A recent report has found that home buyers trying to get on the property ladder for the first time have to put down an average deposit of a whopping £33,000!
Saving up that huge sum of money is no easy task & can take a good while even for those who are financially stable. This makes it even more important for potential UK house buyers to be smart with their money and take the necessary steps needed now in order to secure a property for the future.
Below we have put together a list of 5 tips which will help you solve your property ladder puzzle and get you well on your way to becoming a home owner!
1) Give Yourself a Budget
Before doing anything else you need to sit down and work out how much money you have coming in and going out each month. This will give you a good base to work from when you decide how much money you want to save every month and then how long you have to save for to make up your required deposit.
After this work out which payments you can potentially reduce or get rid of completely. You can then formulate a budget based on your findings.
Remember budgets only work if you stick by them so if you’re going to incorporate one, be strict about it or risk having all your effort will go to waste.
2) Get a Help to Buy ISA
What is a help to buy ISA and how does it work? If you take out a Help to buy ISA the government will boost your savings by 25%. So, for every £200 you save, you will receive a government bonus of £50. The maximum government bonus you can receive is £3,000.
When you’re close to buying your home you will have to instruct your solicitor to apply for the government bonus. Once this is done the bonus will be added to the money you are putting toward your first home.
3) Stop Renting or Rent Smaller
The average UK rental value when London is excluded was £760 a month in January 2018 according to the HomeLet Rental Index. Basic math will tell you if you’re trying to save up for a house and renting at the same time, you’re going to struggle no matter how much money you make.
Your first step should be to try and secure a place to live without having to pay rent. Try approaching your parents and ask them if it would be okay for you to live with them for a time so you can build up some of your savings. Living with a friend or relative is another option. Be sure to negotiate things like bill payments and shopping in advance so there are no problems later down the line.
Unfortunately this isn’t an option for everyone so if you absolutely have to rent, try to
downsize or find a place that caters for your needs and is cheaper than where you’re currently stay.
Another alternative for those who have no choice but to rent is to find a place that only rents out a couple of rooms or just a room. This is quite common nowadays as there are many home owners out there who are struggling to make ends meet and would rather rent a room or two in their house to make some extra cash rather than having to sell their house via an estate agent or other house buying companies.
4) Reduce your spending
There are many ways you can go about reducing your spending, some of which include:
• Cutting back on luxuries (cinemas, shopping sprees, nights out).
• Changing your gas and electric suppliers.
• Reduce your mobile phone bill.
• Cancel any memberships you don’t use any more
• Think about switching to public transport (you will have to work out if this cheaper than your current form of transport).
• Get cheaper broadband.
• Consider used before buying something brand new.
• And much more..
People often find it tough to break out of old habits even if they are affecting them financially but if you’re able to pull it off you’re sure to save a good amount of cash which you can put towards your new home!
5) Borrow from Friends or Family
This isn’t for everyone but it still exists as option for many people.
If you want to or need a property fast then you can always ask your parents or other family members to lend you the money and then pay them back at a later date. This is a great, often unused way to generate the funds needed to buy a house.
That said, be thorough with your repayment plan with them and do not skip out on anything otherwise you could cause some unwanted issues for yourself at a later date.
In conclusion, the average deposit required to secure a first house is still very high but by implementing some of the tips we’ve mentioned, we are confident you will be able to get on the property ladder quicker than others!
Housebuyers4u is one of the oldest & most reliable cash home buying companies around. With over 42 years experience in the property industry the experts at our firm can help with all your property needs. We at Housebuyers4u are true cash buyers, this essentially means we buy everything with our own funds – there are no middle men involved. By operating this way we can actually guarantee a cash offer regardless of location/situation & complete the purchase of your home as quick as 7 days – no chain.