Alternative Home Buying Options: What Else is Out There? 

Everyone dreams of owning their own home one day, but the rise of house prices has made the journey to get there far from straightforward. You might have your eyes set on the perfect apartment, but getting onto the property ladder might mean trying a different approach. From Shared Ownership to joint ownership, here are some of the best alternatives to getting a mortgage: 

Shared Ownership: 

Shared Ownership is one of the most popular alternatives to buying a home outright. It’s mainly aimed at first-time buyers and lower-income households, but anyone who meets the criteria is eligible. It allows you to enjoy all the benefits of homeownership without having to save the huge deposit to get there.

It works by allowing you to buy a share of your home while paying subsidised rent on the remainder. The result is a much lower deposit because it’s based on the share you’re buying rather than the whole property price, making it easier and more accessible to step onto the property ladder. 

Plus, because you’re paying subsidised rent on the remaining portion, monthly payments are normally cheaper than if you have an outright mortgage or were privately renting. You also have the flexibility to increase your share over time if your financial position improves. This is a process known as staircasing, which reduces the amount of rent you pay and moves you closer to full ownership.

Affordable Rent: 

When saving for a first home, many people end up renting in the short term with plans to eventually move out, but given the current high cost of renting, this short-term arrangement can often take longer than planned. If you're itching to live in your own apartment, but don’t yet have the money to use Shared Ownership, affordable rent is a great way to save a bit more to buy a home in the future. 

Wondering what affordable rent is? If you pass the criteria, affordable rent allows you to rent a home at 80% of the market rate. To take part, you need to make sure you don’t currently own a property and have a household income of around £18,100 to £66,000. 

At Square Roots, we offer affordable rent on many of our upcoming properties – register your interest to find out more.

Move in with a partner or friend: 

Buying a home can be a big financial responsibility for one person to take on. So why not buy a home with your friend or partner? By dividing the financial responsibility between two or more people, the process of saving for a first home immediately looks more appealing. Splitting the cost of the deposit and mortgage payments can make the process far more affordable, helping you save quicker and making homeownership less of a financial burden.

That said, it’s important to be realistic about the risks and considerations. Buying with someone else usually involves entering into a legal agreement, and you’ll need to think about what happens if one person wants to move out or if your relationship or friendship changes. Living together can be a great way to make owning a home possible sooner, but it’s worth planning carefully to avoid difficulties later.

Ask the bank of Mum and Dad:

If you're fortunate enough to be able to call upon your family for help, many first-time buyers look to their parents, or even grandparents, to help them get on the property ladder. Saving up for your home deposit is the longest part of the home-buying process, but family support can make the goal much more achievable.

This support can take different forms. Parents could gift a deposit, though it’s important to remember that gifted deposits must be declared and may have inheritance tax implications. Alternatively, they might choose to loan you the money, in which case it’s essential to have a clear agreement in place to avoid misunderstandings. Another option is for them to act as a guarantor, stepping in to cover repayments if you need them to. 

Each of these routes comes with its own responsibilities and considerations, but all can make homeownership far more accessible. 

If you are finding it difficult to buy your home with a conventional mortgage, Square Roots could have the solution you need. Whether you want to take advantage of Shared Ownership or Affordable Rent, we aim to turn the dream of owning your first home into a reality.