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Reaching the First Rung on the Ladder

Karen TurnerA recent survey revealed that 40% of Scots feel they will never be able to get onto the property ladder.  That’s a worrying and I feel a very sad statistic but not one that surprises me at all.  The average age of the first time buyer has steadily increased over the last 12 years and was at one point averaging out at 43 years. I bought my first property at 21. So it’s doubled in my home ownership period.

The country and indeed the property sector has suffered badly since the recession in 2008.  It is only in the last 24 months where we have seen a steadier and improving marketplace.  

There had in the past been a lack of mortgage borrowing for first time buyers and they had to save at least 20% for a deposit. This was easier to do if they lived at home with the support of the bank of mum and dad, and less so if they were in rented accommodation.  

However the lending position has changed and lenders are now offering better loan to value deals.  Young people are also staying in rented accommodation longer, no doubt as a result of the difficulties caused by the recession.

The aspirations of people to own their own property have not changed, it has just become increasingly difficult to get on to the property ladder, especially as we now start to see confidence returning to the market and prices beginning to rise.

So what can you do?

If you are saving to purchase your first property, there are things you can consider to help get you that little bit closer to ownership.

If you live at home you could consider setting up a monthly savings plan which has a long access period to it – thereby taking away the temptation to dip into it when you reach the end of the month and the purse/wallet is looking a bit bare.  Add your works bonus or any salary increase to this if you are lucky enough to receive one along with any money you are given for birthdays and Christmases.  What better present than owning your first home?

There is assistance available such as Help To Buy and the LIFT scheme which may be a good option and worthy of further investigation for you as a first time buyer.

Consider moving in with a sibling or a friend – share the deposit, mortgage and monthly outgoings.  Ask your parents to be guarantor on your loan or to help you with your deposit. If you go down this route of shared ownership however you should set up an agreement between you which deals with how any money will be repaid if it’s not being given as a gift but as a loan instead. If you find yourself inheriting money – invest it wisely in a deposit for your own place.

Of course where you live will impact on your earnings and of course property prices.  Some towns and cities are more affordable than others.

Be realistic on what you can afford.  Research up and coming areas – buying at this point will be a good investment for the future.  Make sure you think longer term. In an area on the up, property prices should continue to rise as the area becomes more desirable. Win-win for you.

There are still good deals to be had that fall below or just over the LBTT threshold, that a first time buyer can add value to in order to climb the ladder, for example:

16 Crossgate, Cupar

2/4 Oxgangs Park, Edinburgh

68 Pickford Crescent, Cellardyke

The best advice I can offer is to get advice early on in the process and plan ahead. Arrange a free, no-obligation chat with one of our property advisors, or for mortgage advice we can refer you to one of our trusted partners.

If you would like to speak to one of our property advisors to learn more about getting onto the market, call your nearest office, or drop us an email.

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