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Would you team up to buy your dream home?

Would you team up to buy your dream home?

Category: Mortgages

Updated: 27/09/2016
First Published: 27/09/2016

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

It can't be denied that getting on the housing ladder is a struggle, particularly for those who don't have a partner to share the load. As a result, many people are teaming up with friends and family to help make their homeownership dreams a reality, and research shows that the number of people doing so is on the rise.

Collective buying power

The figures, from My Home Move, show that the number of homes bought by 'single' purchasers has fallen by an average of 4% over the past five years (the equivalent of around 10,000 transactions a year), with home-buying couples, friends and groups now accounting for some 60% of residential transactions a year.

While there could undoubtedly be some details to iron out in these kinds of arrangements, the payoff could well be worth it, with collective buying enabling people to afford properties worth up to £100,000 more than if they bought on an individual basis. This is particularly the case in areas with notoriously high property values, such as London, Kent and Essex, which see the highest number of group purchasers (of three or more buyers).

Doug Crawford, CEO of My Home Move, said that "with the continuing rise in property prices over the past few years, it is not surprising that the number of people buying on their own has decreased". Instead, buying collectively is on the rise, allowing people to pool their resources and boost their spending power, with groups of three and even four buyers seeing a definite increase.

Making sacrifices

But what if you don't want to buy with anyone else? Well, many people are realising that they may have to make sacrifices, and unfortunately, additional research from Aviva shows that one of those sacrifices could be safety.

This is particularly the case for younger would-be buyers, who were found to be more likely to buy a home regardless of safety, flood risks or even crime statistics in order to get that first stronghold on the housing ladder. Indeed, 34% of buyers aged 34 and under said they'd buy a home in a high crime area, compared with 19% overall and just 7% of those aged 55+.

Similarly, almost half (44%) of 18-24 year-olds and 36% of 25-34 year-olds would consider living in a flood-risk area, compared with 23% across all age groups and only 8% of those aged 55+. However, other sacrifices aren't quite so dangerous or potentially costly, with more than six in 10 people (65%) across all age groups saying they'd buy a property needing significant improvements in order to procure safe accommodation.

Affordability anxieties

Perhaps unsurprisingly, the research found that anxiety over being able to afford a property in the first place could be driving younger buyers to make sacrifices when it comes to safety and location. Indeed, 67% of respondents said they'd relocate solely to be able to afford cheaper housing – rising to 83% of 18-24 year-olds – and 27% believe they'll never be able to get a foot on the property ladder.

Lindsey Rix of Aviva UK General Insurance said that rising house prices "are putting an increasing strain on would-be buyers' finances, and the fear of never being able to own a home means buyers are willing to take on a more risky property or move to a less desirable location to avoid missing their chance to become a homeowner".

This means that many people – the younger age group in particular – are being "forced to be flexible about where they buy in order to get a leg up on the housing ladder," said Lindsey. "Fewer younger buyers would rule out living in areas with a higher risk of crime or flooding, and there is a real willingness to make the necessary investments in a property in order to bring it up to scratch."

Time to take action

Are you one of the many willing to make sacrifices to get on the housing ladder, or perhaps you're looking to make a collective buying arrangement with friends and family? However you choose to go about it, one thing's for certain – now could be a great time to take the plunge!

House prices may still be rising but mortgage rates are falling, which means now could be the ideal time to take the first step. Check out our mortgage best buys to see if you can benefit.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.