If becoming a homeowner is on your wishlist, you’re probably wondering whether you can get on the housing ladder as a first-time buyer in 2023.
The good news is that it’s absolutely possible to purchase a house in 2023 as a first-time buyer in the UK. The bad news is that it’s less straightforward than in previous years, for several reasons.
The first is that house prices have soared and although price growth has slowed this year, the average house in the UK cost £286,000 in May 2023. That’s a 67% rise compared to a decade previously.
Another major challenge is the sharp rise in interest rates from 1.75% in August 2022 to 5.25% one year later. This translates into higher mortgage costs for all homeowners, but first-time buyers are particularly affected because they tend to take out higher loan-to-value mortgages, with less equity in the property. They are therefore susceptible to being charged higher rates by lenders.
So, if you’re a UK first-time buyer in 2023, it pays to do your research and brush up on the ways you can make that leap onto the ladder.
1. Sort out your finances
Check your credit score and take action to improve it where you can. Clearing any outstanding debts will make a big difference, as well paying bills on time and getting yourself on the electoral roll.
2. Research house prices and areas
Consider widening your search if homes in your ideal location are out of reach financially – you might be amazed how much further your money goes if you look slightly further afield.
3. Get saving
Work out how you can put money aside for your deposit and moving costs. A bigger deposit gives you more buying power, as well as access to better mortgage rates.
Think creatively about ways to make your money go further, by reducing unnecessary expenses. Now could be a great time to approach your employer about a pay increase, too, or start a side hustle in your spare time to earn some extra cash.
Speak to your family about any money they might be willing to contribute towards your deposit, too.
4. Make use of first-time buyer schemes
There are several first-time buyer schemes that could help you get onto the housing ladder in the UK. These include:
- Shared ownership – you buy a share of a property and pay rent, usually at a discounted rate, on the rest
- First home scheme – gives some UK first-time buyers the chance to buy a property at a 30% discount
- Lifetime ISA – save up to £4,000 a year and the government will top it up by 25%
5. Get help from professionals
An experienced mortgage advisor could mean the difference between buying your first home in 2023 or not. They can help you work out what you can afford and find the best mortgage deals to suit your situation, including some that might not be available on the open market.
A mortgage advisor or broker will also guide you through the entire process and improve your chances of being accepted for a mortgage.
For help getting onto the housing ladder, contact our friendly estate agents and mortgage advisors at Graham & Co.