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Going It Alone – Tips For Single House-Hunters

Posted 14 February 2023 by Keith Osborne

Mortgage Advice Bureau offers some advice for individuals wanting to get on the property ladder without a partner...

With month after month of consecutive interest rate rises putting an inescapable squeeze on the property market, morale is low for everyone currently seeking a mortgage. It’s particularly challenging for those looking to secure one by themselves, as having more than one person’s income on the application inevitably boosts the amount you can borrow and reduces the risks for lenders (often the main stopping point).

However, single people shouldn’t write themselves off as far as getting a mortgage is concerned. Mortgage Advice Bureau has the following advice for individuals wanting to get on the property ladder without a partner.

Read on to find out more about:

Considering buying with a friend
Working on your credit score
Re-evaluating your budget
Contemplating a move
Being aware of the help available

 

1. Consider buying with a friend

Buying a house with a friend is a popular option for many first-time buyers, making the process more affordable by pooling resources such as deposit funds and combined incomes. If you have a close friend in a similar situation to you, it’s certainly an idea worth considering – just make sure that you go through all the necessary legal procedures should anything go wrong further down the line.

 

2. Work on your credit score

Regardless of your relationship status, if your credit score is on the floor, your chances of getting a mortgage are slim. There are plenty of steps you can take to improve your credit score, many of them being simpler than you might initially think. Examples include being on the electoral roll, using a credit score tracker and paying down existing debt. Get more tips to improve your credit score with this guide from Mortgage Advice Bureau.

 

3. Re-evaluate your budget

Are you saving as much as you can? With interest rates so high, it’s preferable to put down a bigger deposit so that you are borrowing less from the bank. Money experts recommend employing a 50-30-20 rule when it comes to budgeting, with 50% of your monthly income going on needs, 30 on ‘nice to haves’ and 20 into your savings. You may want to look at cutting back on ‘nice to haves’ and putting more into your savings. The next question is: are your savings working as hard for you as they could be?

A Lifetime ISA is one of the best places to start saving up for your deposit, as it allows you to save up to £4,000 a year tax free. The government will add a 25% bonus to the money you save (up to a maximum £1,000 a year). You can use the bonus after 12 months of opening the account if you buy a house under £450,000. However, a Lifetime ISA might not be right for everyone, so do check out all the details first.

 

4. Contemplate a move

It’s well known that some areas of the country are more expensive to live in than others. While relocating is of course not a decision to be taken lightly, it’s worth thinking about if it means a better chance of getting on the property ladder by yourself.

 

5. Be aware of the help available

Although the government’s Help to Buy scheme is now over, there are other options in terms of government support that those looking to buy on their own might consider. This includes UK-wide Shared Ownership schemes, as well as Help to Build equity loan schemes if you want to build a home from the ground up.

As well as the Bank of Mum and Dad, you could consider a guarantor mortgage if your individual income is making it difficult for your application to get approved. This will lower the lending risks, as they would have to pay your mortgage if you defaulted. It’s important to know the finer details, but it is potentially a good way for parents to support your house buying ambition. Just make sure that all parties talk to an adviser first.

 

20 February 2024
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2 February 2024
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