Many people in the UK feel trapped by renting a home, caught in the cycle of wanting to buy a home but not able to save up for a deposit because the rents too high as they watch house prices rise around them.
But there are ways to escape this Catch-22 loop. Here is a radical but effective nine-point action plan to help you.
1. Make your rent count
You need to do all you can to increase your credit score. If you are a tenant the easiest way to do this is by registering with Credit Ladder. This service will help boost your credit score while all you need to do is to continue paying your normal rent.
2. Find a guarantor
If you're struggling to get a mortgage then ask your parents if they will guarantee your lkoan - which means they will take over paying it should you get into difficulties.
3. Live with your parents
It's not unusual these days for a tenant's rent to gobble up half of their salary, so for many the only option to enable them to start saving up is to move in with their parents and, hopefully, live rent free.
4. Get a lodger
The average rent paid in the UK is over £900 although this is skewed by London's crazy rental prices and is much less outside the capital. But either way renting out a room - if your landlord or rental agreement allows you to - can be a brilliant way to quickly build up a mortgage deposit pot.
5. Move to a cheaper property
In London recently research revealed that moving just four tube stops down a line can help a tenant reduce their monthly rent by up to 45%.
6. Become a property guardian
If you want to pay a quarter of the rent you'd normally pay then there are now several websites that match the owners of vacant commercial and residential buildings with 'guardians' prepared to look after the buildings and live in them.
7. Buy with friends and family
Most lenders now offer mortgages tailored to friends and families, although there catches - tying yourself financially to your sister, brother, cousin or best mates is not the same as renting a home with them.
8. Get a Help to Buy ISA
Help to Buy ISAs are a tax-free way to save up for a mortgage deposit and which the government tops up to help you along too. They are available through a range of banks, building societies and credit unions.
9. Take charge of your credit score
When you apply for a mortgage, or any financial product, the lender runs a credit check before deciding whether to lend you the money. The biggest factor in determining whether a lender says yes or no will be your credit score.
It is so important to ensure your credit score is as high as possible. Get a copy of your credit report and read it carefully. If you have previously defaulted on payments try and clear them so they won't have a negative impact on your score.
CreditLadder can help you improve your credit score
If you want to improve your credit position by reporting your rent payments, CreditLadder is the only way to improve your credit score and position across all four of the main Credit Reference Agencies in the UK, namely Experian, Equifax, TransUnion and Crediva. Building up a high credit score has a lot of benefits, including helping you access finance at better rates - this can also help save you money.
CreditLadder also runs a free mortgage application service in partnership with Tembo which will tell you how much you could borrow.
Remember the information provided in this article is for information purposes only and should not be considered as advice.
