Guest post by: Compare My Move
There’s no denying that it’s even more difficult to get on the property ladder today than it was just 20 years ago, with figures showing that house prices have risen by 152% in the last two decades, but the average salary has only increased by 22%.
Despite an abundance of negative stories and statistics surrounding house prices recently, it is possible to buy a home in 2018.
There’s a variety of help in the form of government schemes that shouldn’t be under looked. Home removal and chartered surveyor comparison website, Compare My Move, have put together some tips and highlight the available government schemes that’ll help you on your way to getting that deposit.
Help to Buy: ISA
The hardest part of buying a house is getting together a deposit. The Help to Buy: ISA will act as an incentive to start earning money on your savings. Deposit a minimum of £1,600 in to the ISA and the government will top up your savings by £400. If you save the maximum amount of £12,000, then you’ll have an extra £3,000 towards your deposit savings.
The Help to Buy: ISA scheme goes by each person, not each household, meaning as a couple, you could save up £30,000 together for your first home. To be eligible, you must prove that you will be a first-time buyer without owning another house.
Help to Buy: Shared Ownership
The Help to Buy: Shared Ownership scheme gives you the opportunity to buy a share of between 25% and 75% of your house’s value, paying rent on the remainder. It allows you to buy more of a share at a later date, when you’ve saved up enough money.
This scheme is suited for first-time buyers who can’t afford to pay a 100% mortgage, but if you’ve previously owned a home but no longer can afford to now, then you’re eligible for the scheme as well.
Help to Buy: Equity Loan
The Equity Loan gives you the chance to pay the minimum of a 5% deposit on your house. The government will then let you borrow up to 20% of the cost of your house. This means you’ll have a 75% mortgage without being charged fees for the 20% loan for the first 5 years of owning your home.
A variety of popular banks support the Help to Buy: Equity Loan such as Lloyds, Halifax, Barclays and NatWest and many others.
Prepare for Costs
Work out how much you’ll need for your deposit and set up a standing order of a set amount each month into any of the mentioned government schemes. You’ll soon start to see your savings building up. Factor in costs for the deposit, estate agent fees, legal fees and surveying costs. If you prepare for everything, you’ll have more of a realistic idea of the amount you need to save, without any surprise costs at the last minute.
Cut Out Non-Essentials
You’ll have to make some sacrifices when saving money for a house deposit. Cut out that daily coffee shop visit and start bringing your own in a flask. It may seem like it won’t make a difference, but if you do this for a year, along with cutting down on take-aways and meals out, your savings will soon start to build up.
If you’re renting alone whilst you save up for a deposit, try to reduce your rent costs as much as you can. Try living with other people to keep your rent down or rent out any spare rooms you may have. It’ll only be temporary as you save money, and the outcome will be worth it.
Buying a home isn’t impossible. With the available help from government schemes such as the Help to Buy: ISA, Shared Ownership and Equity Loan, along with cutting down on some monthly treats, you’ll be on your way to saving a deposit in no time.