Sarah Beeny's top tips for first time buyers

Despite all the doom and gloom of recent years, there are still a range of different ways which enable first-time buyers to get on the property ladder, says Sarah Beeny, founder of Tepilo.com.

1. SAVE - Granted, this old fashioned method isn't as easy as it once was due to increased rents, but it is still achievable. Dump the one-bedroom apartment for a room in a shared house or, even better, move back in with your parents. Saving money on rent will give your savings that much needed boost and, if you are prepared to put in the extra work, a second part-time job could see them go through the roof.

2. BORROW - Many lenders now offer five times your income, and some even offer tailored graduate and professional products. Increasingly, mortgages are available over longer terms, with some lenders offering loans of up to 40 years. Of course, you will be paying thousands of pounds extra in interest - but there is nothing stopping you remortgaging to a shorter term after a couple of years. Obviously, the younger you are the more eligible you will be for such a long loan. If these are still out of your range, consider stretching yourself initially with the view of taking a secured loan out on the property as soon as you have completed. Bear in mind, however, that this will land you in negative equity immediately - and if the market crashes you may remain there for some considerable time.

3. BANK OF MUM AND DAD - Many parents appreciate the difficulty of getting onto the property ladder today and may be more than willing to offer a helping hand. The ways that they can aid your property purchase are numerous, ranging from matching your savings to put towards a healthy deposit, to going guarantor on a mortgage. Put simply, this means that should you miss a monthly repayment they will be liable, however they must have at least 30 per cent equity in their own home in order to qualify. Alternatively they may wish to transfer some equity into your new home on the basis that you buy them out as soon as you are able.

4. CO BUYING - Buying with a friend, a relative or even a stranger, can provide you both with the necessary finance needed. Pooling resources will increase your deposit and reduce all of your monthly outgoings, not to mention provide a DIY partner! Specific mortgage products are now available for this buying method, but there is no reason why a traditional mortgage wouldn't be suitable provided that you register the property as Tenants in Common rather than Joint Tenants - meaning that your co buyer wouldn't automatically inherit your half of the property. If you do decide to go down this route ensure that you have a water-tight contract covering you both should one party decide to move on, not to mention a Deed of Trust which will legally establish exactly who owns what percentage of the property.

5. BUYING AT AUCTION - Buying at auction is often a good way to secure a property at a reasonable price. The days of ultimate bargains may be over, but affordable property is prevalent at auctions. The difficulty is that there are hard and fast rules to buying in this manner, and they all involve severe organisation. Once you have had an offer accepted under the gavel it is legally binding and you will need to pay the ten per cent deposit there and then - meaning that you will need to have the survey done before the auction date. An efficient solicitor is also a must, as completion takes place just 28 days later.

6. BUY IN A DIFFERENT AREA - Just because you are tied to, say, London with work doesn't mean that you have to buy there. Getting on the ladder in other parts of the country, or abroad, can be much cheaper thanks to lower property prices and maybe even different buying processes. Buying, and then renting out, in this way could pave the way for your home-buying future.

7. RENT-A-ROOM - If you can afford the deposit but are fazed by the monthly repayments, consider getting a lodger. The cost of a two-bedroom home is never dramatically more than a one-bedroom property, and once settled you are entitled to earn up to £4,250 per annum on a tax free basis under the governments rent-a-room scheme.

8. RENOVATE - It may be a daunting prospect for many first-time buyers, but purchasing a home that needs work can be very lucrative. The cost of a kitchen or bathroom are less than you might think, therefore giving you the opportunity to add value to the property. Don't be put off by competition from developers either - in order for a developer to make a profit they need to buy the property at a bargain price due to all of the red tape involved. You, however, won't be selling your home immediately and so don't need to realise an immediate profit. Basically, renovating on a small scale can give you the look you want at a price you can afford.

9. BUY OFF-PLAN - The trick to buying a home off-plan is timing. Generally speaking, buying off-plan secures you a property for the future at today's market value. While this makes good sense, there are further advantages to be made if you buy wisely. Developers rely on cash flow, and there are key times when this is more true than others - namely as soon as the project is released and when it is nearing completion. Even if the asking price is fixed, you may be able to negotiate on fixtures and fittings, not to mention the deposit and stamp duty.

10. AVOID STAMP DUTY - The current stamp duty threshold stands at £250,000, meaning that any property you purchase for under this price is exempt. While this may be increasingly difficult in London, there is still the possibility to buy in a stamp duty exempt area. Stamp duty exempt areas are listed on the Inland Revenue's website (www.hmrc.gov.uk/so/dar/index.htm).

11. CHOOSE YOUR MORTGAGE CAREFULLY - There is a wide range of mortgages currently on the market, however there is more to choosing a product than the monthly repayments. If saving your initial outlay is your prime concern, then you need to be looking for a mortgage that doesn't have any arrangement or administration fees - of which there are plenty out there. If you can't find one that suits your needs, ask if you can add theses fees onto the mortgage itself - you may even be able to add on conveyancing fees. This will bump up your monthly repayments slightly, but will save you stumping up the cash in the beginning. See our Choosing a Mortgage Fact Sheet.

12. NEGOTIATE - As a first-time buyer you are in a great position, so ensure that you use this to your advantage. Finding that dream home is just as difficult for your vendors, and once they have found it they are unlikely to want to let it go. This means that they may be willing to accept a lower offer from a first-time buyer simply because you are not in a chain - the risk of loosing their next property is perhaps not worth haggling over a couple of thousand pounds.

13. SHARED OWNERSHIP SCHEMES - Housing associations and trusts occasionally operate shared ownership schemes which are designed to aid those who cannot afford to get on the property ladder. Generally aimed at key workers, such as teachers and NHS staff, these schemes involve buying a share of a property, and paying rent on the remainder of the balance. There is the option of buying more shares as and when you can afford to, as well as buying your home outright. However, be aware that when you come to sell the housing association has first refusal - albeit at market value.

14. RENT-TO-BUY - A relatively new concept in the UK, rent-to-buy enables you to rent a property with half of your monthly rent being put aside on your behalf for a deposit in a few years time. As with buying off-plan, the advantage of this is that you secure the property's price at today's market value, with the added bonus of not throwing money away on rent in the meantime.

15. EX-LOCAL-AUTHORITY - Buying an ex-local authority property has numerous advantages, perhaps the most attractive one being price. Recent statistics state that previously owned council homes can be up to 20 per cent cheaper than their period counterparts simply because of their "lack of character". In addition, proportions are always generous - especially when compared to today's new-builds. Finally, outdoor space is more often than not catered for, even if it is only in the form of a balcony.

16. COMPROMISE - Perhaps the best advice that any first-time buyer can get is to compromise! If you are finding that fabled two-bedroom garden flat simply too elusive it may be time to rethink your wants and needs. While you may need two bedrooms can you do without the garden? Alternatively, is it more important to have some outdoor space and squeeze the desk into the lounge? Making compromises will get you onto the property ladder quicker - and remember that this is only your first home - not where you are likely to spend the rest of your days. Your first property purchase is simply your first rung on the ladder - treat it that way.

Tepilo is an alternative way to buy, sell or let your property and it's free. You maintain 100% control and pay 0% commission. A fulller version of this article can be found here. Visit www.tepilo.com

25th August 2011