I got on the property ladder through ‘lifeline’ government account – you can get £1,000 free cash a year
A WOMAN resigned to renting for life got on the property ladder by temporarily becoming an estate agent – to learn the tricks of the trade.
Comedian Kate-Lois Elliott thought she was going to live in a rented basement flat for the rest of her days due to her career choices.
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As a former actor-turned-comedian – who is married to another actor – their irregular income offered little hope of securing a deposit and mortgage.
But all that changed when Kate employed an unusual tactic to help her get clued up on the property ladder – by getting a short-term gig with an estate agent for around six months near Brighton.
She said: “It helped me realise important things – the first is that buying a property often goes wrong for one reason or another, and also that people always have such an idealistic view of what they want.
“They’ll be like ‘it has to have a garden, it needs to be in this area, it needs to be next to a train station’ – and often by the end of the process, they’re just like, ‘it just has to have a kitchen!’.
“So what really worked for us was we narrowed our wish list right down to the basics and decided to look at it as a starting point so we could own somewhere of our own.”
Kate-Lois added that the experience also taught her that “knowledge is key” and first-time buyers need to “get everything in writing”.
While it also hammered home the importance of getting a solicitor who will “actually speak to you in person” and going with an estate agent which will “treat you like a person”.
Alongside this, to save the all-important deposit, Kate-Lois knew she would have to get savvier with managing her cash.
She discovered the Lifetime ISA (LISA), a government-backed incentivised savings product designed to give young people a helping hand to save a deposit for their first home and prepare for a comfortable retirement.
She said: “When I found out that there was up to £1,000 free money up for grabs each year if we could save £4,000, it was hugely motivating and it definitely set me on a path to saving all I could.”
By committing to saving regularly, putting in more during the good months and less during the leaner times, in seven years they had saved for their deposit and were ready to buy last Spring.
And while Kate-Lois was able to overcome the odds and get a foot on the property ladder, she recognises it’s not always easy for others who also work for themselves – especially those in the arts who are sole traders.
Even her stand-up routines reference the issue, with a popular opening gag about the drama involving in a Millennial buying their own home – which she’s currently touring across Scotland and England.
She added: “I mean, especially for a comedian, you either go to the Edinburgh Fringe and debut, or you buy a house.
“I think it is really, really difficult for people who choose to work in the arts, and I think they’re very much undervalued.
“At the start of the process, I was really pragmatic and thought I’ll open a LISA, and if it doesn’t work out and I can’t buy, at least I’ve got a retirement fund for when I’m old in my rented basement flat.
“It ended up being a lifeline, keeping us focused and motivated when there were so many situations along the way where we had to compromise but we were like, we’re just going to make it work, and as a result, we got our flat.”
Kate-Lois isn’t the only one who has turned to the LISA to help them make their dream of buying a home of their own into a reality.
Launched by the government in 2017, there are currently more than 1.5million people saving or investing with a LISA in the UK – making the most of the 25 per cent government bonus to help them reach their goals.
Available to anyone aged 18 to 39, you can pay in up to £4,000 each tax year up to the age of 50, adding up to a maximum of £32,000 bonuses up for grabs.
Data from leading LISA provider Moneybox reveals the growing popularity of the product, with a 38 per cent increase in accounts opened last year compared to the year before.
Brian Byrnes, head of personal finance at Moneybox, said: “We’ve witnessed first-hand how invaluable this product has been, helping nearly a quarter of a million young people across the UK buy their first home far sooner than they ever thought possible.
“Homeownership has long been viewed as a cornerstone of financial stability and one of the most effective ways to accumulate wealth due to the potential for equity growth over time.
“Yet, in recent years, young people have faced some of the toughest market conditions in decades.
“Saving a suitable deposit continues to be one of the biggest hurdles many face, while house prices and borrowing costs remain high as interest rates remain elevated.
“While there’s no one-size-fits-all solution to address the issues affecting the UK housing market as we look to the Spring Statement, we’ve been campaigning for the government to future-proof the Lifetime ISA, ensuring it continues to provide vital support for the next generation of homeowners.
“Regularly reviewing product rules in line with evolving market conditions will help safeguard this crucial financial lifeline for those who need it most.”
How to get the best deal on your mortgage
IF you’re looking for a traditional type of mortgage, getting the best rates depends entirely on what’s available at any given time.
There are several ways to land the best deal.
Usually the larger the deposit you have the lower the rate you can get.
If you’re remortgaging and your loan-to-value ratio (LTV) has changed, you’ll get access to better rates than before.
Your LTV will go down if your outstanding mortgage is lower and/or your home’s value is higher.
A change to your credit score or a better salary could also help you access better rates.
And if you’re nearing the end of a fixed deal soon it’s worth looking for new deals now.
You can lock in current deals sometimes up to six months before your current deal ends.
Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost.
But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal – but compare the costs first.
To find the best deal use a mortgage comparison tool to see what’s available.
You can also go to a mortgage broker who can compare a much larger range of deals for you.
Some will charge an extra fee but there are plenty who give advice for free and get paid only on commission from the lender.
You’ll also need to factor in fees for the mortgage, though some have no fees at all.
You can add the fee – sometimes more than £1,000 – to the cost of the mortgage, but be aware that means you’ll pay interest on it and so will cost more in the long term.
You can use a mortgage calculator to see how much you could borrow.
Remember you’ll have to pass the lender’s strict eligibility criteria too, which will include affordability checks and looking at your credit file.
You may also need to provide documents such as utility bills, proof of benefits, your last three month’s payslips, passports and bank statements.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
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