Around 80% of Britons prefer to own their own home rather than rent, but saving up to start the ball rolling is one of the biggest challenges that first-timers face. Saving that deposit up can sometimes seem like an impossible task, but it can be done with patience and smart planning.
Have a cunning plan
Or at least, a plan. Usually, you’ll need between 5% and 20% of the asking price of the home you’re after. So, if your ideal house is £200,000, you’ll need at least £10,000 to even start talking to the bank. If you can get more together, you’ll have access to better mortgage options. Don’t make any moves until you have your minimum amount in the bag.
Then you’ll need to think about survey fees, conveyancing fees, commission fees, removal fees (are you seeing a theme here?), building insurance, Stamp Duty… It all adds up, so you can expect to have to double the amount you’ve saved on your deposit. It can feel like pushing an elephant up a hill.
Curb your spending
Well, obviously. However, a lot of people don’t really look at what they spend each day, week, month and year. Taking your own coffee into work in an insulated mug can save you £600, switching to a council-run gym from a private one could save anything from £500-£1,000 a year, having a takeaway once every two weeks rather than every week could be another £250. Throw in some careful supermarket shopping and voucher-hunting and you’ve saved £2,000 or more. That’s your estate agent commission right there…
Also, being careful with money looks good on your credit rating, which means a few more mortgage choices – a bigger loan means a smaller deposit, so you’ll be ahead of the curve.
Do your homework
The government has rolled out some schemes to help first-time buyers onto that ladder, so if you’re eligible for any.
Help to Buy – this could help those with small deposits as the government tops up your deposit savings account; however, there are limits on the values of the properties you can buy.
Rent to Buy – this scheme helps tenants in England, Wales and Northern Ireland to buy homes from their local council.
Shared Ownership – this means you buy a share of your home from the landlord – usually the council or housing association – and rent out the remaining share.« Back to Latest News