials, be specific and try not to think too much about finishes. If it comes to deciding between underfloor heating or a luxury bathroom, do the underfloor heating because the bathroom will be much easier to improve later.
That’s a lot to consider, but it barely touches on all the specifics you will need to juggle if you take on a self-build project; make a start with your budget, then speak to an expert.
By Neil Dickens
We need your questions…
If you have any queries, or difficulties in understanding the property buying process, our panel of experts is waiting to help. Send our team your questions on buying property, Help to Buy, legal issues, or your financial problems and we’ll find the best person from the panel to give the advice you need.
Email your questions to: lynda@firsttimebuyermag.co.uk
