Despite these challenges, the determination to get on the property ladder remains strong. So, are there things that might help first-time buyers navigate the tough market and get ahead? Graham Sellar, head of business development for mortgages at Santander UK, shares the following tips…


1. Don’t panic


“The first thing is not to panic because the market’s gone up, prices are going up, it’s hard to find a property,” says Sellar. Buying a house is “a really big financial commitment”, he adds, “so the first thing is to stay calm. Yes you’re reading that prices are going up, and yes you’re reading that the cost-of-living is going to affect affordability, but the market’s very active at the moment.”

In what could bring some relief to first-time buyers, some housing market reports have pointed to a cooling in house price growth.


2. Read up on the subject


Sellar suggests reading up on what becoming a first-time buyer involves. “Treat it like a book and read what is it that you do from start to finish, and start to visualise you doing that yourself. Then it’s time to start thinking about: how to I save the deposit? Where do I want to live? How much can I borrow?”

The time it often takes to save for a deposit means many people nowadays are likely to have started a family before they buy their first home. For some, this means the first home they will buy could be a property big enough to fit a family, rather than a flat or typical smaller ‘starter’ home.

Sellar also advises checking out local primary and secondary schools in the area where you plan to buy, as this could help save you needing to move again in a few years’ time.


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3. Make the idea of borrowing become more ‘real’


Sellar suggests making the most of online mortgage calculators to get a realistic idea of how much you may be able to borrow: “You can play around with how much you can borrow, how much it will cost you each month, the differences between terms.”

Calculators can “make it more real” and help aspiring homeowners work out the type of property they can afford, and the location, he adds.


4. Spend time thinking and looking


Some people may want to seek independent advice and speak to a broker or bank. It’s also worth taking time to weigh up how long you want the mortgage to run for and how this could affect your monthly outgoings. “If you have too long a term, you may pay too much interest, and if you have too short a term, you may pay too much money each month,” Sellar adds.

In addition, if you’re commuting less frequently than you did before the pandemic and working from home more, you may also be able to expand your location search to include some less expensive areas.


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5. Think about the size of the deposit you’ll need – and whether family could help


There are mortgage options for first-time buyers whose parents are in a position to help, whether that’s helping towards the deposit or putting money up as security on a mortgage, for example. Some lenders will accept gifts from the ‘bank of mum and dad or the bank of gran and grandad’, Sellar says.

Many lenders offer mortgages for people with deposits as low as 5%, but bear in mind the interest rate you will pay may well be higher than if you had a bigger deposit of say 10% or 15%.