Smart FTB Strategies: unlocking the magic of house hacking

We know how crucial it is nowadays to find ways to ease those mortgage costs and make your homeownership dream a reality. This is especially true for First Time Buyers who are probably at their most financially stretched and haven't yet benefited from home equity growth. Sadly, the UK might not have as many options as other countries, there are still some exciting house hacking strategies for you to explore.

First up, the classic option: house sharing. You can take in up to two lodgers to live with you and help cover your mortgage and bills. It's even better because the government supports this through the Rent-a-Room scheme, allowing you to earn up to £7,500 per year tax-free! That's a fantastic £625 per month.

Of course, there are some conditions to meet, like sharing facilities and living in the property yourself. But, it's a great way to have some company, if you live on your own and increase your home's security when on holiday as you home isn't left empty.

Check with your mortgage broker to ensure your FTB mortgage terms permit lodgers, most do, but its always better to check than assume. A few mortgage products even let you include the rental income in your mortgage affordability test. How cool is that?

You will also need to inform your insurers about lodgers to avoid any coverage issues. And do some research on the pros and cons of taking in lodgers to make sure it suits your lifestyle. Not everyone wants to share their home. Some value their own space above the tax free rent they can achieve. And that is absolutely fine, if you can afford your living costs on your own.

For some, having a couple of lodgers won't be enough and then a more extreme solution might be better. Once you've lived in your home for a minimum of 6 months (some lenders require 12 months) you could potentially move out of your home, rent it out, and find a more affordable place for yourself. Mortgage lenders understand that circumstances do change and hopefully this will only be temporary having only just bought your dream first home. You will, importantly, need to speak to your mortgage lender first and get a Consent to Let from them. Some lenders are cool with it and let you just get on with it, but others might require you to change your mortgage product. And some might not hold a banking license which enables them to give a Consent to Let, so they may require you to refinance your mortgage elsewhere. Keeping those communications open with your mortgage lender will be key to knowing which outcome you will be able to achieve.

Knowledge is power! Be aware of the terms and conditions of your mortgage agreement, even if you're still hunting for your first home. These are easily downloadable from most mortgage lenders' websites so that you can read them freely in advance. Then, if you decide to dive into the world of house hacking, you'll be all set and ready to go.

Remember, there are some hoops to jump through, but with the right know-how and the willingness to share your home, you can make it work and enjoy the magic of house hacking.

Empowering you as you hunt for your first home.