A different way for first-time buyers to get on the property ladder

For the first-time buyer today, the thought of getting toehold on the very lowest step of the property ladder can be very daunting.

It's not so much the availability of suitable housing stock, although that is an issue that the Government is planning to address by building 1.5m homes in the current parliament. Rather, it's the increasing problem of affordability. 

The issue is one of rampant house price increases. Halifax produces a monthly index that monitors the rise in average prices relative to start point (set at January 1992). Since that original date, house prices have risen by a staggering multiplier of almost five.

This puts first-time buyers in a particularly sticky position. We talked about the options facing the new recruit to the homebuying business back in August. At that juncture, we also covered one of the preferred options for a newcomer to the housing market to adopt, which was to accept help from the fabled “Bank of Mum and Dad”.

Since then, Lloyds Bank has carried out new research into what first-time buyers are thinking and how they view some of the options that are open to them, particularly when it comes to “non-traditional” methods of jumping onto the property ladder.

These include purchasing with a sibling or a friend, which accounts for nearly half of those questioned (22% and 24%), although the majority (62%) would still prefer to purchase with a partner. However, because of the affordability problem, and providing they trust and respect their chosen sibling or friend, the number of those looking for these different options is increasing.

Interestingly, this was underpinned by 48% of first-time buyers not wanting to go down the route of borrowing from their parents because of the feeling of shame they'd feel (against 34% who would feel comfortable).

Because of this move towards the more unusual options, Lloyds Bank worked with psychologist and relationship expert Jo Hemmings to pick up some tips on what to look out for before plunging into a partnership to buy a property:

• The first thing to recognise is that the relationship between those planning to buy a home together will change. Hemmings advises that key to such plans is to discuss the details, including what it will mean now and in the future. She also advises to discuss important things like pet ownership (including the larger animals such as cats and dogs), the playing of musical instruments (particularly if they are especially loud), interruptive hobbies such as listening to music or gaming, and rotas for general household chores such as cleaning the bathroom of washing the dishes.
• Next, draw up a legal document detailing the co-ownership relationship, particularly where there isn't parity in the money that has been put in and therefore what that implies for the share of the equity in the property when it comes to selling the property. 
• Discuss between those involved in buying a home what the requirements for a property are. As Hemmings points out, people are different and their priorities will not necessarily match up with others involved in the plan. And it is critical to define who has ultimate decision-making responsibilities, or if there is to be joint input how such judgments are made. Be clear about these roles and responsibilities at the outset to avoid arguments further down the line, especially after you've completed on the property.
• Conflict will inevitably arise, irrespective of the relationship between those involved. Hemmings confirms that the wisest way of dealing with conflict is to discuss them when they arise rather than letting them fester.
• Hemmings also gives the best advice with regards to an exit strategy. Because life changes and can't be relied on to remain the same as the point when you bought the house with your sibling and/or friend, it is important to think about and document what the exit strategy might look like should one or any other decide that they want the agreement to end.

You can read the full article from Lloyds Bank here.

When it comes to the time when you're ready to buy a new home, whether you are buying with a partner, a friend or your sibling, you'll want to ensure all aspects of the purchase are adequately and completely covered, including the legal aspect of shared ownership. And you'll no doubt be looking for a high quality service at a competitive price.

That's where you can rely on Homeward Legal! 

They will start work on your planned purchase (and/or sale) as soon as you agree to the quotation and appoint them to represent you. 

Homeward Legal will also provide a quote that will not change - what you are quoted is what you pay for standard conveyancing process.

There are some unforeseen items that might arise during the purchase and/or sale, but the solicitor discusses these and their cost as they come up. 

In addition, to protect the homebuyer further, Homeward Legal operates a ‘no completion, no fee' promise, which ensures that, should the purchase or sale not go through as planned to completion status, no payment is required.

Call  to get your conveyancing quote started, or to discuss your concerns with your plans to move.

Or you can get a quick quote, using Homeward Legal's easy-to-use quote generator.