How to Get On The Property Ladder: If You’re a First-Time Buyer.

Arc Property Solicitors recently read an article about a couple of friends who combined their savings and with a little help from their families raised a deposit for a new home. The concept dubbed as ‘mates mortgages’ is not unique as more and more first-time buyers are finding themselves having to find innovative ways to get around limitations caused by restricted mortgage lending.

With an increasing number of people finding it difficult to get on the property ladder and the prediction that the flat-sharing population will reach 3 million by 2013 would be home-buyers may have to consider ‘buddying up’ with a friend to buy their home.

Before you commit to anything make sure you have everything in place and agreed up front. Trust will be at the forefront of a decision like this and you should ask your solicitor to draw up a trust agreement to cover any potential issues such as; what would happen if one person wanted to sell, profit splits, fall outs and so forth.

So, if you are a first-time buyer what can you do to improve your chances of buying your first home and managing payments?

First-time buyer tips:

• Ask family members for help raising a deposit
• Consider buying a home with a friend
• Buy at auction
• Shared equity schemes
• Seek out Housing Developers
• Rent out a spare room in your new property

Kate Faulkner, author of property guides for Which? Commented on why she thinks buying with friends and family is a credible idea:

“”People are recognising they can tackle the affordability issue through buying with friends, while shared ownership can be a viable option,” she adds.”I also love the fact that families are pitching in together, such as buying properties with an annexe where the parents can live.”

Housing minister, Grant Shapps thinks that mortgage lenders should embrace ‘mates mortgages’ by making it easier for friends to buy homes together:

“If there are mates who are perfectly capable of paying monthly mortgage payments, but are struggling to fund a deposit on their own, there should be straightforward options to unit with their friends and take the first step on to the housing ladder together,” he said.”

Specialist companies like ‘Share to Buy’ offer a web-based service for graduates and professionals helping them buy shared ownership homes making property more affordable and achievable.

Would you consider buying a home with a friend or family member? Please tell us what you think by commenting below.