It's no secret that it can be really difficult to buy your first home - according to the latest figures published in the UK House Price Index, the average home now costs just under £225,000, or a remarkable £482,000 in London.
While it might seem like a mammoth task in the current market, getting on to the property ladder isn't impossible. Here's how you can do it with a reasonably small deposit.
Whether you're buying a studio in Burnley or a suite in Belgravia, there's no such thing as an 'average' home - as the data will always be skewed by the lowest-cost areas and the playgrounds of the super rich.
But for argument's sake, Land Registry data shows the average property value in the UK was £223,257 in June.
So, to buy this 'average' home, you'd first need a deposit, and then have enough cash left over to cover the following:
For the purposes of this article, we've left out more subjective costs such as removal fees (free if you do it yourself, £100 for a man with a van or £1,000 for a full packaging and removal service), and mortgage fees (which can range from nothing to a couple of thousand pounds).
Consider a 100% mortgage
The risky 100% mortgages that were common before the financial crisis are very much a thing of the past, but there are still ways to buy a house with no deposit.
|Deposit required||None, but you'll need help from a family member. You'll also need to ensure you've got enough to cover the additional costs discussed earlier.|
|Purchase limits||Through Barclays, properties up to £500,000 are permitted. If you have the earnings to secure such a big mortgage, you might be best pursuing more traditional options.|
|Suitable for...||First-time buyers with no deposit searching for a low-cost home in a cheaper area|
Help to Buy equity loans
Help to Buy allows you to buy a new home with a 5% deposit. The government then lends you a further 20%, meaning you only need to get a 75% mortgage.
|Deposit required||5% - or £11,163 for the average priced home. Add in the additional costs, and you'll be just over the £15,000 target by a couple of hundred pounds|
|Purchase limits||Properties priced up to £600,000 - although you'll need a household income of £100,000 to buy a home at this level.|
|Suitable for...||First-time buyers with small deposits who want to live in a new-build home.|
Shared ownership schemes
If you're looking to get a foot on the ladder in a more expensive market, it might be one of the best options available to you.
A note of caution, though - within a 20-mile radius of London earlier this year, we found that the combined monthly mortgage and rent repayments would be unaffordable for most young people in the capital.
|Deposit required||5% - the average London home costs £481,556. A 50% share would cost you £240,778 - meaning a deposit of £12,038. A minimum 25% share (if available) would cost you £120,389 - so you'd need a deposit of just £6,019, leaving plenty of head-space for the additional costs.|
|Eligibility||You'll need to have a household income of less than £80,000 (or £90,000 in London), but you'll need enough to cover your mortgage, rent costs, and .|
|Suitable for...||Buyers with small deposits in expensive areas|
When you exchange contracts to buy a house, you'll usually need to pay a 10% deposit to seal the deal.
Of course, if you only have a 5% deposit, this can pose a problem. In this instance, your solicitor will need to reach an agreement to reduce this with the seller.
If you're up-front from the onset, an agreement should be reached. Sales rarely fall through after exchange of contracts, and by having a in place you should have done enough to prove your financial viability.
Alternatively, on occasion it can be possible to exchange and complete on the same day, thereby removing the need for an exchange deposit.