Kia here. Welcome back to A Little Bit Richer. Property is such a big thing for Brits. It can be so difficult to get on the property ladder, but sometimes it feels like everyone else is moving into their beautiful new home - judging by their Instagram posts anyway. But if you don't own your own home, are you actually behind in your financial journey? Is it a good time to buy right now? What are some of the things that you can do
to help make the buying process a little easier? With me to discuss all of this and more is Tayo Oguntonade, a mortgage broker, property expert, investor, and influencer. Okay. Tayo, property prices are high, and mortgage rates have really rocketed. Is buying a house now still a good idea?
I have to chuckle at first! It's so funny. When you were doing the intro and saying all of those questions, it literally felt like you were reading my DMs. Those are all of the questions I get. It's great that we're addressing that today. I think the first thing to acknowledge is that it's incredibly difficult for all aspiring first- time buyers right now. We look at the last three years or so. The beginning of the pandemic,
you could put down a 5% deposit. All of a sudden, in a matter of days, that was tripled to 15%. When they actually went back to 5% again, all of a sudden, house prices were shooting up because they introduced stamp duty holiday, mortgage payment holiday, and things like that. Then, when house prices actually started slowing down up to today, we saw that mortgage rates were increasing rapidly as well. It's really, really been a tough time. It feels like
they've been pulled from pillar to post. I guess the first thing to acknowledge is that, yes, it is a very, very difficult time for first- time buyers right now. But I would say that if it is your goal to own your own property and buy your first property, you can still buy it right now. It is still possible. I always say that you shouldn't try and time the market. If you can afford it... What I mean by afford is afford to buy the house and afford the monthly payments on a long-
term basis, and it is one of your goals. Definitely go ahead, in my opinion.
I think that's a really good point that you make. If you try and time it's always not quite the right time. It is just, like you said, getting in there. If you're ready and you can afford it, jumping in and doing it.
Absolutely.
There's been some research done recently by L egal and General that has found that, this year, financial support is more important than ever. Over two- thirds of London homeowners received financial support from family or friends. I'm going to ask you, is it impossible if you don't have any financial help from friends or family?
It's not impossible. However, we cannot ignore the numbers and the research. I love numbers. I love any research. Do you know why? Because numbers have no opinion. You just have to acknowledge them. We have to take them for what they are basically. Those numbers are basically saying that there's a reason why so many people are leaning on family or leaning on siblings or friends or colleagues and buying with someone or getting financial assistance from someone. That's because it is becoming
increasingly more difficult. Because I guess if you buy by yourself, a lot of the time, first- time buyers feel that they do have to sacrifice something. I'll come onto that. But what I would say is that whenever people think about financial assistance, a lot of the time, they do often think about the bank of Mum and Dad. When people think about the bank of Mum and Dad, they always think that, look, they've come from an ultra- wealthy family,
but that's not often the case. This is why platforms like Bricks With Tips are made, and platforms like this podcast, right, because education is key. A lot of people are using that financial assistance, but it stems from education. If I paint a scenario, there might be somebody who has a job. They earn 30,000 pounds. They're working towards a promotion that will pay them 40, 000 pounds. However, they know that they're going to get that promotion in maybe the next two or three years effectively.
They've been doing research on what it takes to buy a property. They know that, even at 40, 000 pounds, they still won't be able to afford the property that they want to buy effectively because they know that lenders will lend a certain amount, times their income. Also, via being educated, what they do know is that... " Hold on. My sister earns 30K as well. If we combine our salaries, it's 60,000 pounds."
That education allows people to act early, basically. What we're experiencing at the moment is that a lot of people just don't know. They just pull the wool over their eyes. They're like. " It's difficult." They listen to the media. " It's impossible." They don't take any action. Then, just to touch on what you said about is it impossible. It is still possible to do it without financial assistance, but there are things that you may have to sacrifice. Maybe that's moving
a little bit further out. Maybe that is opting for a two- bedroom flat rather than your dream of a three- bedroom house effectively. Yeah. I definitely do think that it is still possible. But in some cases, there may be an element of sacrifice.
I think I love the point that you made about just learning and understanding. I think it is knowing what can you do with the money that I've got, the money that I'm on, the money that I've saved, what can I realistically afford? I think that's the keyword. Realistically.
Absolutely.
Because, like you said, I think everyone dreams about their first home being a mansion somewhere. But realistically, your budget may not stretch to that. I think that is a key point. I want to go off the back of something that you said. Let's talk about maybe buying with someone then because I've spoken to people who have bought with family. I think that's probably a bit more common.
But then, what about people buying with friends? What would you say? Is that a good way to look at... maybe people rally their friends together and say, " Let's buy property together"? Or people will look at their siblings?
Yeah. I definitely do think it's a good way to go. But you have to put certain things in place. I think that a lot of people are scared of it because buying a property is a long- term commitment. However, in this day and age, renting is a long- term commitment, especially if you're renting in places like London because, a lot of the time, you can't just jump around because renting in London is incredibly expensive. Every single time you change where you're renting, there is a cost attached to
that as well, effectively. I do think that that is something to consider. I guess when you are buying, you are building equity over time, whether that's you paying down your mortgage or, depending on the market, the property increasing in value effectively. There are pros and cons of buying and
renting that we can balance against each other. But in the main, biased I will be, buying is probably what you want to do just to ensure that you're building that equity and you've got more freedom to do what you want with your property. Buying with friends, buying with siblings, I am in support of it. I think it can allow people to achieve the goal that they're looking at.
