How to get on the property ladder

Buying your first property is an exciting time in your life and a hugely significant landmark.

Owning your own home provides new freedoms and is a financial asset that will only continue to increase in value.

But the process of getting onto the property ladder can be a daunting one, especially in these difficult economic times that are causing uncertainty around house prices and fluctuating interest rates.

House prices fell for a fourth straight month in December as fears over the cost-of-living crisis and the impact it has on household bills continues to make buyers cautious.

With that in mind, here are some things to consider as you try to navigate a route to home ownership.

Ensure you have the deposit and additional funds

The most essential tip for any first-time buyers is start saving.

Most banks will offer 95 per cent mortgages, so as a minimum you will need a five per cent deposit on the value of the home you are wanting to buy.

These high-percentage mortgages come with their pitfalls as they tend to have higher interest rates, while your monthly repayments will be higher. The bigger a deposit you can put down, the lower your monthly repayments will be.

But there are other things to consider outside of the deposit. Solicitors' fees and surveys are expenses to budget for, as well as having money to furnish your home.

Do not rush into agreeing a mortgage, make sure you are financially stable. Perhaps you can stay living at home a little longer or cut back on things like takeaways and coffees to boost your savings pot.

Keep up to date with your credit score

Any lender will assess your incomings and outgoings before deciding how much money they are willing to lend you.

This is known as the debt-to-income ratio and the lower this is the less risk you will be viewed as by the bank.

So before you apply, try to tie up as many debts as possible as doing so will improve your credit score.

Things like making sure you are on the electoral roll, keeping up with any monthly repayments, and closing things such as unused mobile phone contracts and paying off credit cards will also boost your score.

Be realistic about what you can afford

If you require some assistance when trying to get on the ladder then consider speaking to a mortgage advisor, who will break down what you can realistically afford.

Do your research about what help is available for first-time buyers, such as ISAs and government schemes, and ensure you have a secure job so banks will view you as less of a risk.

Additionally, if you want to get onto the ladder with the intention of later renting these properties out then speak to a letting agency for help and advice.

Consider also using a mortgage calculator to get an idea of what you will be required to repay, and don't forget interest rates can change so bear in mind the impact it will have on you if your monthly repayments go up.