First-time buyers: Clubbing together to get on the property ladder

With the cost-of-living crisis eating away at savings, and the year-on-year inflation-busting rises in the average price of a home, it's hardly surprising that first-time buyers are having such a poor time trying to get on to the property ladder.

While the government is considering the idea of '1% deposits' for first-time buyers, there is a number of experts who consider this bad news for the housing market as a whole.

As a consequence, first-time buyers are having to consider many other ways of getting a foothold in owning property.

According to analysis of the market by Halifax, first-time buyers are now increasingly looking at buying a property as a group rather than individuals, thereby pooling their financial resources to better afford a place to call their (collective) own.

The findings by Halifax's analysis show some interesting trends:

• Of the mortgage completions at Halifax, it shows that combined groups of first-time buyers now account for almost two-thirds of the applications.
• At the same time, over half of the home loans taken out comprise first-time buyers.
• Of the types of property, it is the choice of a flat that is increasing in popularity with first-time buyers, while terraced housing is becoming less popular.
• There is some good news for the average house price for first-time buyers, though, as Halifax says it has come down by 5% over the year (to £288,136).
• The average property value for a first-time buyer means that they are now around 6.7 times the average salary.
• According to the Halifax statistics, the most affordable place in the UK in which to buy the first home is Inverclyde in Scotland.
• The average age of a first-time buyer is now 30 years old.

It's understandable that similar-minded buyers are considering the value of clubbing together to purchase a new home together, although it raises some interesting legal questions for the conveyancing process (even more so at the point of eventual sale further down the line). However, certainly none of this is insurmountable.

Kim Kinnaird, Mortgages Director, Halifax, said: 

“Following a record year in 2021, unsurprisingly in view of the wider economic environment, the number of first-time buyers joining the property market fell again in 2023 to around 293,000. Despite this drop, new buyers made up over half of all home loans. 

“However, to get a foot on the ladder most people are now buying for the first time in joint names.

“There are a number of schemes available to support first-time buyers, like the mortgage guarantee scheme, which allows us to offer up to 95% mortgages to first-time buyers and has been extended until June 2025. 

“Alternatively, the First Homes scheme offers discounts on new-build homes to first-time buyers, while shared ownership options allow new buyers to purchase some of the property and rent the rest.

“The overall fall in house prices we saw in 2023 will go some way to helping people get on the ladder for the first time - but these buyers are still dependent on a steady supply of properties in their price range, while they are faced with the continued pressure of saving for a deposit, when rent and living costs are high.”

Multiple ownership is nothing new to the legal transfer of ownership from seller to buyer, but there will be extra work required to ensure all the details are completely ironed out and that all the necessary legal checks into the individuals concerned are completed, thus protecting all parties involved.

If you are considering this as a potential solution to your home-ownership issues, you will need to look for quality conveyancing service with a solicitor who is focused on delivering the conveyancing for you.

In particular, given the reasons for treading this particular path of joint ownership, you'll no doubt want to protect every available penny. So, you should ensure you choose a conveyancer that offers a fixed fee, and that you are protected by a ‘no completion, no fee' guarantee.

That's where Homeward Legal can really help with affordable but quality conveyancing services! 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, and will work hard to complete the process in as short a time as possible. 

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.