Five Tips For Struggling First Time Buyers

Funny that 4 out of 5 of these tips rely on parents - shows the change in our society really. My parents were able to buy land and build their own house with no financial help from their parents, on one (initially low) income whilst raising 2 (later 3) kids.

And this was just 30 years ago!

How we first-time buyers are supposed to get 'on the ladder' these days is beyond me - and what of the next generation; will our kids stand any chance at all or will they depend on us even more?

Here's my tip for first time buyers: wait until next year!

Their is no guarantee where property prices are headed in the next 18 months. Who's to say if property prices fall in the next 12-18 months or not. Surely its better advice to take advantage of the buyers market we are in just now to find a property from a motivated seller and get it below market value, thus automatically giving you a cushion against any potential correction in the house prices.

This a difficult one to call. If we only consider homes as assets then you do need to wait, however, that ignores the utility benefit of your own home.

Joint Equity recently conducted a very unscientific survey, I admit, of its Owner Partners and found that the biggest benefit of having your own home is not having a landlord “breathing down your neck”. And I remember this being my key driver when we bought our first home.

Also remember that property prices need to be considered over a longer term. A drop today compared to last year is just a smaller growth from 5 years ago.

Finally there is nothing wrong with parents helping their children if they can, it’s the First Time Buyers that cannot get parents help that we need to think about.

Bond000, you are right, this is basically "beg it off the parents" advice. However, is this really surprising? After all, that is the generation that has made undreamt-of capital gains on their homes, which is precisely the reason that younger people struggle to buy!

As much as I normally agree with most of the advice on this site I'm afraid I would be totally against asking parents to stump up a large part of my depsoit & most certainly NOT to stand gurantor! That for me is a very irresponsible thing to do

Sorry Jane but that is not a good suggestion at all. My feeling is simply to keep saving & increasing that deposit. The problem is also that people get too obsessed with buying, yes we all want our own home but not at the cost of mortgaging to the hilt or have someone else guarantoring such a huge amount of money!

House prices may dip a little in the coming few years, but it is better to buy now as you can strike a good deal and pick the best property available in the best area, which is difficult to do in a rising market. So my advice is buy now if it is a home for the long term you are after. There are many ways to get on the ladder for the first time, and there are opposing comments made in the above posts none of which are wrong. However I would recommend buying the biggest property you can, so you can grow into it if needed (In the long run it will save you a small fortune and stress of having to move again). In my case after Divorcing and the Ex getting everything, I started again by getting a 95% Mortgage and at the last minute got the remaining Deposit via a personal loan. I purchased a 3 Bed House that no way I could afford on paper (CSA's and the likes to pay), but as soon as I moved in I let out the two spare rooms to two lodgers for a few years (which was a lot easier than I ever thought), there rents (£600 a month easy money) just about covered the Mortgage payments, so I could clear the personal loan and make a dent into the outstanding Mortgage. Seven years on it was the best thing I ever did and I have a substacial equity stake and no need to move House (or have lodgers anymore).If I had bought the affordable 1 bed flat I could not of taken in lodgers, and would have needed to move house at a cost of about £10000 which would be reflected in my equity now and a bigger Mortgage. Side issue, Stroke of luck (or MotleyFool advice!) I remorgaged just before Xmas to a Base rate Tracker +0.48%, and have seen 3 rate cuts passed on immediatly saving me over £100 per month ... which is very welcome to cover all the other increases going on at the moment. Anyway the point is, where there is a will and some lateral thinking, and a good deal of hard work and doing without it is acheivable. Just do it.

soconnel: This is very good advice,and its what my parents told me 30 years ago.

"First time buyers - save,save and save for a deposit! Yes - you'll have to forego the foreign holidays, the flash car, the take-aways and going out all the time but we've all done it. Also, be realistic about what you can afford to buy - you may want a 3 bed house but can only afford a 1 bed flat. Try using second hand shops to furnish your property and replace as and when you can afford it. It is not compulsory to have a DVD, CD, HD TV etc with Sky so cut your cloth accordingly "

Half the fun was having to make do for a few years, unfortunately the 18-30's these days want everything and all at the same time.

If you smoke stop immediately, if you drink restrict yourself severely,if you both have a car consider getting rid of one of them.

Just accept that a lot of sacrifices have to be made if you really want to get on the property ladder or even rent a place.

Unless your parents are super-rich don't expect them to help you raise the funds or act as guarantor, rather stay living at home for longer and keep saving. You will get there in the end and you will have learnt how to manage money by waiting.

I'm in the process of buying my first house and have found it hard. Strangely even though me and my partner are currently earning almost £30k a year as PhD students, with excellent job prospects afterwards (science subjects) no bank would lend us any money. As we didn't fancy wasting 3 1/2 years paying a landlord we asked our parents to act as guarantors. Luckily they agreed, but only after we had showed them all the calculations to show we could afford the house.
We were fortunate enough to have been able to save our student loans through our undergraduate degrees by living off what we earned. Now we have a 22% deposit and should be able to re-mortgage when we get "proper" jobs so that our parents are no longer guarantors.

I'm glad the 100% mortgages have gone as it should teach people these days that they have to save for something they want. I just wish that they would consider individual circumstances more than just the figures / criteria they see infront of them.

I find these sort of comments fascinating. Many of these people ranting about first time buyers, and how they need to stop overspending are a little out of touch to say the least. As has already been pointed out, house prices have gone mad, while inflation (which doesn't include house prices) linked pay has climbed slowly. So the £60,000 house that you could buy a decade ago is now "worth" more than twice that, whilst wages have risen at a much slower rate.

As a matter of interest, it seems that by and large, the people who have benefitted most from the house price boom are over the age of 35, who co-incidentally, recieved a FREE university education, cheaper housing, and will recieve a state pension. Oh, and now own all the "buy to let" properties, so would not mind awfully if we youngsters were unable to get on the housing ladder and had to rent from them for a few years.

I'm 23, and after 5 years of medical school, £40,000 of student loan debt, and a lot of hard work, I don't think its unreasonable that I should be able to purchase a home. I may have to scrimp, I may have to save, but it should be possible, right? Seems I was born 20 years too late...

DianeCossie is so right. Education about finances at a younger age is vitally important. If you show any ability at school the only advice you get is 'go to university and get a degree' what those people don't seem to realise is that degrees don't mean what they used to. They no longer guarantee a job offer at the end. If I had known back then that all a degree would give me is debt and four years of lost earnings, I would have got a job straight out of school and would probably own my own house by now rather than being almost 25, a teetotal, non-smoker who is very careful with money but still struggling to save a deposit. (Whilst working two low paid jobs, one to gain the experience that my degree didn't provide and another that is the only one flexible enough to fit around the first.)

I agree with bodwod and other's similar comments above - my parents were working class, struggled hard but still could afford their own home - I have a PhD and two well paid jobs (a day job and I lecture in the evenings) but now have to live, in one room with our young baby, with my in-laws whilst we try and raise something near to the £25000 deposit you need to afford a 2 bedroom flat in London . . . how we are going to afford the payments on a mortgage once we find a place plus the childcare fees of £60 per day I'm not sure . . . it seems to me that something needs to be done for (not so young!) professionals like us who don't qualify as 'key workers' but still have some apparently impossible financial hills to climb before we can get a home of our own . . .