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The best way to save for your first home

When you think about saving for your first home, it may feel like an impossible task. In the past you may have saved for things like a holiday or a car over a year or so. But to save for a deposit and to buy a home, it’s likely to take several years and you’ll need to save thousands - if not tens of thousands - of pounds. However, saving for a first home is easier than you think.

How much money do I need to buy a house?

We’ve found that the average first time home buyer in the North East needs to save around £6,424 for a 5% deposit on their first home, compared to a first time buyer in London who would need to save £24,000 for a 5% deposit – and that’s a big first hurdle to overcome if you don’t know how.

Region

Average first-time buyer price

5% deposit

London

£423,730

£21,186.50

North East

£112,744

£5,637.20

East Midlands

£158,642

£7,932.10

East of England

£245,069

£12,253.45

North West

£139,567

£6,978.35

South East

£261,957

£13,097.85

South West

£213,792

£10,689.60

West Midlands Region

£162,948

£8,147.40

Yorkshire and The Humber

£138,559

£6,927.95

England

£208,378

£10,418.90

The good news is, if you create a plan to save, and stick to it, you’ll be surprised how quickly you can secure the money you need; whether you are at home or even if you’re renting. Trust us: no matter what the media may tell you, even millennials can afford a first home.

How to save for a house...and still enjoy your life!

Budgeting sounds like a miserable thing to do, as it makes you feel you have to account for every penny you spend. But if you want to buy your first home, this is unfortunately the first step you need to take.

However, rather than seeing it as a miserable chore, taking the time to put together a strict budget can actually throw up some nice surprises. For example, you may be paying for a magazine subscription you don’t need anymore, or have signed up to a credit card with an annual charge, only to find there is now a much better deal available.

Knowing what money you have coming in and what you spend it on can really help you work out how to save for a mortgage. Most satisfying of all is finding out where you can make your biggest savings – and you may discover you can stop spending money on things you won’t actually miss.

Alternative birthday presents could help you save for a mortgage

A good example of where you can save some money is on birthday and Christmas presents.

If you have a good group of friends and you all want to save for something, you could agree to not buy presents. This doesn’t mean you don’t celebrate though. Instead, why not go out for a meal and agree that everyone chips in to pay for the birthday person’s meal? Alternatively, you could throw a party at someone’s home for them, saving even more money.

However, if you really want to buy presents, put a limit on what you spend and try your hardest to stick to it. You could turn it into a challenge and see who can get the most inventive present for under a fiver or a tenner.

We’ve all had unwanted presents, so another way to save is ask friends and relatives for financial gifts towards your deposit, rather than a present going to waste. Better still, to help you save regularly, stop buying things like clothes and shoes for yourself. Instead, put them on a list and ask people to buy them for birthdays and Christmas presents - they’ll probably be grateful for the help, plus you’ll save more money and reduce the number of unwanted presents in the process!

Save money for your home faster while getting fit, and being social

Do you like to keep fit? Have you ever questioned how much you need to use your car? And did you know you can spend hundreds of pounds a month alone just running a car?

Ask yourself whether you could switch and use the bus, walk or even take a bike instead. Walking a bit extra each day can help you lose physical pounds and save money towards your deposit at the same time.

Even if you aren’t bothered about getting fitter and really want to drive to work, could you car share with someone and save money? Your company may even offer a scheme you can join - it’s worth asking the question!

Don’t be afraid to ask questions or get advice

Getting financially ready is the biggest step you can take towards getting ready to buy your first house, but it’s also important that you're not afraid to ask for help. Mortgage advice can put your mind at ease, help you figure out what your next steps are, and point you in the right direction when saving for your first home.

There are mortgage advisers who are experts in each of these areas, and will be more than happy to answer any questions you might have. No matter how silly you think your questions may be, we guarantee you won’t be the first - or the last - person to ask it! Get in touch today to find out how we can help.

 

Because we play by the book we want to tell you that…

Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1%, but a typical fee is 0.3% of the amount borrowed.

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