Four foolproof methods that employers can use to help employees with their housing costs

Unlike many other sources of financial strain (such as paying for a wedding, buying a new car, exotic holidays, etc), housing costs are a must-have – whether it’s buying or renting a home.

1. Help would-be-buyers to achieve what may seem unobtainable through education

For those who may be struggling financially, owning their own property can seem like an impossible dream. Having to pay rent can mean that employees feel stuck on a treadmill going nowhere. Through financial education and savings solutions, you can help them to start to maximise any spare cash. Once saving, they can be educated on how to plan their home-owner journey, in order to keep motivated.

Having a clear goal of owning their home allows them to visualise potentially reduced costs, since monthly mortgage payments can be less than rental. Education can also help them prepare to be a homeowner – including simple measures such as being on the voters’ roll, improving their credit history through the use of responsible credit and using schemes that use rent payments to improve credit score, all of which can ultimately help with their success in applying for a mortgage and being eligible for the most competitive mortgage rate.

2. Encourage homeowners to check their existing mortgage product is still the most suitable for them

This can get easily overlooked, but checking that employees are on the right mortgage product and best mortgage rate can potentially save them hundreds of pounds a month, which will be a welcome addition to the budget for anyone who may be struggling financially.

Although they may have initially signed up for a fixed-rate mortgage (commonly two or five years), once the fixed rate deal ends homeowners are usually moved to the mortgage lender’s standard variable rate (SVR) by default, which can be much more expensive. Mortgage advisers can assist staff in understanding what their different options are and whether it is worthwhile switching to another product.

3. As well as checking mortgage rates ask whether they are in the right property

It’s natural for your employees to be emotionally attached to a property, but have your staff really considered whether their property is still the right one for them? Those that have built up equity but whose children have flown the nest may want to consider downsizing to release cash for retirement and ease the cost of their housing. Meanwhile, those who have gone through life changes such as divorce or bereavement may also need to reconsider whether their property is still the best fit.

For those looking to buy a property – or to move home – adequate time must be spent in the search. Employees need to ensure that they have found the right property that best suits them, their circumstances and, most importantly, their finances. Access to expert advice at this time can prove very valuable.

4. Ensure they know all the costs they may face

Knowing all the costs involved in buying a property is vital to avoiding financial strain. Financial education focused around thresholds and tax implications, stamp duty and other major potential costs is vital. As is ensuring employees have also considered other potential costs within their planned budget – such as solicitor’s fees, insurance and even the cost of that fabulous new sofa they’ve realised is a perfect fit for their new home.

Helping staff with their housing costs through financial education can have a huge impact on relieving financial stress, allowing them to focus on what they do best and to be more productive at work as a result.