Home Ownership 101 – A guide for a first time home buyer

One of the most common topics I get asked about on this blog is home ownership and tips for buying a house. For a first time home buyer the process can be very daunting but this rarely deters people.

Therefore, I’ve decided to run a series of posts on buying your first home and the important things to consider when taking this important step.

But first, I want to discuss why we, as a society, are so attached to home ownership. For many its seen as a great success and an ultimate goal in life – even if they have to take out a large mortgage to pay for it. There are a lot of different arguments for and against home ownership. I’ll aim to outline them to hopefully help you make an informed decision.

Of course, it is a personal decision so don’t be swayed by what other people are doing and take independent advice if necessary.

In this post I’ll cover:

  • Why we’re so attached to home ownership
  • Whether the housing market is fundamentally unequal
  • Whether this should alter your views on buying a property
  • What your next steps should be

Why do we care about buying our first home?

Not all countries are as attached to owning a home as we are. In fact, in some, like Switzerland, renting is the norm and owning a property is not considered important.

The argument is not clear cut either. Many people actually end up losing money on their homes, despite selling them for an increased price. This is because you have to pay interest on your mortgage and real time inflation means price increases are not as great as they first seem.

Additionally, owning your own home comes with a financial risk. If you can’t keep up with your mortgage payments you can lose your home, along with the savings you placed into buying it. After the 2008 Global Financial Crisis there were 9 million evictions in the US alone.

But despite these risks, many still see the value in owning their own home. The attraction ranges from simple pleasures, like being able to decorate as you please or have as many pets as you like, to security concerns, such as being comfortable in retirement. Many worry about having to pay rent when they no longer have a monthly salary. Owning your own home outright can offer your peace of mind.

Another benefit is you always have the option of renting out part or whole of the property if you need some extra income.

Is the current housing market fundamentally unequal?

The global value of real estate stood at US$217 trillion and representing 60 percent of all assets, with residential real estate comprising 75 percent in 2016, according to Savills. Given the movements in the past four years, this value is likely now even higher.

This has come at a great cost, particularly to those in need of adequate housing. Many residents have effectively been ‘priced out’ of their own markets. Financialised housing markets actually create and thrive on gentrification. Impoverished neighbourhoods may benefit from improved services, schools or parks, designed to support residents, but this in turn attracts investment from external sources and drives the original residents out.

An example of this can be found in South Africa, where private investment in the urban core of cities has sustained the discriminatory patterns of the apartheid area, with wealthier, predominantly white households occupying areas close to the centre and poorer black South Africans living on the peripheries of cities. This serves to perpetuate the poverty cycle, as the poorer residents live in areas with less employment opportunities.

Increased prices of housing and real estate assets have become key drivers in the creation of greater wealth inequality. Globally, there has been vast amounts of money put into housing, but hardly any of it has been directed towards ameliorating the insufferable housing conditions in which millions live.

Should this stop me buying a home?

In short, no. It is possible to buy a property without contributing to the unequal market and a first time home buyer should not be deterred.

Owning a home can be a great asset and a significant achievement for an individual, as well as offering security.

However, it could be worth taking certain things into consideration if you’re concerned about making society less equal.


Often these areas are described as ‘up and coming’. House prices tend to be lower and development may be happening to make the area seem more ‘desirable’. This can be attractive for a first time home buyer.  But, as mentioned earlier, the problem with this is it drives house prices up. This can force long-term local residents out of the area and potentially out of the housing market completely.

Over-priced houses

In some cases, property prices can get out of control and properties can cost a lot more than they’re actually worth. For example, one-bedroom flats in Central London can cost over £600,000 – clearly far more than one should cost. However, demand allows sellers to charge this much.

Just because you can afford it doesn’t mean you necessarily should or that it’s automatically a good investment. If you do choose to buy an overpriced property you may be contributing to driving up house prices. This will make it harder for others to afford basic housing.

Am I positively contributing to the local community?

Will you contribute to the local community and support local businesses and events or will you be looking to change things? If you’re going to spend all your time in a nearby town or city what value are your adding to the area? Or are you just potentially driving up house prices? Of course, for homeowners, increased house prices is a good thing, but it is possible to make a positive difference while making money.

What are the next steps for a first time home buyer?

If you’re looking for help buying a house, then you’ve come to the right place. As mentioned earlier, this is the first instalment of a series of posts about buying a home. I plan on covering saving for a deposit, choosing and applying for mortgages and the legal aspects you need to consider.

However, the first step is very simple. Have a look online or in your local estate agent at how much the sort of property you want to buy will cost. House prices are subject to change, but this can be a useful guide.

Then consider how much you will need to save to put down a deposit and afford mortgage payments. Many places will take deposits as low as 20 percent, but this comes with significant financial risk and a larger mortgage. In the current climate, where jobs are not secure and the economy is unstable, it could be advisable to try and put down a larger deposit.

