If we’re friends on Instagram, you’ll know that this summer Jamie and I put an offer in for a new build. We’re going to be homeowners! One of my 2020 goals was to buy a home with J, and we’ve finally made it a reality with our move-in date to be (fingers-crossed) December. So, while have some time ahead of us, I thought we could get this homeowner content started – starting with how we managed it. Keep reading to see how we saved enough for a house deposit.
Getting on the property market is SO hard nowadays. I know I was fortunate in the fact Jamie and I were both able to live with our parents up until now (apart from my 3 years at uni) and managed to save a lot more than those not as fortunate to be in that position. So, let’s get into it – here’s how we saved.
Saving for a deposit
Decide what you can afford, and set a timeline
Fortunately, Jamie and I had savings set up from before we met and were always saving, but once I got back from university we started to really consider when we wanted to become homeowners. Setting a timeline first helps you both (if there’s two of you) know where you need to be in X amount of years, and ideally, how much you need to save by then. For Jamie and I, we knew we wanted to buy a few years after I’d finished university and returned home, and in 2019 we decided that 2020 would be the year we’d actually start looking.
Although it might not be clear exactly what you can afford so early on, it’s worth looking online at some mortgage calculators to understand what mortgage you might be able to get, and therefore what’s the maximum purchase price you can get. That way, you’ll be able to set a goal for how much you ideally need for a deposit. Remember the better the deposit, the less money you’ll need for your mortgage and the less your monthly repayments will be. But don’t forget about the extra costs you’ll incur from things like solicitor fees and stamp duty too!
Set up a saving account, like a Lifetime ISA
Jamie and I both have a Help to buy ISA which we’ve been paying into for years now. Although Help to Buy ISAs are no longer available and weren’t actually viable for our purchase, there are other alternatives like Lifetime ISAs which are worth investigating. With a Lifetime ISA you can:
- save up to £4,000 a year
- get a top up bonus from government on top of this – up to 25%
- earn interest on the government bonus
Who doesn’t love free money?! If you can afford to tuck away a bit of money each month, it’s surprising how much it can quickly build up. I’d absolutely recommend opening one of these accounts as soon as possible, no matter how far away you are from purchasing – the sooner you start saving, the better. Your future self will thank you for it!
Cut down on everyday spending
Cutting down on everyday spending is an obvious one, but it’s surprising how often it can be overlooked. I was lucky with the fact that I didn’t have much of an impact from the coronavirus lockdown, and it turns out working from home every day is a LOT cheaper than being in the office.
One exercise Jamie and I did was look at our everyday spending – unnecessary trips to McDonald’s at the weekend, buying lunches out and subscriptions we didn’t necessarily need anymore. Could you make a packed lunch instead of buying out? Do you really need that Starbucks coffee 3 times a week? Every penny counts, so take a look at your outgoings and where you could save.
There’s no denying that saving for a deposit is hard, especially with house prices nowadays, but hopefully these tips can help. Do you have any top tips?
Lucy x
