Moving Up The Property Ladder

has moved on. Maybe you're thinking of starting a family and want to buy a bigger home, or perhaps you're looking at a property as more of a financial investment. Or maybe it's a bit of both. Whatever the case, there's a lot to talk about when it comes to moving up the property ladder. Also, it might be your listen to this and thinking I'm not even close to

buying my first house, and that's totally fine too. There's still lots of useful information in this episode if you're considering trying to become a homeowner. With me to track through all of this is Liam Anstruther. Liam is an independent mortgage advisor who set up The Mortgage Advice Club to help people with the home buying process. So Liam,

let's get into the nitty- gritty of this. When is a good time to start thinking about the next step?

for the impending arrivals. Secondly, it'll be financial. So whether it be with the way that property values have been going, your property values went up, you want to take

advantage. Or you've got that first step in stone in the market, but you've got new jobs, you've got more money in, you want to get that property, maybe a longer term property for you and your partner or yourself, then that's the time you want to say, right, and now's the time to start looking, see what we can afford, what can we get, and then look to see what properties you can get for that budget.

be higher. So it's mainly about that monthly budget and you really need to have a think about, and obviously when we are speaking to our clients, we go through that with you anyway to make sure first step is this affordable for you, but it's about making sure that this step is worth it or it might mean that the next step might not be your forever home. It might be like

a middle step. It doesn't necessarily mean you need to go from first house, first flat to forever home. There might be that middle property that you're like, right, it's bigger, we can forward this now, but it's only a five- year plan and then planning to get that next step on it.

sense. I think a lot of people either enter property ladder thinking they're going to live in their five bedroom mansion when they can't afford it, or they think I've come from maybe my one bed flat and I'm going to go straight into my mansion. Where it is stepping stones. Maybe it's figuring out, like you said, the in- between that is better suit for.

to a hundred really quick. Whereas you're starting to see it now because of the way rates are, property values have went up a lot over the last few years as well. You're starting to get that start at the cheaper, lower flat, then take that middle step then the forever home. So it's kind of naturally going back to that after the kind of low rate period that we've had over the last five years.

you have already? Is that a good idea or should maybe someone think about getting rid of their first one?

property you've got and you're buying another one. You need to have that equity to be able to do that. So it can be great for some people. A lot of people, if they've got that entrepreneurial sense in them, they want to make money, they want to make money from property and they might buy more further than the line

and make it a real revenue income. It is possible to do something called let to buy, which is where you've let out your existing property and then you go buy another property. And obviously with that things to consider there's going to be additional stamp duty, things like that as

well. But as you said, if you've got the finance there and you've got the understanding of it by speaking to somebody like ourselves, then it's definitely something that you can do.

there's 5% deposit, 10%. So is that the same if you are going to buy a second property that's an investment property or how does that differ?

times out of ten it will be a higher deposit. One of the main differences is on what people will tend to do with buy- to- let properties as it will be on an interest only basis, because you want to make as much money as possible from that rental income. So your monthly payments will be substantially lower, because you

making the profit from the rent's coming in. But as I said, with the way rates are just now, a lot of landlords are probably going the other way rather than coming in. But again, some things that can be of benefit if you come in at this time and you're going to make more money as the rates come down.

on the mortgage payment versus the rental income. So it's a completely different thing and it tends to be a little bit probably easier on personal circumstances than what a residential home would be. So interest only is where you're just paying interest and you're not bringing down any of the mortgage balance. So obviously if it's your home you're

living in, you don't want to be doing that. You want to be bringing down your mortgage, get paid off as soon as possible, happy days. You enjoy your retirement

with no mortgage. With a rental property, you want to get as much rental income out of that and at the end of the day when you get to the end of the term, you're ready to retire and you don't need it anymore, you can just sell it and you'll still have that, fingers crossed, your property values went up a

little bit as well. So you kind of get that win- win from hope, a little bit of an equity boost and also the rental income as well.

sense there. But let's kind of bring it back. So someone who wants to get second property in general, whether they want to get it for investment or just for them to have themselves, what would you recommend that people keep in mind when they are coming to actually make this decision?

how much higher the interest rates are. If you're getting a bigger house, tends to be a bigger mortgage, which automatically mean a bigger monthly payment, more electricity, higher council tax. There's a lot of things you have to consider

about your budget. So the main thing people need consider is speak to someone like ourselves or even have a little look online on calculators and things to see is that property even just going to be affordable even with whether it's a change in income or you're needing that extra space, is it affordable? Because that's the most important thing, is making sure that property is affordable for you, whether

it be. And also if you're buying a bigger property, you're probably going to have higher stamp duties, another thing, higher solicitor costs, furnishing other rooms. There's a whole lot of other costs and things you need to think about. So it's that monthly budget you're thinking about as well as the upfront cost.

now instead of just one". It is like you said, it's fracturing in and making sure have I figured out because like you said, now I'm getting two mortgages and not just one. Now there's double the expenses. Can I actually physically afford this?

that will bring down what you make in the end. So it's about thinking about do you have that time, patience, the stress levels to deal with that as well as the finances behind it.

know what we're looking for. So to save as much money as possible, get that lowest rate, go with whoever the best lender is at that time. It will change probably in two years, five years time when you look again. But that's what we are here for. We want to save you as much money as possible, get your mortgage paid off as soon as possible so you can enjoy your retirement in your mortgage free home as soon as

possible. Because that's the most important thing, that's the end goal. In regards to making money or saving money when

you're selling and buying. When you're selling your home, it sounds daft and obvious, but if you're taking that next step in the property ladder just to cosmetic stuff when you're selling, if there's little jobs that are kind of outstanding or superficial things that need done to make it look that little bit better and that little bit more marketable, do it, pay that little bit extra because that

little few hundred pounds might be a few thousand pounds in somebody else's eyes. Because they don't have to do it, they don't have the hassle. So when you're coming to sell the property, just make it as beautiful and as marketable as possible so that you're getting the most for what you're selling it for. Because again, it's a knock on impact on hopefully getting you that little bit

of a better property at the other end. And last but not least, when you're looking to buy your property, your next one, whether it be an investment or whether it be your next step on the ladder, negotiate. Don't just, if you see a property there, use tools like Rightmove, how long has it been in the market for? The market is changing again, in the last two years it's been very,

very hot. Property's going in two, three weeks really, really quick. It's starting to change again and normalize. So don't just think that you have to go anywhere with your maximum offer, negotiate it, put a low offer in first. The worst thing that can happen is it gets rejected, and then you go in again

and you go in again. So the three things there are obviously saving on your mortgage, using somebody like a broker to get the best monthly payment in your mortgage. Next one, when you're selling your property, getting as much money as you can for your old one. So just making sure all those cosmetics touches are nice and tidy, photos and things. And I'm sure the estate agent will help

you with this as well. And then when you're putting in offers, don't be shy, don't think you have to. Whatever the agent has told you or the person selling that's told you put an offer in. The worst thing that can happen is they say, no.