With house prices rising and student debts ever increasing, Arthur takes a look at how students can get onto the property ladder.
Students need approximately £23,000 budget to get onto the property ladder. The Office for National Statistics (ONS) found that on average, a first home in the UK costs £140,000, with costs including stamp duty, deposit, legal and moving costs.
Students are leaving university with over £40,000 in debt and many won’t even think about buying their first home for a number of years. There is also the added pressure of the unforgiving job market in the UK, which can be demotivating for those trying to find work and save money for a mortgage/deposit. Instead, many end up wasting money renting or living at home until they have bit of savings to start off. However, this does not have to be the case and there are a few ways to own a property sooner than you think!
It starts with the first step (duh)
Firstly, there is a ”Buy For Uni” mortgage system offered by the Bath Building Society and the Loughborough Building Society- this ensures 100% financing for a property purchase, as long as close relatives can provide security. Students can receive a £300,000 maximum loan, if they live within 10 miles of their University. Students can rent out rooms in their property and can possibly think about making the sitting room into a further bedroom so they can earn extra revenue.
There is a ”Starter Home Scheme” that allows buyers 40% off new home purchases if they are under 40, currently around 200,000 new homes are part of the programme.
Another important factor is location. Graduates are now house hunting beyond London and viewing properties on the coast and up North which are less costly. This is a great way to buy more space for your money and not gasp at the costly London prices where you will get less for your money.
Finally, the majority of us rely on the ”Bank of mum and dad’.’ This helps many students to buy their first home and provides the experience of buying a property and finance necessary to purchase a property in their name.
There is positive news in terms of recent first home property purchases, research shown by Halifax indicate more entry level buyers bought a house in 2016 that in any other year since the financial crisis in 2007.
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