Once you’ve established how much you need to save, you can start planning. A budget can help with this, but I’ll go into this in more detail in my next post in this series.

If you found this post interesting, please like it and share across social media or send it to your friends. I’d also love to hear your thoughts and experiences, so please do leave a comment! Is home ownership important to you? Are you hoping to become a first time home buyer?

19 responses to “Home Ownership 101 – A guide for a first time home buyer”

  1. […] of the most common money goals for people in their 20s is to get on the property ladder. But getting a deposit together is proving harder and harder. If you’re finding yourself in this […]

  2. […] to illustrate a point or for general interest. For example, I may explain in a post why I have a Help to Buy ISA and how it works for me. However, this doesn’t mean it’s the right decision for […]

  3. […] Buying your first home can be a daunting process. House prices are high and with all the pressures on young people, buying a property can seem like a near impossible task. But there is support when buying your first home available. […]

  4. […] Home Ownership 101 – What’s the deal with it? […]

  5. I love this post and any posts about housing always grabs my attention. Can’t wait to see more from this series.

  6. I love this post and I couldn’t agree more: not all houses and post codes are created equal. In saying that though, I personally have bought in up and coming areas that are undergoing gentrification now. I’ve since more than double my money, which is nice. Back then, that was all I could afford but now, I can afford to semi-retire in my 30s because of those properties.

  7. I took an AP Human Geography course in high school last year and we learned about gentrification! Can I just say that I felt so proud to know what gentrification meant?! Also, I loved reading this whole post! I don’t own a house yet, but will be helpful for the future!

  8. This is such a great and informative post. Being a home owner is so rewarding!

  9. Sue Berk Koch – I write a monthly science blog and have a chemistry book for kids!

    A thoughtful and interesting post. Thanks so much for breaking down the pros and cons of home ownership.

  10. lifestyleseason – Lifestyle, Fashion & Beauty Blogger!

    Great post! Thank you for sharing this! The advice is very useful and I’m looking forward to the series!

  11. Paige – UK blogger behind PaigeEades.com :: 19 :: BA business management :: university student ::

    These are some great advice pointers here – and things worth considering. My boyfriend and I would like to buy our first home within the next few years (wether we can afford to do that is another question); but definitely see the benefits of renting too! Thank you for sharing Katie!

    Paige // Paige Eades

  12. a Life on a Dime – I am a wife, mom, Jesus lover, homemaker, blogger, and now YouTuber! I love writing about budgets, DIYs, minimalism, and essential oils.

    These are great tips! Homeownership is definitely the American dream!

  13. cherbelle – I am a 22 year old lover of words, aesthetics and anything that truly inspires me. I am currently based in South Africa but I cannot wait to spread my wings and relocate. I am studying working and chasing my dreams of being able to live my life as a creative.

    Thank you so much for sharing , Katie ! This should be so helpful for someone looking at home ownership. Here in South Africa, home ownership is also very important rather than renting to this was a relatable and informative read.

    1. The Twenty Percent – United Kingdom – Hi I'm Katie and I use my blog to help young people take control of their personal finances.

      Thank you, I’m glad you found the post useful!

  14. Great post! Very informative, especially as we are in the midst of an increase in home buying due to low interest rates for mortgages. Really like your point when you said, just because you can afford it doesn’t mean you should. Buying a home should be seen as an investment and although much is out of your control with market fluctuations, there are many ways to increase your chances that your property will appreciate over time.

  15. This is incredibly interesting. My husband and I just became first time homeowners, but only because I received a small inheritance. Homeownership is permanently out of reach for many in our peer group, because we live right outside of Washington DC and the housing market in and around the city is absolute madness! I like to stalk real estate websites (I’m just curious how much some of these places in the city cost) and the prices are just disgusting. Plus gentrification in the city is getting out of hand. Thank you for taking a look at the bigger picture of the state of real estate.

  16. It’s been 5 years since I bought my house and I can tell you these topics all rang true back then! It was a good refresher for me now that my husband and I are considering expanding. Good article!

    1. The Twenty Percent – United Kingdom – Hi I'm Katie and I use my blog to help young people take control of their personal finances.

      Thanks so much for reading!

  17. Hey Katie, thanks for sharing your thoughts and research on home ownership! In Singapore, my government viewed home ownership as a public good in the early years of nation-building. They made it such that everyone SHOULD have a roof over their heads (usually it’s in the form of public housing). The funny part is that it’s a 99-year LEASE agreement, but we view that synonymously with ownership!

    Despite these ideals, it’s still costly to own a flat in Singapore that’s built and sold by the government. Just the other day, a 5-room flat that’s 20min away from where I live by public transport was sold for over a million dollars! It’s not even within the city area. It’s only midway to the city from my place! It sure is crazy over here.

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