My First Property

Budgeting & Saving Tips

When it comes to buying your first-home, affordability is top of the considerations - or should that be worries - of most first-time purchasers.

So, how long would you expect it to take to save a deposit? Most first-time purchasers would want the process to take as short a time as possible, but realistically, what is the answer? This depends on savings already in the bank, salary earned, costs and so forth - but a realistic amount might be about £4,000 a year. Break that down, and it comes in at £333.33 each and every month.

Now, if the average house price is around £160,000 (and, roughly, at time of writing it is around that mark) that gives you a total of four years of saving at the rate above in order to get that 10% deposit.

How do you go about saving that?

There are various ways. But the bottom line is that you need to earn more after tax then you spend during a month, and THEN ciphon that extra cash straight into a savings account where you aren't tempted to dig at it. Consider getting an account that pays higher interest but only if you don't make more than one withdrawal during a year (or similar) - that way you get more interest and it also removes the temptation to dig into that fund for non-essential purchases: and whilst saving for a deposit, as hard as it sounds, you should try to viewing nothing as an essential purchase other than that first house when you finally have enough money in place!

Where should you save? Well interest rates are pretty low, but within each bank or building society there are usually accounts with more attractive rates - as mentioned above often these have a one-off bonus each year assuming you meet some conditions such as paying a certain amount in each month or making less than a given number of withdrawals. You might also consider saving with the bank or building society you think that you will try to get your mortgage with... that way you already have a relationship with that bank or building society and so when you approach them for a mortgage you are already set up with them and they know something about you.

There is no doubt that saving takes discipline, and particularly when many have grown up in a period of time where debt seemed to be emphasised much more than having actual money - the 'put it on the credit card and worry about paying it off later' but you need a sea-change in mentality to successfully save for a house. Cut out all the costs you can - and if you smoke then see this as a double-positive: you can save a fortune by giving up and also make your life healthier too! Other than that, try taking holidays at home rather than abroad, cut down on socialising that costs money, go for a jog instead of paying massive gym fees and much more besides: basically examine your costs in each area of your life and you may well find ways to cut down without impacting too heavily on your life.

More first-time house buying articles:

  1. Why People Sell Property via Auctions
  2. Stamp Duty Explained
  3. The Key Purpose of a Second Viewing
  4. How To Find an Affordable Property
  5. What is a Mortgage?

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