SOMEWHERE TO CALL HOME How to finance your property

When you’ve had a rubbish day, nothing beats returning to the sanctuary of home and firmly shutting the door on the world. Whether you rent or own, here’s how to finance your precious space

GENERATION RENT

The joy of owning our own home is drilled into us from a young age in the UK, unlike in countries such as Germany and France, where long-term renting is the norm for many. There are lots of advantages to being a tenant: not least freedom, flexibility and the fact that you can just call your landlord if the shower starts leaking! Around 36% of adults in England rent their homes rather than own them – whether as a stopgap or a long-term plan. Whatever your situation, here are the must-knows of renting:

Protect your deposit

You’re likely to be asked to pay at least four weeks’ rent in advance as a deposit (six weeks’ is the max). In England and Wales, your landlord is legally required to place your deposit in one of three government-backed tenancy deposit protection schemes within 30 days of you paying it. There are separate TDP schemes in Scotland and Northern Ireland. For more information, see gov.uk/ tenancy-deposit-protection.

Write an inventory

As soon as you move in, agree a checklist with your landlord of everything that’s included as part of the tenancy – also noting any faults and damage to the property, furniture and fittings. It’s worth taking pictures, too, so that when you move out, you won’t be charged for damage that was already there.

Beware of fees

Thanks to the Tenant Fees Act that came into effect last June, landlords and agents can no longer charge tenants fees for the

cost of admin, including getting a reference, arranging an inventory or for renewing a tenancy agreement.

Boost your credit score

As long as you pay your rent on time, you can make it count towards improving your credit score. Report your rent payments to Creditladder, which verifies them to build up a good credit history with Experian.

Be a property guardian

In an age of sky-high rents, paying as little as £50 a week to live in a premium property may seem impossible. But for property guardians – people who occupy homes and keep them in good condition and free of squatters – it’s a reality. Ad Hoc property protection (adhoc.eu) has offerings such as a room in central Brighton for just £75 a week. Many of the properties are commercial, but there are also large houses whose owners are overseas for long periods and new-build developments that have failed to sell or are being kept empty by their builders until the property market picks up. Also try ambikaproperty.com and liveinguardians.com.

GET ON THE LADDER

Buying a home instead of renting could leave the average property owner £352,000 better off over 30 years, new research has claimed*. Despite the uncertainty of the past decade, in 2018, the number of first-time buyers was the highest it had been in more than 10 years. This is thanks to low mortgage rates and government schemes, which have – for those who can afford it – made buying a home more accessible. If owning a place is on your to-do list, here’s how to get a helping hand:

Free money from the government

Save towards buying your first home with a Lifetime ISA (LISA) and you could get a cash bonus of up to £1,000 a year. You have to be 18-39 to open one and pay in £4,000 a year to receive the maximum bonus (25%), all tax free. And if you’re a couple, you can both take advantage. However, if you don’t use the cash in a LISA to buy your first home (or put it towards your pension) you’ll lose the bonus and be slapped with a penalty. Plus, you can only use it to buy a home after it’s had money in it for at least 12 months.

A share of the pie

The Shared Ownership scheme allows you to buy anywhere between 25% and 75% of a property – and you pay reduced rent on the rest. You will need at least 5% of the deposit and a mortgage for the part you’re going to own.

A little help from your friends

Family mortgages, such as the Barclays Family Springboard or Halifax Family Boost, allow a family member or friend to help first-time buyers with their deposits. Generally, this works by them putting 10% of the purchase price of your house into a fixed-term savings account as a guarantor for a set amount of years. As long as you don’t default on mortgage payments, they get their money back with interest. Different banks have different rules, so do your research.

Interest-free loans

The Help to Buy: Equity Loan lets you borrow up to 20% of the property price (up to 40% in London) for new-build properties costing up to £600,000. The loan is interest free for five years. You’ll need a 5% deposit and a mortgage for the rest. Find out more at helptobuy.gov.uk.