How I Think More Young People Can Get on the Property Ladder
Contributed by Roland John
As a young person that was able to get on the property ladder without the help of family wealth or a loan from my parents I thought it was a good opportunity for me to give my opinion on whether getting on the property ladder is actually impossible.
I've listed some of my views below for how I think more young people can get onto the ladder:
Less emphasis on London
I agree that getting onto the property ladder in London is extremely difficult, however, I believe that less emphasis on living in London is needed; there are plenty locations just outside London that are significantly cheaper.
I am personally a big fan of areas just outside of London such as Reading, Havering Borough (Romford and Harold Wood in particular and Redbridge Borough (Chadwell Heath and Ilford in particular).
- All of the places listed above are along the new Elizabeth Line (Crossrail) so there is scope/potential for high house price growth in the future.
- Prices tend to be much cheaper around these areas e.g. You can get a one bedroom flat for under £250,000 in most of the areas listed above)
- Transport links are great. E.g. The new Elizabeth Line route will allow you to get from Romford to Bond Street in just 35 minutes!
(If you’re one of those people that say “I want to buy a house and rent it out” you may even want to look further afield such as up North. Houses are significantly cheaper, and the government are investing vast amounts of money to boost the Northern economy) – I would advise you to read up on the Northern Powerhouse.
Is buying a property really a priority of yours?
I am not one of those people that feels that everybody should prioritise buying a property. However, I do come across many people that say getting on the ladder is a priority of theirs, however, their actions do not match their words.
I’ve seen the news stories about how young people should give up buying avocados and fancy coffees, whilst I don’t think this will go a long way in helping young people get onto the ladder, I do think curtailing the bigger purchases will make a big difference. “Don’t be pennywise and pound foolish.” as my mum always says.
Growing up there were certain things that I knew I needed to sacrifice to get on the ladder. (I’m sure some of you can relate e.g. buying an expensive car, party holidays, buying champagne, buying designer clothes etc.) I’m not saying you shouldn’t do any of the above but balance is key. Don’t just say saving for a house is your priority, show it is!
Start saving from a young age
Prospective home buyers need to take responsibility for saving from a young age. If most 24/25-year olds started saving whilst they were 17/18 they would probably be in a position now to put a deposit down on a property. The earlier you start saving the better. I always urge young people to have a good work/life balance when it comes to saving. You can still enjoy holidays and “SOME” of the finer things in life whilst saving. Once again, balance is key!
The unfortunate truth is that you may need to find a higher paid job if you want access to a bigger mortgage. This is much easier said than done but not impossible. Aim high and apply for jobs that pay you what you deserve to be paid.
My salary jumped from £20,000 to £35,000 after leaving my first job after university. At the time I was reluctant to look for jobs paying significantly more than my current role, after all, who would pay a 22 year old £35,000 a year ?? Nevertheless, I aimed high and applied and got the job. If I didn’t aim high I would probably have ended up with a job paying £25,000 a year and no doubt I wouldn’t be as far into my property journey as I am now.
Knowledge really is power
Less complaining more educating... Educate yourself about how property and mortgages work; don't let negative media headlines decide whether you can or can’t get onto the ladder. As a co-founder of Property Cohort, I always try my best to post positive news about the property market (funny thing is; it’s the negative news that gets the most engagement)
A lack of knowledge and negative media stories can make you think that getting on the property ladder is impossible when it is actually very possible to do. I would highly recommend having a look through the Property Cohort Blogs and educating yourself on all topics. Hopefully you’ll be pleasantly surprised to find out that getting on the ladder with the right support and knowledge is actually achievable.
Be creative in order to get a bigger mortgage
Access to a big enough mortgage is one of the biggest issues when looking for a property.
Some options that may be worth exploring are:
1. Buy together
Partnering up with a friend, partner or relative and buy a place together. Two salaries are better than one! (Property Cohort blog on the pros and cons of buying with a friend).
2. Get an additional job
Get a 2nd job to boost your income therefore boosting the amount lenders will lend you. (Have a chat with a mortgage adviser for guidance on how this will work)
3. Ask your family for help
A lot of people have parents / family members that have disposable cash available or 2nd properties with substantial amounts of equity that can be released and put towards a deposit. If you don’t ask you don’t get!
(If you would like to get free mortgage advice you can complete this Property Cohort form and a mortgage adviser will be in touch within 24 hours)
4. Help to Buy
Help to Buy 1 has changed slightly. To reflect the current property prices in London, the Government has increased the upper limit for the equity loan it gives new homebuyers within Greater London from 20% to 40%. I think this is a great opportunity for those struggling to raise a deposit. The only downside in my opinion is that Help to Buy is only available on new build properties.
I'm not saying anything I’ve listed above is easy; however, I realised a long time ago that we cannot depend on the government or anybody else to truly help us out; I genuinely believe that getting on the property ladder is possible with the right mentality, knowledge and sacrifice.
If like me you're one of those people that don't have your parent’s wealth behind you, we can either complain like everyone else or knuckle down, educate ourselves and concentrate on what we can actually control.
*This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published.
Written by Roland John