Published: 13/12/2016
Young people are facing a tough economic landscape these days. With rising house prices it can seem that as fast as you are saving for a deposit, the deposit needed to buy a decent property is increasing. For so-called ‘generation rent’ home ownership is a dream many have given up on, but whether you want to rent or buy, there are many options to consider that can help you find your dream home.
Help to buy ISA
The good news is that for those who do still have their heart set on home ownership, help to save for a deposit is available from the Government in the form of a tax-free Help to Buy ISA. This helps increase your savings by 25%, so for every £400 you save, you will receive a further £100 from the Government, up to a maximum of £12,000 savings. This means if you save the maximum amount you will receive a further £3,000 boost, and if there are two of you saving for a property, you can both take one out, which will up the Government contribution to a whopping £6,000.
If that has given you further hope that you can afford to own your own home, take a look at just a couple of properties we currently have on the market to whet your appetite.
We are currently offering a modern 2-bed apartment in the highly desirable area of Horsforth which would make a great first time buyer home and is close to the station for commuting into Leeds city centre.
Which mortgage?
If you are buying a property for the first time, it can be daunting deciding which mortgage to choose. There are literally hundreds of options available from many different lenders, and if you choose the wrong one, you could end up paying more than you need to. Most mortgages last for a 2, 3 or 5 year term, so it’s always a good idea to seek advice from an independent financial adviser before you commit to anything.
Fixed
A fixed rate mortgage is the simplest type, and it does exactly what it says on the tin – the rate you pay each month is fixed for the duration of the mortgage term, meaning you can manage your monthly household budget knowing exactly what you will need to pay.
Variable
A variable rate mortgage can vary depending on interest rates. With a tracker mortgage, this tracks the Bank of England base rate, then adds a small percentage of interest on. With a discounted mortgage, the interest is set by the lender, and then a discount applied. Current low interest rates can help make your monthly payments more manageable, but remember that if you go for a variable rate, those costs could increase at any time, so make sure you can afford to take the extra hit if interest rates do rise.
Commitment-phobe
If your career is taking off, you might not want to commit to staying in one property or area. Many people are happy to move around the country to take advantage of where the best jobs are. If this sounds like you, you might decide you are better off renting for the time being. Renting offers many benefits including the freedom to move around more easily. In this case, the best advice is to be aware of unscrupulous landlords, by using a reputable lettings agency.
Why use a Letting Agent when renting?
Renting via a Letting Agent gives you the benefit of knowing that if any issues arise, such as maintenance problems, someone is on hand to address these quickly. We advise you to check that the Letting Agent is ARLA registered. This is important because ARLA agents have chosen to be regulated, understand tenant and landlord law, and follow a strict code of professional conduct. This means you will receive a professional service at all times.
Letting Agents also have the local knowledge to help you find the right property for you and avoid any dodgy areas, and can act as a middle man to help mediate between you and the landlord if any disputes arise.
If you are a young person renting for the first time, it can be difficult to demonstrate your ability to pay the rent, so you may be asked for somebody to act as a guarantor. This person will promise to cover the rent if for any reason you are unable to meet the payments. If you have just landed your first job, or if you are still studying, this could be a great way to overcome any barriers to renting your first home.
Whether you are looking to rent or buy, or even if you are still unsure, talk to us today - we can help you on your way to finding the right home for you.