How to get on the property ladder as a first-time buyer

Getting on the property ladder as a first-time buyer can be daunting. For many, you’ve been dreaming of the day you will pick up your keys to your first home. As UK house prices continuing to rise, owning your own home is far from easy, but it is possible.

In 1981, nearly one in three 16-24-year-olds was a homeowner. By 2016, it was one in 10. Meanwhile, the proportion of renters in younger age groups has increased by 14% among 16-24-year-olds since 1996. 


However, by planning, research and following our tips below, one day you could have a home that you own.

Firstly, you need to make a plan of action together so that you can break out of the rental cycle. When you have a mortgage, every payment means you are a step closer to owning the property outright. With renting, you are ultimately paying your landlord’s mortgage or providing him with a monthly income.

What do you need to do to get on the property ladder as a first-time buyer?

Pay off your debts

Take a look at your credit card, store card, overdraft and any other debts and write down how much you owe on each. Make a list of your monthly fees to paying off your debts. Once you have this information, it might be worth looking at considering a consolidation loan to pay off everything you owe.

Make a list of ‘available income’, for example, work out what you have left each month after paying your essential rent and utility bills and everyday living costs (food, petrol etc).

Make a list of your ‘luxury items’ that you spend money on and see if you can cutback on any of these. For example, takeaways, expensive nights out, subscriptions.

Secure your job status

Mortgage lenders seem to prefer individuals with steady jobs as opposed to the self-employed. Make sure you have secure employment as this will help when you start completing mortgage applications. Most lenders will want to see you have been with your current employer for a reasonable lent of time, e.g. at least six months, before applying. If you are thinking of switching jobs then maybe wait until you’ve got your mortgage in place.

Check your credit score

Before you apply for any mortgages, check your credit score. If you need to boost this score there are lots of ways to improve it. For example, clear outstanding debts, pay your bills on time, check you are on the electoral roll.

Make a plan for your deposit

Having a larger deposit will help you get on the property ladder as a first-time buyer. The more deposit you have the more choice you will have when it comes to best-rate mortgages.

If you can’t raise all the money for your deposit, then maybe consider buying a property with a friend or partner in the same boat. This could boost your chances of getting a good mortgage deal. Make sure you have a plan of action for the future if one of you decide that you wanted to move.

Another option to consider is a ‘gifted deposit’ from a family member or the ‘bank of mum and dad’. You will have to prove that the money is a gift and not a loan. It is important to note that if the person who gives you the money dies within seven years, you will have to pay inheritance tax on it.

Research first-time buyer schemes

Some of the options available to help you get on the property ladder as a first-time buyer are:

  • 95% mortgages. Re-introduced by the government in April 2021, these require a lower deposit of 5% of the property price and are now offered by a range of lenders.
  • 100% mortgages. These do exist if you have no deposit, however, they are usually dependent on parents agreeing to keep a percentage of the purchase price in a separate savings account with the mortgage lender.
  • Mortgage guarantee scheme – announced in the March 2021 budget, this scheme aims to help first-time buyers who’ve managed to save a 5% deposit but need some additional help to get on the property ladder. This scheme is scheduled to run until December 2022.
  • Help-to-buy scheme. Due to run until 2023, this is a loan from the government that you put towards the cost of buying a newly built home.
  • A lifetime ISA. If you are a first-time buyer aged 18 to 39, you could get up to £32,000 from the government by opening a Lifetime ISA (LISA). You can save up to £4,000 a year. Then the state will add a 25% bonus on top if you use it towards your first home.

Find a mortgage broker that can help

If you are struggling to get on the property ladder as a first-time buyer, then speak to a mortgage broker, like us, that can help. Not only can we search for deals that are not available on the open market, but we can also help you improve your chances of being accepted for a mortgage. We know the best mortgage lenders that are suited to your personal circumstances.

If you are trying to get on the property ladder as a first-time buyer, you have the most to gain from our mortgage advice service. The process is new to you and we can hold your hand through the whole process. A mortgage adviser can boost your chances of success and this is key because every unsuccessful mortgage application may harm your chances in the future, as each refusal will appear on your credit record.

Why not use our Mortgage Calculator to find out how much you could borrow and how much it might cost per month. If you have any further questions, then please do not hesitate to get in touch.

*Your home maybe repossessed if you do not keep up repayments on your mortgage.

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