Saving up to buy your first home – 5 hints for first-time buyers
Savings are often a key factor in buying your first home. So if you’re thinking about getting on the property ladder, don’t delay, just a few changes to your spending habits will soon add up.
With our five money management hints you could be buying your dream home sooner than you think.
1. Work out how much you can afford to save
Using a budget planner could help you take control of your spending by identifying what you spend most of your cash on and possible areas to cut-back. Try this one from the Money Advice Service.
If you’re a lover and frequent buyer of takeaways, clothes, shoes, coffees, beauty treatments, music, films, and meals out, the Money Advice Service Quick Cash Finder could help you save money by looking at your regular spending habits and gives quick results.
2. Open a savings account
Opening a separate savings account means you’re less likely to dip into your savings if it’s in a separate pot. If you choose to pay your money into a bank or building society, they’ll pay you interest on it, so you’ll get extra cash as a reward for saving with them. Every bank or building society has a range of different savings products and each of them pays different interest rates.
There are lots of different types of accounts available including the ISA (Individual Savings Account) and saving accounts.
Do your research and make sure you find the best savings account for you. Visit the Money Advice Service for help on finding and comparing savings products.
If you are a first-time buyer and saving to buy your first property, you can save money in a Help to Buy: ISA and the Government will boost your savings by 25%. So, for every £200 you save, you’ll receive a government bonus of £50. The maximum government bonus you can receive is £3,000. To find out more about how the Help to Buy: ISA works visit the Help to Buy website.
3. Save regularly
If you get into the habit of saving regularly you get the reward of seeing them grow. It’s a good idea to set things up so your savings go out automatically on pay day – this way you won’t be tempted to spend what you haven’t got.
Use the Money Advice Service Savings Calculator to work out your timescales and to see how long it will take you to reach your goal.
4. Shop smarter
When you do want to make a purchase make sure you’ve done your research and remember to stick to your budget. You could make savings by shopping around and don’t be tempted to impulse buy. Try auction sites if you’re keen to bag a bargain or use online vouchers to get the best discounts and deals.
5. Save money on bills
If you’re already paying household bills, this will have an impact on how much you can save every month but you could save money by paying less so remember to shop around for the best tariffs. And it’s not just household bills where you could save, could you reduce your mobile phone bill or travel costs?
Hear how some new Help to Buy home owners saved to buy their first home.
Amy, IT Worker aged 22
Lives with partner Harleigh, aged 24
Location: Flore, Northamptonshire
Bought with: Help to Buy Equity Loan Scheme – Buyer can purchase a brand new home with a 5 per cent deposit and a 75 per cent mortgage. The remaining 20 per cent is provided by an equity loan from the government which is interest free for five years.
My dad helped us with some money towards our deposit but we both saved the maximum amount each month in Help to Buy ISA’s and made cutbacks. I stopped spending as much on clothes and shoes and we ate in a lot rather than going out for meals.
Robyn, Mortgage Fraud Prevention Investigator, aged 28
Lives with 5 year old daughter
Bought with the Help to Buy Shared Ownership - Buying a home on a part buy/part-rent basis. Run through Housing Associations, the scheme allows individuals to buy between 25% and 75% of a property and pay subsided rent on the remaining share. For people who can’t afford to buy a home on the open market.
Robyn purchased a 25% share with Bromford.
We were living in rented accommodation so found it difficult to build up savings. The only way I could afford to buy a property was to leave the rented place and move back in with my mum so I could save the deposit.
Help to Buy advice
If you’re hoping to get on the property ladder in the future why not come along to a FREE Help to Buy Roadshow. You’ll learn all about the different Help to Buy schemes and meet house builders with new homes for sale with Shared Ownership & the Help to Buy Equity Loan. You can also get a free mortgage assessment on the day and talk to solicitors about the process of buying a home.