How first-time buyers can get a property in 2024 - Leeds Building Society expert explains

Matt Bartle, director of products at Leeds Building Society, says: “Every journey onto the property ladder starts with saving, and there are some great options at the moment.”

Some first-time buyers may want to consider Lifetime Isas, or Lisas, which come with a bonus. The annual limit people can save into a Lisa will remain at £4,000 in 2024/25. A 25% bonus is added to savings, up to a maximum of £1,000 per year.

But there are some restrictions to consider. Adults must be aged between 18 and 40 to open a Lisa and, if you’re using one to buy a first home, the property must cost £450,000 or less. Withdrawal charges may apply if you’re not using a Lisa for a first home or a pension.

A shake-up of Isas generally was recently announced in the autumn statement. Multiple subscriptions to Isas of the same type will be allowed every year, from April 2024, helping savers to make the most of the top rates.

The maximum amount you can newly save into Isas per year will remain at £20,000 in 2024/25.

Before starting mortgage applications, Bartle suggests it’s worth reviewing your credit score. Aspiring homeowners may also want to consider the free Experian Boost service.

Experian Boost allows people to share more information about how they manage their money, which may help to improve a credit score.

Leeds Building Society is among those to have partnered with Experian.

Bartle says: “The service is particularly useful for younger borrowers, first-time buyers and anyone on lower incomes who face the toughest challenge to prove their ability to repay.”

He adds: “Once you are ready to step onto the property ladder, it’s a good idea to liaise with a mortgage broker to discuss the options available to you. Have a think about whether a fee-free mortgage is better suited to your needs, or whether you want to shop around for the best rates for the amount you are looking to borrow.”

Shared ownership schemes may also be an option for some.

Leeds Building Society recorded a 19% increase in applications for shared ownership mortgages between January and May 2023, compared with the same period a year earlier.

Bartle says: “Many people are not aware of affordable housing schemes like shared ownership, which allows borrowers to buy a share in the overall value of a home and pay rent on the rest of it. This scheme helps to reduce the deposit hurdle and allows people to get onto the housing ladder quicker than would otherwise be possible.”

First-time buyers could also consider mortgages which allow family members to put down some savings as security, which could in turn mean a lower or even no deposit is needed.

Ben Thompson, deputy CEO at the Mortgage Advice Bureau (MAB), also says some friends or family members may consider clubbing together to become homeowners.

“Not only does it potentially increase the amount you can borrow and the type of property you can afford, it also allows you to split things like household bills and insurance,” he says.

Thompson cautions: “Before agreeing, you should ensure that all parties are fully informed of each other’s financial history from the outset, so there are no nasty surprises.”

Another option could be to stretch a mortgage over a longer period so that monthly repayments are lower – although this would likely mean that the mortgage becomes more expensive overall as you’ll be paying interest for longer.

Thompson says: “Buyers have been considering these due to the lower monthly repayments they can offer. However, they’re not for everyone, and you should think carefully about getting one.”

He suggests using tools such as the MAB’s repayment calculator, to get a sense of what you can afford.

While not everyone is in a position to do so, some aspiring first-time buyers may be able to move back in with parents for a period, while they save up.

IT manager Melissa Foulis, 35, has been living with her parents in Knaresborough, in North Yorkshire, while she saves to get onto the property ladder. She previously lived in rented accommodation.

She says: “I calculated that over the five years I was renting, I paid out almost £50,000 in rent. It’s been three years since I moved in with my parents, and by putting away as much as I can each month, I’ve managed to save up a decent deposit.

“Getting a mortgage on a single salary means that I want to give myself another year to top up my savings and find a home that I love.”