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  • Writer's pictureJamal Kroll

5 Ways First Time Buyers Can Buy a House in the UK

Updated: Apr 5

5 Ways First Time Buyers Can Buy a House in the UK

5 Ways First Time Buyers Can Buy a House in the UK

If you’re hoping to get your foot firmly on the UK property ladder, this article is for you! We’re going to discuss 5 ways a first time buyer can buy a house in the UK. Whether you’re thinking ahead or ready to take out your first mortgage as a first time home buyer, don’t do anything until you’ve read this!

So, let’s get started, here are 5 ways a first time buyer can buy a house in the UK.

1: Gifted Deposit for First Time Home Buyer

If you’re lucky enough to be gifted money towards your first house, this is known as a gifted deposit. Often parents give their children money to help towards a 10% deposit for a house, or in some cases people inherit a sum of money from grandparents or relatives. This helps first time home buyers purchase their first house and get a competitive mortgage too.

5 Ways First Time Buyers Can Buy a House in the UK

2: Springboard mortgages

If you're trying to get onto the UK property ladder, a springboard mortgage might be for you. This type of mortgage allows family or friends to help you secure your first mortgage. In fact, a springboard mortgage means that a first time buyer could technically get a mortgage with no deposit whatsoever.

To replace the deposit that you’d normally put down for a house, your family or friends puts 10 percent of the property price into a savings account. Over time, the money will earn interest. This works as a holding deposit, and as long as you meet your mortgage repayments, your family members or friends will get their money back, along with any interest earned.

3: First Time Buyer Mortgage Advisor

If you’re a little confused when it comes to applying for a mortgage, you should look for a first time buyer mortgage advisor. In the UK, a standard deposit is around 10% of the property price, but the right first time buyer mortgage advisor can help you to find a great mortgage with the best deal for a new buyer. In fact, they could even help you to secure a mortgage with as little as 5 percent deposit.

5 Ways First Time Buyers Can Buy a House in the UK

4: Saving up for a Deposit as a First Time Buyer

If you don’t have the luxury of a gifted deposit and springboard mortgages aren’t for you, you can still save for a deposit to buy your first house. As a first time buyer, you often only need 5 percent of the property’s value to get a mortgage. However, many first time home buyers save more than this in order to put down around 10 percent. Putting down more money as a deposit on your first home, helps you to get a more competitive mortgage and usually lower monthly mortgage repayments. Start by putting aside some money each month, cutting down on unnecessary expenses such as luxury items and dining out at restaurants and you’ll soon be on your way to buying your first house.

5: Gifting Property to First Time Home Buyers

To get children straight onto the UK property ladder, families can sign over property to their relatives. In the UK, gifting property to your children is a great way of helping first time buyers to get onto the UK property ladder, but it’s not always easy. You may find it useful to find out how much you can borrow using our online mortgage calculator.

If you sign over your house to your children, you may face inheritance tax! Yet there are ways to minimise this considerable expense. If a property is gifted to children and the previous homeowners, usually the parents, live for 7 years or more and choose to move out, inheritance tax can be reduced and significantly minimised. You can also choose to keep living in the property, even if your child is now the homeowner, but this could mean paying inheritance tax.

If you are a first time buyer in the UK, there are plenty of ways to get your foot on the UK property ladder. Property continues to be a sound investment opportunity and there is no better feeling than owning your own home!

If you would like more information - speak to one of our Cardiff Mortgage Advisors who will be happy to assist