- The 5 easiest ways to become a homeowner
- Most of them readily available to everybody
So you are not a homeowner now and you want to become one…
Have you ever thought that it’s impossible to get on the property ladder – due to obstacles such as lack of affordability and difficulties in saving the deposit?
Of course you have!
However, thankfully, the position is nowhere near as bad as it may seem at first sight.
To achieve the homeownership which seems unobtainable, you simply need to rely on one or more of the 5 pillars of easy property ownership:
1. Gifted deposit
4. Right to Buy or Right to Acquire
5. Shared ownership
1. Gifted deposit
A gifted deposit is one you get without the challenge and delay of having to save up for it.
It may come as a simple gift from a parent or other relative who has or who can obtain the spare funds to help you out.
If you are due a legacy in the will of a parent or other relative, you may be able to persuade them of the practical advantages of paying that legacy early as all or part of your deposit.
A gifted deposit, whatever its source, makes easy for you perhaps the hardest thing about buying a home – finding the deposit.
If you can secure the mortgage you need, you are good to go as soon as you receive your gifted deposit.
Buying a home with someone else (co-ownership) makes things easy in terms of reducing the money burden by 50%.
You only need to find 50% of the deposit and a lender will take into account your joint income, making it easier to obtain the size of mortgage you need.
There is the added benefit that subsequent running costs – payment of the mortgage and the household bills – will also be halved.
Where appropriate, you can make it even easier to buy by purchasing with two or even three co-owners.
There are a number of freebies or financial incentives available to buyers, and in particular first time buyers.
They ease the financial burden of buying a home, making homeownership more affordable.
As a first time buyer, you can get up to £3,000 towards your purchase if you save towards it under a Help to Buy ISA.
You can get an interest free loan of up to 40% of the price of qualifying homes under the Government’s equity loan scheme.
First time buyers benefit from stamp duty exemption for properties up to £500,000, and this can be worth up to £5,000.
You can also negotiate a “freebie” when you are buying a property, especially a new property, where the developer is motivated to sell.
In such cases you may be able to obtain a genuine and significant reduction in the purchase price (perhaps up to 25% in an exceptional case)
Use as many “freebies” as possible to smooth the way to home ownership.
4. Right to Buy or Right to Acquire.
If you qualify for the Right to Buy (for council tenants) or the Right to Acquire (for housing association tenants), you will get a discount if you purchase your home from the council or the housing association.
The discount is generous in the case of the Right to Buy and can be over £100,000.
In less expensive parts of the country, the discount makes it relatively easy to get on the housing ladder.
But its impact, though helpful, is not so effective in “unaffordable” regions of the country like London and the South East.
5. Shared ownership.
Shared ownership is also a major player in making homeownership easier.
This is because, with shared ownership, you are buying only a part of a property – typically 25%, 50% or 75%.
The part you don’t buy is retained by the owner, usually a council or housing association, and you pay rent on it.
The financial cost of buying on a shared ownership basis is significantly less than a regular purchase, and takes the difficulty out of buying for countless buyers.
If you are hoping to become a homeowner in the future, don’t wait until then before you look into the 5 pillars of easy homeownership.
Consider them now, assessing which ones are available to you, and how best you may be able to use them.
Further, if necessary, take advice from suitable experts – conveyancers and mortgage advisers – at this early juncture, enabling you to be fully prepared when you are ready to buy.
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Do you agree with me on the 5 pillars of easy property ownership? Are you aware of any other methods, strategies or devices which make ownership easier? Please leave your observations or comments below.
You may also find the following blogs useful:
Top 5 tips for first time homeowners the world over (essential general information)
10 easy ways onto the property ladder (must know ways to become a homeowner)
Beware of developers bearing gifts (why not all incentives are a giveaway)
Stress free property purchase (top tips to make buying less of a hassle)
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Rebel Property Coach
My website is: www.rebelpropertycoach.com