If you are a home seller, it is going to be easier to find a buyer if you put a starter home on the market. First time home buyers are choosing from smaller properties, even ones in need of care or upgrades and improvements. Higher priced and larger homes are going to stay on the market longer because homeowners are not moving home as they had before, preferring instead to stay put rather than upgrade to a more expensive property while interest rates are more costly. According to recent data from Halifax, first time buyers are in search of smaller properties than they were when the pandemic lifestyle was the main driver of home buying.

The housing market looks much different than it did when the pandemic was the main influence of purchasing. No longer are home buyers fighting to buy properties outside of the city and instead are seeking easy to find amenities made available by higher populations. Personal green space is being swapped for parks and public green spaces. Pets no longer are contained to home garden areas but are walked out in public for exercise along with their owner and home offices are no longer needed as people return to work.

House prices are still elevated from the pandemic lifestyle buying boom, and along with higher interest rate mortgages it has pushed many first-time home buyers out of the options offered just two or three years ago. Finding affordability an issue, those determined to climb the property ladder are getting help from family and friends to afford deposits and are turning to small properties and in some cases taking on DIY project homes. 

Others are buying multi-generational homes where Mum and Dad can privately live and retire, while the growing family takes on the larger part of a home. Some are seeking homes where they can lease out the larger part of the home while living in the smaller area and using the income to pay down the mortgage while they await the opportunity to grow their family and afford the bulk of their mortgage and in turn leasing out the then smaller area.

There are options available to first-time buyers, and even those choosing to move home, so long as they are creative and perhaps unconventional in their path to ownership of their ideal house. 

The opportunity to be a homeowner while also bringing in a rental income to help keep mortgage expenses down is a popular and new unconventional strategy. Either starting out in the larger area of a home and leasing the smaller and choosing one day to downsize to the smaller or the opposite and growing into the house and larger cost of the mortgage is an option that could be the smart failsafe option. It provides income and assistance with mortgage costs when the economy switches to be more difficult such as when inflation grew to double digits, and it offers peace of mind that there is a savings opportunity built into the property structure.

The income could be used to pay down the mortgage debt faster or make it more affordable. It could be used to do expensive upgrades and improvements, perhaps offering more savings for the homeowner if they choose to do energy savings upgrades. 

There is also the option of buying a property with room to build a secondary property and selling one to pay off the other. In busy tourist areas, or during calendar events that bring seasonal visitors to the area, and depending on local restrictions, some home buyers could purchase a property knowing they will do short term rentals to bring in income toward their mortgage debt. 

Legal restrictions should be carefully reviewed with an expert to determine what the property can or cannot be used for in terms of leasing, short term rentals, or the intent to build or change the property to allow such use for income. Doing so could put the home buyer in a position to take advantage of the fact there is a definite need for rental property and some renters enjoy the sanctuary of being the only renter on a property versus a row of rental flats. The individuality and uniqueness of a home rental unit often brings in higher level rental fees.

The possibility of becoming both a homeowner and a landlord with one property also brings responsibilities that need to be taken into consideration such as taxes, fees, insurance, and maintenance of the rental area as well as the personal living area. 

Some homeowners considering this option due to their need to downsize or bring in monthly income could remortgage to free up their equity into cash for needed upgrades, improvements and changes to the property to allow the rental use. An equity cash release remortgage offers cash in hand to pay for needed expenses. 

As supply remains low in the housing market and a possible buying boost could be on the horizon should the Bank of England’s Monetary Policy Committee (MPC) cut the standard base interest rate, there are creative options available to home buyers and home movers intent on not only buying, but creating an income opportunity or buying a lower cost property that may not be the dream home just yet, but will be after personal effort and investment slowly evolves it into the desired condition. 

Also, it should be noted a home that can produce leasing income or one that is personally invested into substantially increasing its value is more likely to yield a greater profit when and if the homeowner chooses to sell.