For the last few years, we have made it very hard on these rookie buyers to break into the housing game. With housing costs being at an all time high, people are getting creative and using unconventional methods to attain their homeownership dreams. In particular, moving, saving and using government programs were seen as three prevalent trends among buyers 26-34.
Alex Bonfield, a 34-year-old who recently relocated to Manchester, is currently in search of her first home in the £300,000 to £325,000 range. She applied herself to the task of saving and was able to save up a £50,000 deposit. That puts her in a surprisingly good position in this hot, competitive climate.
Eddie Keogh
Young couple Cameron Smith and Georgia Pickford —both 27—bought their three-bedroom flat using the Lifetime ISA (LISA) scheme. They snagged the four-bedroom property in Hertfordshire for only £320,000. This government-backed account will enable 18-39 year olds to save £4,000 annually. In addition, they’ll be getting a very juicy 25% bonus from the government! And Cameron underscores the value of budgeting, recommending new homebuyers focus on three buckets of spending—needs, nice-to-haves, and splurges.
“Every month, £200 came out of my paycheque – no excuses, no distractions,” – Cameron Smith
Oliver Jones, 27, decided to go for a shared ownership scheme. Having chosen this option, he was able to affordably buy a £500,000 two-bedroom flat in London. He bought the 25% equity share with a £40,000 deposit and now sublets a room to make it more affordable. Oliver’s journey illustrates the customizing power that shared ownership—if designed and structured correctly—can offer.
“We were tired of doing that dance every year with the landlord trying to hike up rent by stupid amounts,” – Oliver Jones
Abas Rai, at 26 years old, successfully utilized an “income booster mortgage” to buy a two-bedroom house in Suffolk for £207,000. By including his father on the mortgage application, Abas strengthened his affordability. He encourages other physicians in a similar situation to take this path if they have the support of their families.
“The bank added our incomes together and then multiplied it by 4.5 – that’s how they worked out the affordability,” – Abas Rai
According to new research from Santander UK nearly two-thirds of first-time buyers have changed address in the last two years. This trend serves as a testament to their persistence to break into the housing market. This is a good sign. This trend reflects that more and more people are willing to trade their desirable, though likely unaffordable, housing for something cheaper.
Camilla De Cesare, 32, embodies the new class of home seekers who have increasingly taken up investment property as a way of securing the money for a home. She was still saving and investing £80,000 in today’s money into the S&P 500 which grew to £150,000 over that time. In her journey Camilla recognizes that family encouragement played a part.
“My family helped me with the deposit, and I had a stable job, so I was starting from a fortunate position,” – Camilla De Cesare
Daniel Price, 27, clinched an absolute bargain on a three-bedroom house in the South Wales Valleys. He was able to buy it for only £95,000, using his Help to Buy ISA. This government scheme increases any deposit paid by 25% on deposits of between £1,000 and £12,000 that give a maximum bonus of £3,000. His journey started with one small step pushed by his mother.
“Originally, my mum told me about it, so I just put a pound in to open the account,” – Daniel Price
Despite the various paths taken by these first-time buyers, one commonality persists: the reliance on familial support. Lucy Acheson notes that over half of first-time buyers still depend on the “bank of mum and dad” to assist with their deposits. Savills our favourite estate agents, estimate the average parental contribution at £55,572.
