Kevin Sims, director of SO Resi, a not-for-profit housing association, runs through the options out there to help renters get on the property ladder this year.
How to turn a free £1,000 into £2,000
Opening a Lifetime ISA (LISA) could give you a £2,000 savings boost, tax-free.
“This account allows you to save up to £4,000 each tax year, with the government providing a 25% boost of up to £1,000 each year,” Kevin says.
“Smart savers can gain extra savings by opening the account before the end of the current tax year (5 April 2025) and depositing up to £4,000 to gain the benefit. The clock will then reset on the 6 April, meaning that buyers can input another £4,000 to receive their second annual bonus in the new tax year.”
There are eligibility criteria to be aware of, so it’s important to read the fine print.
Money in a LISA has to be used either for a first home or retirement. Withdrawing it for reasons other than this results in penalties, meaning you could end up with less than you started with.
Rent to buy
“The increased cost of living has made it difficult for tenants to set aside savings for a house deposit,” says Kevin.
“Rent to buy allows tenants to sign a fixed-term contract on a new home, which will see them pay rent at a subsidised rate. This lower rent provides tenants with the flexibility to save for a deposit if they choose to do so, and at the end of the tenancy will be able to purchase the home they are living in using shared ownership.”
This scheme is also available in London as “London living rent” – though again, there are eligibility criteria.
Shared ownership
“For some aspiring homebuyers, a serious challenge is that they simply just aren’t eligible to take out a big enough mortgage to buy a home,” says Kevin.
One option could be shared ownership.
Kevin explains: “With shared ownership, buyers can typically purchase between 25%-75% of the property, paying a mortgage on the share that they have bought and a below market value rent on the remainder.
“Shared ownership makes getting onto the property ladder much more accessible, especially for those on a low wage. As your financial position improves, it’s possible to increase ownership in your home, and achieve 100% ownership over time through a process called ‘staircasing’.”
