What is the price of owning our own home in the 21st century? Not the physical cost, but the cost it has on our lives. It is notoriously difficult to buy a home now in comparison to twenty or thirty years ago, and the last time the vast majority of prospective home buyers had the opportunity was when the markets crashed in 2008, and it was time to strike while the iron was hot! Now, with the rise of costs, and the lifestyle changes of people being geared towards living to the best they can, it seems that the most affordable option is to rent homes. The amount of conditions that go with renting is a lot less than buying, but buying your own home is the benchmark of “getting on the property ladder.” Once you are on there, it is much like being given exclusive access to an inner circle. The possibilities have opened up for you, and even with the huge amount of tech and communication methods available to us, we are still being left scratching our heads and wondering which way to turn. So what is out there for us?
The first place to look is… yourself. The apple doesn’t fall far from the tree, does it? There are so many different places to begin, whether it is your outgoings or your own mounting debt, but the first question to ask yourself is if it actually makes more sense to rent anyway? With buying a home comes so many hidden costs. From the cost of the home itself to admin fees or broker fees and stamp duty, it can add a sizeable cost to your outgoings before you have even thought about getting on the ladder. It appears to be a misconception with older generations that younger people are just squandering their money, which is why they cannot afford a house, which is far from the truth. The generation gap differs in opinion on many things, but it’s buying a home that the issues show themselves. Thirty years ago, buying a house was affordable in a one-income household and without as many hoops. Twenty years ago, there was a lot more help for people that were self-employed. Ten years ago was the gap in the market. But now, the costs are more, self-employed people are subject to rigorous testing, and now the gap has been replaced by insufficient costs to add to the concern. It isn’t just the more centralized areas that feel the push. It is certainly a cause of the rural areas increasing in price because the market is migrating to the rural areas as they are more affordable for the city dwellers, so where does this leave the rural dwellers looking for their own property? It looks like the only solution is to have a two-income family and even this comes with its own flawed logic. Due to the option for potentially uncapped earnings, people are going down the self-employed route. It is a viable option for as much work as you can take on and it helps to add a third income to a home where two family members are working, such as new parents. But the problem with being self-employed is the “unpredictable” nature of the work. Banks like to see a history of being successfully self-employed, which is judged by their criteria. Regardless of the fact that you are working two jobs to the detriment of your family life, you are bringing home the bacon, as is your partner. The problem in this logic is that financially you are earning enough for a down payment or deposit, but you are, on paper, “unreliable.” You can trawl through your bank statements to give evidence to the contrary, but despite the uncapped earnings, which is a much more sensible financial option for you rather than taking a paid job that barely covers your outgoings, it doesn’t help your situation. So where do we begin? Looking at your outgoings is the first step. In purchasing a home, as part of the process, there will be a credit check. There is more information on the fine details of credit score checking at upgradedpoints.com and other sites, which for people who don’t have in-depth knowledge of the process is a life saver. This is another aspect that people can fall down on, a lack of knowledge when it comes to the finer details, which is why examining your outgoings is a great way of taking some of the control back before the credit checks occur. Banks used to look at your outgoings and see if you had enough to cover the general costs. Now they will go through your bank statements to see what “unnecessary” outgoings there are and potentially use that as a reason to not lend the money. Something as innocent as getting a coffee en route to work can add up over the course of a year. If, for example, a cup of coffee costs you £2.45 on average, and you buy this coffee every day before you go to work, which works out as £12.25 a week. You work on average, excluding holidays, 47 weeks a year. That is £575.75 a year on one cup of coffee! Your mobile phone is a necessity in the digital age, and that can work out at an extortionate fee. The difficulty in downsizing everything is that we feel that we lose face somewhat. In cutting down your outgoings, you need to find a good balance. Looking at where you can trim the fat on your bank statement, by looking at shopping brands, your phone bill, and even on that cup of coffee, it will put you in a better position to buy.
When looking for a home, we tend to go online and have a quick gander at the houses on a few estate agents. Yet we don’t go any further into that option and deal with online sellers. It is completely understandable from the perspective of a first-time buyer, the internet is open to any amount of issues, and while there are downsides to buying a house solely online, there are upshots too. The first way you can make life easier for yourself in looking for a home is to have a detailed look at areas in which you plan to buy. This is especially handy if you are looking to move away from your current area. You can do a lot more investigation into things like the environmental concerns, the crime rates, and the quality of the schools online. While before, getting a feel for a place was the primary judgment criteria, you can really go in deep on what you want out of an area. Even the cost of living is something you can investigate properly, so you know you have a better chance of having a good quality of life there rather than struggling to make the bill payments. The difficulty in choosing a location means that it can make a bigger personal impact on you than you realize. Virtual tours and mortgage quotes are all things that can be done online now. That is the wonder of the internet, yet we tend to go for the traditional methods of home buying. The downside of home buying online is the potential lack of communication you can suffer as a result. It is a wonderful tool for browsing and to truly get an angle on what your options are, but the personal touch is lost in translation. The potential inconsistencies in communication, being bounced from one staff member to the next, are a very likely prospect in going for online estate agents. As a result, the chain can be broken and the fact that email communication is one variation on playing the waiting game, but with proper research and background knowledge that you can acquire, it will make for an easier process overall.
These two approaches are two of many methods to get a better idea of getting on the property ladder. The economy will forever fluctuate, and you will find it a struggle whichever way you may look at it. However, the potential to regain some control of your own financial independence is an option for getting back onto the property ladder. Your outgoings are the criteria that you will be judged by, and by taking a good look at what you spend and how you spend it, it will be an easier and smoother process. The fact of it is that we seldom look at how we can cut back because we feel that we already do enough to scrimp and save. We feel that we cannot compromise our lifestyle anymore. And there are many that will agree, but a home is an investment, and if it means a short-term change for a long-term benefit, then it is surely worth taking the time to re-examine your spending habits and doing some research on the state of the markets and processes. The internet is a great tool for research, but you are too.