Why you shouldn't give up on buying your first home
If you're currently renting, have you ever wondered whether you'll ever own your own home?
Perhaps you've been saving for a deposit, but house prices seem to keep moving out of reach. Maybe you're paying hundreds of pounds in rent every month and that means you’re struggling to find spare cash to put aside.
Or perhaps you've simply decided that buying a home is something other people get to do. Well, if that’s you, you're not alone.
New research published last week has revealed a worrying gap between what renters want and what they believe is possible.
And if you're a younger renter hoping to get on the property ladder, it's worth paying attention.
Many don't think they ever will buy a home
Research from the TDS Charitable Foundation, based on a survey of more than 2,000 private renters in England, has highlighted just how many people feel stuck in the rental market.
The findings make for sobering reading:
76% of renters surveyed said they would like to own their own home.
44% expected to rent for the rest of their lives.
51% said they wanted to move out of their current property but felt unable to.
47% said finding a suitable property during their most recent search had been difficult.
The figures highlight a frustrating reality. Many renters still dream of owning their own home, but a significant number no longer believe it's achievable.
You might recognise that feeling yourself! You see friends buying houses, scrolling through property listings becomes a regular habit, and you wonder how anyone manages to save a deposit while paying rent, bills and the cost of everyday life.
It's easy to assume that buying your own home is simply out of reach.
But is that definitely the case?
Why does getting on the property ladder feel difficult?
For many younger people, saving a deposit is the biggest hurdle. Rent takes up a significant proportion of monthly income, leaving less money available to put towards a future home.
According to data in the past few weeks, about a third of your monthly wages will be spent on rent!
Then there are rising living costs, car finance, credit commitments and the expense of simply enjoying life.
Even when you've managed to save something, you might worry that your deposit isn't big enough or that your salary won't stretch to the mortgage you'll need.
And with so much information online, it can be difficult to know which advice applies to your circumstances.
Perhaps you've heard that you need a 10% deposit – a myth we’ve looked at before! Or you may think you have to earn a certain salary. Maybe you've assumed that because you're self-employed, have a student loan or have used Buy Now, Pay Later services, a mortgage lender won't be interested.
The problem is that assuming you won't qualify for a mortgage isn't the same as finding out whether you could.
All buyers’ circumstances are different, and lenders have different criteria. That's why getting advice based on your own situation can be a useful first step.
Could buying your first home be more achievable than you think?
Let's be realistic! A mortgage isn't right for everyone, and speaking to a broker won't magically solve the affordability challenges facing many renters.
But there may be options worth exploring before you decide to give up on homeownership altogether.
You might not need as big a deposit as you think
Some mortgages are available with deposits as low as 5%, subject to eligibility and lender criteria.
That doesn't mean a smaller deposit is always the best choice. The amount you put down can affect the mortgage deals available and the interest rate you pay.
However, it does mean you shouldn't automatically assume you need tens of thousands of pounds more before you can even start investigating your options.
There may be schemes worth exploring
Depending on your circumstances, schemes such as Shared Ownership or First Homes may be worth investigating.
A Lifetime ISA may also help eligible first-time buyers save towards a deposit, with a government bonus subject to the scheme's rules.
These options aren't suitable for everyone, and eligibility conditions apply. But they're worth understanding rather than dismissing without looking into them.
You can find more information in the government's First Homes guidance and MoneyHelper's first-time buyer guide.
Your salary might go further than you realise
Your income is an important part of a mortgage affordability assessment, but it isn't the only consideration.
Lenders will also look at your regular outgoings, existing borrowing, deposit and personal circumstances.
If you're unsure what you might be able to borrow, a mortgage adviser can help you understand your options and whether there are lenders whose criteria may suit your situation.
You don't have to work all of this out on your own.
What if you're renting in Washington, Sunderland or Newcastle?
Here in the North East, it's worth looking at your options with the local property market in mind.
The area you choose, the type of property you're looking for and the compromises you're prepared to make can all influence what's achievable.
Would a flat be a sensible first step? Could you look at a different area? Would buying with a partner change your options?
You might find that adjusting your expectations opens up possibilities you hadn't previously considered.
Equally, you might discover that you need more time to save or improve your financial position before buying becomes realistic.
Either way, understanding where you stand is far more useful than feeling stuck without a plan.
Stop assuming you can't buy. Start finding out
If you're renting and feel that owning your own home is becoming an impossible dream, don't feel you have to make that decision without exploring your options.
Start by looking honestly at your finances.
How much have you saved? What could you realistically afford each month? Are there any debts or credit commitments you could reduce? What sort of property and location would suit your budget?
Then consider speaking to a mortgage adviser who can help you understand what may be possible.
At The Mortgage Dog, we believe buying your first home should feel less confusing. We can talk you through the process, explain the options that may be available and help you understand what your next steps could be.
We can't promise that everyone will qualify for a mortgage. But we can help you explore your circumstances rather than ruling yourself out before you've even started.
Your first home might not be as far away as you think. And if it is, knowing what you need to work towards is a good place to begin.
Ready to find out where you stand?
If you're renting in Washington, Sunderland, Newcastle or the surrounding area and want to explore your options, get in touch with our friendly and experienced team.
Let's have a conversation about getting you mortgage ready.
Your home may be repossessed if you do not keep up repayments on your mortgage.
