We’ve all seen the chaos in the housing market lately. Prices have risen by more than 12% in the last year, and although rate increases are slowing – and potentially set to begin to decline somewhere in the near future – getting a foot on the property ladder presents a sizeable challenge for first time buyers.
If you are a budding buyer, what are your options, then? Below are four of the staples for would-be house-hunters in finding the funds to afford a first home.
Tighten the purse strings when it comes to luxuries
If you’re going to save up for that all-important deposit, you’re going to have to make some fundamental changes in how you’re living your life. One of the first things you need to do is cut out those unnecessary luxuries – we’re talking that morning Starbucks coffee, the evening takeaways and the one-too-many socials with friends.
You might already be doing that. If not, try the coffee thing at least – Which reckons you can save over £1,000 by switching to instant coffee if you normally buy daily from your local coffee shop.
Get into good saving habits
Saving is one of the things that you just need to get started with to make a habit of it. These days, that’s easier than ever. Get yourself a regular savers account, for example, and set up your account so you immediately deposit £100 (or whatever amount you can afford) in it every payday, and you’ll quickly see the pounds pile up.
Seek help from ‘The Bank of Mum and Dad’
There is no shame attached to getting help from your parents or other family members when it comes to buying your home. For plenty of Millennial and upcoming Gen-Z buyers, ‘The Bank of Mum and Dad’ has played a fundamental part in helping them afford the deposit that’s so hard to save up for (and trust us, the interest rates are much, much kinder).
To offer some reassurance on how common this is, data from Zoopla revealed a staggering 64% of parents have helped their grown-up children get onto the property ladder financially, with another 10% saying that while they didn’t personally, other relatives did.
Take advantage of the schemes available
There are a number of schemes out there to help you get your first house. Lifetime ISAs and the Help to Buy scheme are the main two you’ll want to look at. The first provides you with a 25% bonus on any savings you put in up to the value of £4,000 each year (meaning you’ll actually get £5,000 a year from £4,000 deposited), while Help to Buy means you can get a mortgage with just a 5% deposit as opposed to the usual 10%.
You can find out about both of these schemes and more here.
There’s no doubt buying a house for the first time presents a significant financial challenge for most new buyers. However, by taking a look at your financial discipline, investing in good saving habits and maybe getting a bit of help from those closest to you, coming up with the deposit needed to get on the property ladder might be more achievable than you think. Lifetime ISAs and the Help to Buy scheme