If you’re thinking about taking your first step onto the housing ladder then I imagine the amount you’ll need to save for a deposit is front of mind, which is hardly surprising when the figure is typically around five to 10 per cent of the house value.
I think that saving for a deposit should be seen as a marathon, and not a sprint – it takes time.
It’s easy to get caught up in the excitement of buying your first property, especially if friends and family are also embarking on the same journey, but rest assured, by committing to saving a healthy deposit you’re much more likely to reach your goal of becoming a homeowner.
According to Rightmove, the average house price in Saffron Walden during the last year was £471,862. The majority of sales were terraced properties, selling for an average of £399,776.
That means a first-time buyer, purchasing a terraced property in Saffron Walden is looking to pay between £19,988.80 and £39,977.60 with a five to 10 per cent deposit.
In this column, I explore some of the options available to first-time buyers in the UK to help them on their way towards home ownership.
1. Reduce or remove rental costs. With average house prices creeping up over the years, it’s no surprise that the age of first-time buyers is also increasing. Data shows that in 2022 the average age of a first-time buyer was 32. Furthermore, the average age of people living in the UK in private rented property is 41, which means it’s likely many first-time buyers will be in rented homes while trying to save for a deposit.
Possible ways to reduce monthly outgoings might be downsizing or relocating to a lower-cost area, entering a flat share, or even considering moving back in with family members while you save.
2. Consider government schemes. Find out if you’re eligible for any of the government’s help-to-buy schemes.
We’ve outlined some below with details on how to find out more. a. Affordable Home Ownership: you may be able to get financial help from the government to buy a home through shared ownership, or through a loan to help with the cost of building your own home.
Find out more here: www.gov.uk/affordable-home-ownership-schemes.
b. First Homes: as you’re a first-time buyer you may be able to buy a home for 30 to 50 per cent less than its market value.
To be eligible, the property needs to be either a new home built by a developer, or a home bought through an estate agent which someone else bought through the scheme. Find out more here: www.gov.uk/first-homes-scheme.
3. Be savvy with your savings. Once you decide to start saving for a deposit make sure you do your research on where best to keep your money.
Don’t save your house deposit funds in a low-interest current account – look into ISAs and other fixed-rate savings options that will give you a better return on your money. Why not visit us in branch to find out how we can support you?
It’s safe to say that buying your first house is likely going to be one of your biggest financial commitments. I urge people to keep an eye on the market and fully consider all their options before embarking on the purchase of a lifetime.
While there are lots of things to consider, the feeling you get when you cross the threshold of your first house is truly one of those ‘pinch me’ moments and one it’s unlikely you’ll ever forget.
If you have a question for our next column, please email us at askjess@saffronbs.co.uk.
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