4 Hacks for Buying Your First Home Alone

Are you looking to get on the property ladder but planning to buy alone? Purchasing a home alone can be challenging, but is not impossible. In this article, you’ll learn four hacks for buying your first home alone.

Buying Your First Home Alone
Photo by Kara Eads on Unsplash

More and more people want to step onto the property ladder, especially those who are renting alone or are planning to live alone. After all, a single person’s rent can be extortionate in comparison to a single person’s mortgage. But, the problem isn’t with the mortgage repayments, it’s often the initial deposit that’s hard to put together.

One hack we’re going to talk about is shared ownership, which is one of the best ways for an individual to purchase their first home. But, it’s wise to keep in mind that it’s very different from your normal first home purchase, especially the conveyancing for shared ownership which can be slightly more complicated.

To learn more about the four hacks for buying your first home alone, keep reading…

How Much Deposit Do You Need for Your First Home?

When purchasing your first home, it can be difficult to know exactly how much deposit you realistically need. Most often, it will depend on the price of the property, but there are other factors to consider, such as the amount of mortgage you can get depending on your income. Often, most people will aim to save 10% of the property price, but a single person may require more, especially if their income is less.

Money Helper can provide further information as to how much deposit you will need for a mortgage.

How Much Mortgage Can You Get?

How much mortgage you can get will depend on a number of different factors, such as how much money you earn, what your monthly outgoings are, and often who you pick as a mortgage provider.

Generally, you can expect most mortgage providers to offer between 4.5 to 5 times your salary. So, for someone who earns £28,000 a year, they might be able to get a mortgage between £126,000 to £140,000.

You can use the Money Helper mortgage affordability calculator to figure out how much you can borrow, in addition to what you will have remaining each month.

How Can You Purchase Your First Home Alone?

1. Choose a Smaller Property

It’s easy to want the best property you can possibly get for your first home, but buying alone can be difficult and very expensive. It’s important to be realistic about what you can afford and what is suitable for a single person.

If you are the only person planning on living there, do you need anything bigger than one bed? Is it a house you need, or does it make more sense for you to purchase a flat or apartment which could be significantly cheaper?

2. Consider Shared Ownership

Buying Your First Home Alone
Photo by Hernan Lucio on Unsplash

Shared ownership is a government scheme that helps young people onto the property ladder, especially if you aren’t planning to purchase your first home with another person.

How shared ownership works is that you will purchase a share of the property, often between 10% and 75% of the property value. The remaining share of the property will be rented from the housing association, local council, or a different organisation, who will be known as the de facto landlord.

Depending on the de facto landlord, you may have the ability to purchase a further share of the property. This means you could own the property outright in the future.

3. Ask For Family Members to Help

We recognise that not everyone is fortunate enough to have this option available. But, if your parents, grandparents, or other family members can afford to and are willing to help you purchase your first home, asking for their assistance can be a great way to contribute towards your deposit. Whether you pay them back in the future or keep the money as a gift is down to you and that person.

A different way that a parent or grandparent can help you towards purchasing your first home is by doing a guarantor mortgage. What this means is that the guarantor will cover the cost of your mortgage should you be unable to make the payment back. A guarantor mortgage is ideal for those individuals who have a lower deposit saved, less reliable income, poor credit, or something else that could impact the mortgage repayments.

4. Be Strict with Your Spending

It’s easy to spend money aimlessly, but if you’re serious about purchasing your first home alone, then you need to be careful about how you’re spending money. The best way to be careful with spending is by creating a budget.

There’s one budget rule that a lot of people recommend doing, and that’s the 50/30/20 rule. This is where:

  • 50% of your income goes on needs, such as your rent, bills, and anything else that you have to pay.
  • 30% of your income goes on your wants, for example, clothes shopping.
  • 20% of your income goes straight into your savings.

This rule may not work for you because 50% of your income on needs might be too much, especially if you’re living at home and not paying rent or bills. So, you could perhaps swap the 50% and the 20%, but this all depends on your personal circumstances.

Buying Your First Home Alone Doesn’t Have to Be Impossible

Buying Your First Home Alone
Photo by NORTHFOLK on Unsplash

It might feel like you won’t be able to afford to purchase your first home alone, but what we can conclude from this article and the hacks provided is that it isn’t impossible to do. There’s no doubt that it might take a long time to save up, especially if you have a large deposit that needs to be saved. But, if you budget correctly, look for houses that you know you can afford, and research the government schemes available, it is possible.

Have you purchased your first home alone? What are your top tips for others looking to do the same? Let us know in the comment box below.

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