Okay. Well, we never know. We might have some siblings or some friends after hearing this banding together to buy a house, which would be lovely to hear, wouldn't it? We're going to come on to... Let's assume that our listeners have decided that buying a house is what's right for them. That's the right decision for them. What options/ schemes are available to make that goal more achievable for them?
Right. There are quite a few options and schemes: some that people know about and some that people don't know about. The ones that people probably know about the most are government schemes. For example, some of the two most popular ones are shared ownership. I always give the example. Shared ownership is effectively you buying a share of a property and renting the rest of the property. A really easy scenario is that, in London, there's a flat that's 400,000 pounds.
You can buy a 25% share of that flat, which means that you buy 100K of that flat effectively. You rent the remaining three- quarters of that flat effectively. The reason why it's popular is because it's got really, really low startup costs. You don't need to put a huge amount down because, in actual fact, when you're buying that 25% share at 100K, you can put down a deposit as low as 5%, which means that you can put down 5, 000 pounds to live in a 400K flat. Naturally, that's
going to get a lot of attention. Another scheme that a lot of people know about is Right to Buy. That's when you can buy the council flat that you live in if you've lived in there for three years or more effectively. There are some government schemes that are less known. For example, there's one called First Home Scheme, where you can get between 30 and 50% off your first home. There's another one called Help to Build because Help to Buy no longer exists.
Help to Build can actually help you finance the land and the build of a self- build property, which is really, really interesting. Then, another one that a lot of people don't know is that there are actually some schemes that are offered by lenders, first of all, and definitely have a look and check those out, and also home builders as well because there is an incentive for them to sell their homes.
That's really good to hear you share all those different schemes because I think sometimes, as a first- time buyer... It is overwhelming, anyway, for anyone trying to buy a property, but especially if you're trying to understand what's going to work for you, knowing that there's so many options out there. It's just finding the right one for you. Maybe it's shared ownership, maybe it's first homes, maybe it's something
else. But I think it is good to know. One of my favorite schemes, which isn't necessarily for buying, but... Do you know what I'm going to say? What scheme I'm going to say?
I know what you're going to say.
What am I going to say?
It begins with L.
It does.
It ends with ISA.
It does. You got it bang on. My favourite scheme is the Lifetime ISA because it's just a great savings vehicle. For anyone who doesn't know, the Lifetime ISA is a savings vehicle. It's superseded the Help to Buy ISA, which closed, I think, in 2019. You can use that to save for your first house. You put money in there up to 4, 000 pounds per tax year. You can keep saving that money. The government will put 25% on top of anything that you save up until that amount.
You can use that towards your deposit. It's also important to note. You have to have it open for at least a year, but you can use it. But it is a great way to save money and get free money. That's always my thing. Anytime we can get some extra money towards our financial goals, I'm all for it. The Lifetime ISA is a great way to do that from the government. I think all those schemes combined, there is a lot of hope for anyone listening when it comes to buying first property.
Absolutely. To add to what you said about the Lifetime ISA, the difference between Lifetime ISA and all of those other schemes is that, with the Lifetime ISA... It can be applied to property...
To any property.
Exactly that. That's really, really nice, the flexibility of that.
Yeah, I love that. Right. To wrap up then, with property in mind, I'm going to ask you the question I ask all of our guests. What are the three quick tips that you'd recommend to our listeners to help them get a little bit richer?
With property in mind, getting a little bit richer... Okay, cool. I'm big on education. Knowing what you're doing is key effectively. My first tip is speak to a mortgage broker. In the property space, a lot of things aren't free. Getting a survey done isn't free. Getting a valuation done isn't free. Getting a quote from an architect isn't free. However, a mortgage broker will actually speak to you
for free. It's very, very rare that you can get such a tailored and one- to- one service for free in any other industry. A mortgage broker will assess your current situation and tell you what you can and can't do. My second tip... Go on viewings, whether they're virtual viewings or viewings in person. I think that one mistake that a lot of people make is that they fix
their credit. They save their money. They get their salary up. Then, they've been doing that for two or three years. Then, the problem is that they spend nine months after that working out what type of property they want. While they're working that out, their budget is going all over the place as well. Find out what you like in a property. Find out what you love. Find out what
you hate. Find out what you're willing to compromise on. That way, you know exactly how much money you need because you know the type of property you want in what area. It goes to education as well. Wherever you consume any of your content, whether you're on Twitter, whether you're on Instagram, whether you use YouTube, or maybe you read print, just curate everything that you do and make it property-
focused effectively. You'll pick up new tips. You'll pick up new ways to overcome challenges that you are actually facing because one of the key things is... And you alluded to it a bit earlier when we were speaking, is that once you know about all of these different schemes, the key thing is that you can now apply it to your personal situation.
You gave some great tips. I think the key takeaways that I pull from this episode is, one, education is key. Make sure you research/ you understand what you're looking to get into when it comes to buying a property and, two, that there is hope. It may seem a bit bleak. Things are going up in price and not seeming to come down. But there is still hope. If you want to get on the property ladder, it isn't as impossible
as it may seem. Thank you so much, Tayo, for coming on. This has been a great episode. That's A Little Bit Richer's first foray into the huge topic that is property. I'll be back to this a little bit later in a series, too. It's worth noting that, as with all things to do with interest rates and house buying, it's always worth double- checking if things have changed before you make any big
decisions. This episode is all about taking control of your property- buying journey. But, unfortunately, financial freedom isn't always a given. Next week is a particularly important episode as I'll be exploring what financial abuse is and how to recognize the signs of it around you. Be sure to check back next week for that. In the meantime, follow the podcast if you aren't already. Bye.