In today’s economic climate, getting on the property ladder has never been more challenging. The label of ‘generation rent’ seems to cause set back upon set back but, fear not, as all is not lost; there is a way to save money and buy a house as well. In this article, estate agents Loveitts, share tips on how to save for your first home, how to get a deposit and what other costs might be involved when you begin to climb the property ladder.
How to save for your first house
When looking to buy a house, you should really make sure your finances are in check before making any big moves. If you’re bringing in a decent amount of money each month thanks to your job, putting a reasonable chunk of this aside is a great place to start. Even if it’s only £200 a month, it all helps towards your end goal. Before you know it, you’ll have a comfortable amount to rely on when making your big move.
If you’re already saving but want to up your efforts, using a Help to Buy ISA is a smart move. The principle is based on the government contributing to your savings in combination with the amount you are saving each month. You can save up to £200 each month and the Government will also contribute 25% of that amount into the ISA.
On average, a UK home buyer needs a 28% deposit. This may seem like a lot, but there are options available. For example, most high street banks now offer the scheme which allows people to buy a property with only a 5% deposit, meaning you can jump on the property ladder a lot faster.
The appropriately named New Starter Homes scheme was introduced in England in order to help young, first-time buyers to purchase a home with the help of a 20% minimum discount
off of the market price. In order to qualify for the scheme, you need to be under the age of 40 and buying a home where the discounted price is less than £250,0000 or £450,000 in London.
There’s no doubt that buying a house is expensive, so it’s best to make sure you’re aware of any extra, sneaky costs before you get started. Knowing about these can seem a bit daunting but means you’ll be as prepared as possible when you do decide to make your first move.
Stamp Duty - This is a lump-sum tax which anyone buying a property or piece of land costing more than a certain amount of money has to pay. The rate which you pay the tax at will depend on the cost of the property.
Survey costs - These cover a detailed inspection of a property’s condition such as structural problems or major alterations needed.
Legal fees - Carried out by a solicitor or licensed conveyor, these fees can range from £850 to £1500 (including VAT at 20%)