A guide for taking your first step onto the property ladder

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by Kay Murchie

According to the Land Registry, those saving to step onto the property ladder have witnessed the cost of their potential first house rise by 10% over the past 12 months. Rising interest rates and significantly increasing house prices has meant harsh times for first time buyers.

With interest rates soaring 1% to 5.5% in the last 10 months, it is important that first-time buyers know the market.

1. Research your area
Research online house price finders to find out how much properties have sold for recently. Useful sources are thisishouseprices.co.uk and nethouseprices.co.uk

Also research your local property guides and find out how much properties are selling for currently. Websites findaproperty.com and primelocation.com provide a list of properties for sale in your area.

2. Understand the terminology
Property terminology can be difficult to understand for the inexperienced. Never be afraid to ask if you do not understand something. Spend some time finding out what the terms mean, you will gain more confidence in what you are doing. Detailed information about the homebuying process can be found at www.thisismoney.co.uk/propertyguides

3. Find out what mortgages are on offer
Understand the range of mortgages on offer to first-time buyers as the options can be confusing. Fixed rate deals are common amongst first time buyers as they need security against interest rate rises.

An interest-only loan can be inexpensive but it does not pay off the cost of your home. A repayment mortgage is a good choice but it is advisable to look around for the best deal which suits your circumstances.

4. Do not exceed your limit, stick to a budget
In addition to your mortgage, save approximately £200 - £250 per month for household bills and food.

You may be tempted to borrow as much as you can in order to obtain your ideal home. You must stick to a budget and do not exceed your limit.

Owning a home can be costly and you must set aside money for home insurance, council tax, utility bill and any hidden costs such as major repairs to your home.

5. Try to negotiate
Remember, it is an estate agent’s job to get the highest amount possible for a property. Do not be afraid to barter, most first-time buyers are afraid to negotiate.

The general consensus is to offer 10%-15% below the asking price and then raise by £1,000 each time.