You can give yourself the best shot at moving more quickly by putting some of our top tips into action. You'll be getting the keys to your first home before you know it.
This is a budgeting strategy that really works. Each month decide how much you want to spend on outgoings like food, entertainment, phone bills etc. and then put money away in separate bucket accounts. Modern banks allow easy set-up of saving buckets on their apps and are worth a look if you’re trying to build your first nest egg.
Find a cheaper room or downsize
Rent is most people’s largest monthly expense before they own their own home, and is therefore worthy of your first attention. Saving a deposit to buy your first home takes sacrifice, but consider compromising your living situation in the short term for a quick win. Find out whether you can find a cheaper room in a different area, or perhaps downsizing. It may be an adjustment to start with, but don’t forget about your end goal.
Get a lodger
If you don’t like the idea of lowering the quality of your short term digs, you can always look at getting a lodger into a spare room of your rental. It’s important that you clear this first with your landlord, as subletting is not always permitted in a tenancy. However, if you can get approval, getting a lodger can instantly add a sizable amount to your monthly deposit savings.
The Help-To-Buy scheme is the government’s way of supporting first time home buyers who are struggling to collect the deposit required to buy their first home. It means, buyers are able to borrow up to 20% (40% in London) of the value of their home from the Government, paying no interest for 5 years. It’s not for everyone, and the property must be a registered new build on the scheme, but it can be a big help for a lot of buyers who need the support.
Bank of parents
Of course if you can, the bank of parents offers the best terms for borrowing your deposit. If you’re fortunate enough to be in a situation where family can give you a hand in buying your first home, it is worth asking the question. After all, their money will be safe as houses, and you can pay them back when you next move if your property appreciates in value.
Find a guarantor
If your parents or another generous party are willing to be a guarantor, it can increase the size of the loan you are able to get with your mortgage lender, and also reduce the interest you will pay. By guaranteeing to take on the responsibility of any missed payments, your guarantor is providing your lender a little more comfort, and they will pass that assurance on to you.
The Government’s Shared Ownership scheme lets first time buyers who earn a household income below £80k per year (£90k in London) to buy a partial share of 25% or more of a property and pay rent on the rest. The rent is usually very reasonable, and you can sell the property on when you want to via the re-sale scheme.
Buy with friends
If your friendships are up for it, buying with friends is a smart way to pool resources and get on the property ladder early. If you can handle living with each other, and have an iron tight understanding of how you will treat decisions such as when to sell, this option can propel you onto the ladder quicker than if you saved on your own.
These ideas are all worth considering when your saving for your first home. Not all of them may be relevant to you, but considering at least one of the tips could improve your position and mean you’re in your dream home even quicker.