The Graduate Property Guide
After finishing up after university, students up and down the country find themselves in a state of transition, as they attempt to find their way into the working world. Many will take the decision to return to their parent’s homes in an effort to save, whilst others will start renting, depending on where they’ve found job placements. As a graduate, no matter where you decide to move to, it’s important to decide whether you’re looking to buy or rent. Whilst short-term renting is an attractive option in terms of independence, long term it can prove more fruitful by buying your way on to the property ladder. After graduating, it can be very difficult to know how to navigate the property search. However, by committing to saving, and doing some research, you’ll be able to find the house that’s right for you. Below we take a look at how you can prepare for your first step onto the property ladder and see how buying stacks up against renting.
Save Today, Spend Tomorrow
Many students find themselves berated in the press for squandering their student loans on alcohol and junk food. However, there are many students who walk out of university with much better finances than they arrived with. University can be a great opportunity to try and build up some savings. Savings will pay dividends down the line regardless of whether you intend to remain renting, or by choosing to buy. The key to saving is to be strict with your outgoing expenditure, and to put aside a regular savings amount every week. In order to control your spending, it’s a good idea to write up a weekly budget so that you have a set amount for your essentials, like food and utility bills. By setting aside regular savings, you’ll be grateful for the boost toward your deposit when it comes time to buy.
The next step to saving successfully is to get a part-time job. Whether you’re working on or off campus, holding down a part-time job is a great way to build up your finances and get some practical work experience. You’ll not only be able to save more, but when you come to take out a mortgage you’ll find that your credit rating has been boosted. This is due to the fact that you’ll need evidence of a regular income, i.e. a payslip, in order to qualify for mortgage financing. Likewise, if you intend to rent, many landlords will be unwilling to let property to you unless you have a regular income. A part-time job can be ideal for helping you transition from the end of university to your post-academic life.
Do your Research
Buying a house is perhaps the most expensive purchase you’ll ever make in your life. As a result, it’s important to do your research before you put any money down. If you jump straight in, you may live to regret it if the property is not a worthwhile investment. Before putting any money down, assess the local property market, and pay attention to price fluctuations. If you run a search for local property prices within the last 10 years, you’ll be able to see how house prices have changed. In addition, you want to make sure that you can afford the mortgage, council tax and upkeep of the property you’re planning to buy. Likewise, if you’re renting, you’ll need to check that the property doesn’t have endemic problems before putting down your deposit. Pay particular attention to the state of the property and go through your tenancy agreement with a fine-tooth comb.
As a graduate, when it comes to buying a house, you’re in new territory. The process of buying a house can seem very daunting at first, but if you commit to doing your research then you shouldn’t run into any problems. When you’re conducting your viewings, try to anticipate things that could be a problem down the line. A surveyor can point out the need for structural repairs and other costs, but you should always be proactive. If you find anything potentially problematic then you can deduct money from the asking price or walk away. Just because you’re a first-time buyer doesn’t mean that a bad deal is better than no deal. It can be difficult to walk away from a property you like, but you’ll be happy further down the line when you’re not burdened with extra costs.
Ask yourself how much you can afford to borrow
Finally, ask yourself how much you can afford to borrow. Throughout the buying process, scour the market to find the best loans, ISAs and other options available to support your purchase. For graduates, one of the best ISA’s on the market is the government’s Help to Buy ISA. With this ISA, for every £200 that is saved, the government will add another £50 up to £3,000. This scheme can be brilliant for helping you to pad out your finances a bit so that when you make that deposit, you have as much as you need. In addition, the government also offers a Help to Buy loan, where you will be provided with a loan of up 20% of a new-build home, with an interest free repayment period of five years. When you’re taking out loans, don’t forget additional fees you’ll need to pay like stamp duty, and valuation fees. You don’t want to take out loans only to realize that you have more to pay than you originally anticipated!
Save, Research, Enjoy
Regardless of whether you’re renting or buying, by saving and conducting your research, you’ll ensure that you find the property that’s right for you. Fail to prepare, and you will almost certainly incur unexpected costs and headaches. If you’re renting, make sure that you rent from a reliable landlord, and that the property doesn’t have any endemic issues. If you go towards the property ladder, meticulously plan how much you need to borrow, and what your repayment schedule will be like in future. If you factor in council tax, utility bills and upkeep costs into your repayment analysis, you’ll be well prepared once you start living in the property. Most of all, enjoy the process, it’ll be the first time you ever set foot in a property that’s completely your own!