The Money Guardian’s Top 5 Tips for Getting On The Property Ladder Young
It can seem tough for many to know how they will get on the property ladder these days and first time buyers can now be aged anywhere from early 20’s to early 40’s. The cost of renting can really get in the way of even those with good incomes getting the deposit that they need to buy a home without the help of family and for some – impossible. It’s important to get ahead when you are young and follow the examples that are out there of young people doing what they need to get on the ladder.
You Can Get On The Ladder Young
It is possible to get on the property ladder younger and The Money Guardian has helped clients in their early 20’s buy their first homes. Using these individuals as an example, here are our top 5 tips for getting on the property ladder young:
Top 5 Tips
1.Start saving as soon as you leave school, the examples we have seen of young people who saved early for a deposit either went into full time work instead of University or worked hard in a job as well as go through University, some even chose to go to Universities in their home town avoiding the expensive living costs of moving away from home.
2. Try not to waste your money renting, give yourself a goal in time to raise money and stick to it. If you are able to, stay home living with family and save, save, save. Delaying living on your own for another year or two will be well worth it if you can move into a flat you own for the first time. The cost of renting will make it almost impossible to save – even to those earning good incomes – once you start on that journey and it is hard to go back. Living with family instead of renting may also mean you can save and have money left over for nice holidays and socialising.
3. Find a financial partner. If you aren’t ready for a relationship commitment or one hasn’t come your way, find a friend or family member who is looking to get on the property ladder and plan to do it with them, now is a time when there are many more options and choices available to people when it comes to mortgages and homeownership. Most people can’t do it on their own and love doesn’t come easy to everyone, so look within your circle to see who else might be ready to do this with you.
4. Aim to earn at least ¼ of the value of the house that you want to buy either jointly or on your own. If you can’t achieve this in your chosen career, change it – maximising your earnings at this age is essential to getting on the property ladder young. If you have skills to work in a better paid field, even if you don’t plan on staying in it, see it that it’s worth doing a job that pays better if you have a goal to own your home. Once you are on the property ladder, you can rethink your career path and as long as you pay your mortgage, your mortgage or home cannot be taken away from you even if you start earning less.
5. Don’t get a car loan or bank loan. It sounds very tempting to get a loan when you feel you can manage the repayments but loan repayments reduce your potential to borrow. Not only that but once you have got a car loan, you will never retain the value in your car to sell it and repay it. The car of your dreams might seem like something you really must have now, but this can jeopardise you getting a mortgage at a later point until you have repaid it.
Help Your Children To Save
Even with the above tips, some young people may still need help from a parent or family member to help with a deposit or the fees. Not everyone has this help available to them. Our final tip is to parents of children or teens. If you can do more to save for your children so that when they are 18 or 21 they have help with buying their first car, their first year at University or a deposit for their first home when they need it, do.
Empower Your Children
The Money Guardian Director Melanie shares her daughter’s savings journey with her and always has since she was just a toddler. She understands that she has short term savings and long-term savings, she deposits and withdraws money herself, she is learning to save half of whatever she gets on Birthdays and at Christmas and is seeing the benefit of this when she can make a big purchase – such as a new TV – with her short-term savings. Melanie can’t guarantee that her daughter will be any better than the next young person with money when she gets older, but is doing her best to encourage and empower her to understand money and make sensible decisions when it comes to savings and spending. This might help her to get onto the property ladder sooner than others.
More Advice and Tips From The Money Guardian
If you would like more advice around owning your own home or working towards this goal, we’d love to help you so get in touch.
Check out our website to get in touch or check out our other blogs including more tips for parents with young children to encourage good saving habits young.