How Getting Onto the Property Ladder Can Save Money

Written by Karen Bryan

housesSometimes getting on the property ladder in the UK can seem like an impossible dream.

It can be hard to save up a deposit and to find the right property at an affordable price.

While renting a home gives you flexibility, paying rent for decades can end up costing you a lot more than owning your own property.

There are some initiatives to help first-time buyers. With the Government Help To Buy scheme, you may only need a 5% deposit to purchase a property. There’s also the Help To Buy ISA, whereby you can save up to £200 a month, with the Government boosting your savings with £50 for every £200 saved, up to a maximum bonus of £3,000.

Shared ownership is another option. It allows you to buy a percentage of a property and to pay rent on the remaining percentage to a social enterprise organisation such as Gentoo. You may then decide pay more to increase the percentage of the property which you own, called staircasing, until the property is 100% owned by you.

We bought our first property, a one bedroom flat in Upton Park in east London, in 1981, a year after we got married. The flat cost £17,000.

We visited a lot of estate agents; there were no property websites in those days. And we spent many weekends looking at various flats. Most were in a pretty poor state of repair. As neither of us were any good at DIY, we wanted something that was ready to move into.

As soon as we saw it, we both really liked the flat that we bought. That’s because it had a lovely, light living room with a bay window and a feature fireplace, plus a kitchen diner with space for a decent sized table.

As were renting, we were keen to proceed quickly with the purchase, which also suited the vendor. The vendor agreed to include some of the furniture in the price, which saved us quite a bit of money and hassle with deliveries.

We had £5,000 in savings to use as a deposit. However, it was quite a daunting, formal process to get a mortgage for the remaining £12,000. We both had to attend a meeting with the manager at the Halifax Building Society with proof of earnings.

Within a couple of months, we had moved in. It felt like our real first home together.

We used any spare cash to pay off the mortgage, which greatly reduced the amount of interest that we would pay.

We are really glad that we got onto the housing ladder early in life. When we sold that flat in London, we moved back to my native Scotland. This was mainly because property prices were (and still are) much lower there.

We moved several times to more expensive homes. Initially taking out a mortgage, but paying it off as soon as possible. When our sons left home, we downsized to reduce our living costs.

Not having to shell out for rent or mortgage costs every month, makes early retirement a possibility for us.