Budgeting your money and controlling your income against your outgoings can help you keep on top of your finances and discover where you can make cutbacks to help save towards your deposit.
It is important with your budget to consider unexpected costs that may occur and be sensible in your estimates. For example, if you’re feeding a family of four, a budget of £100 a month on food is unlikely to be achievable and it would be better to overestimate your food bill, leaving you with some extra food money for the following month.
Making cutbacks doesn’t have to be painful. The easiest way to save is to make sure you’re not overpaying on your gas, electric and various insurances.
Changing your provider and finding better deals can help you save up to £200* a year towards your deposit and speed up the process of getting on the property ladder. Whilst you might not think you spend a lot on going out, cutting back here and thereby reducing the number of times you eat out, you may start to see the savings pile up.
Take advantage of government schemes
The government has introduced a number of different Help to Buy schemes you may be able to take advantage of, all of them aimed at those struggling to get to where they want to be on the property ladder:
Help to Buy Equity Loan: if you are a first-time buyer and interested in a new build, the government will lend you up to 20% of the cost of your new build home in which you will only have to find the minimum 5% cash deposit.
Lifetime ISA: if you’re a first-time buyer, the Lifetime ISA acts as a savings account with a few added benefits. You can pay up to £4,000 each year into your account and receive a 25% bonus (£1,000 maximum) from the government.
The bank of Mum and Dad
Borrowing money from your Mum and Dad can be a quick way to help buy your own home years earlier than you would without their help. If your parents are willing to help you financially, just be aware that there’s a set procedure to follow, as this money must be officially gifted.
You might also consider a ‘guarantor mortgage’, which is a popular option with first-time buyers. If your parents (or close family member) is willing, they can use this mortgage type to act as your guarantor and promise to the bank that they’ll cover any repayments, should you be unable to.
Still feeling lost about getting on the property ladder? Please don’t hesitate to get in touch if you need help buying your first house.
*according to Department of Energy and Climate Change Government Statistics