My First Property

Saving For A Deposit

In order to buy your first house, you will need a mortgage (unless you have considerable wealth behind you that is!), and in almost all cases you will need to save a deposit in order to be able to get onto the property ladder.

Typically you will need to save in the region of 10% the value of a house, and if you are looking to purchase a £200,000 property, this means that you will need to have built up £20,000 in your savings account, or joint savings account, if purchasing with a partner. That can seem like a very scary figure, particularly in the current climate where food and other basic living costs are so high and there is pressure on employment and as a result most salaries are static.

How Do I Save That Much Money?

This is the question that many people want to know the answer to, as saving a sum of this size seems to be out of the question - unless they don't mind waiting until they are 50 to buy that first property. And indeed the difficulty is reflected in the fact that people are buying their first home, on average, at a higher and higher age, and many people know don't get on the ladder until they are in their 30s.

There are no magic answers either, unfortunately. It comes down to discipline with your money, shrewd use, and careful budgeting. Clearly, the higher your income the easier it can be (although not necessarily as the more people earn it has been shown that quite often the more they spend). There is one key: to save money, you need to spend less money per month than you earn.

The first step therefore is to get a clear indication of what your incoming is each month after tax. If there are two of you, then sum your monthly salaries after tax to see what you have to play with. Then work out your costs and outgoings, such as food, rent (if you're currently renting or similar) and all your standard bills, and see what you have left. Now comes the disciplined part: rather that spending that money on some great nights out, save it away in the bank. Save as much as you can each month.

Once you have worked out how much you have coming in, going out, and are able to save each month, then you can see how long it will take you to raise the deposit, bearing in mind that you may as well discount interest at the time of writing as it is going to be so low as not to make a significant difference. If the figure comes out as a depressingly long time, then consider other ways of making additional income: many people have extra streams of income these days, whether it is through doing, say, tennis coaching on weekends, or running a small online shop or blog that contributes an extra £100 per month. Every bit helps when it comes to saving the deposit on your first home.

More first-time house buying articles:

  1. Property Market Outlook Spring 2016
  2. Find Houses That Have Dropped in Price
  3. Finding Property at a House Auction
  4. Finding a Property & Location
  5. Will House Prices Rise in 2019?

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