How to start saving for your first home

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How to start saving for your first home

Home is where the heart is…

Whether you’re going at it alone, taking the next step with a partner, moving in with a friend, looking at flats or houses, you will need to start with a plan.

A goal without a plan is just a wish.

Here are our tips on how to start saving for your first home.

1) Time to start saving for a deposit. Check out the best savings accounts. Set up regular payments into your savings account and review your options each year to ensure you’re getting the best interest rate. To boost those savings, pick the luxuries that are most important to you and save on the rest as much as possible, consider downsizing to reduce your rent or move in with family. Set yourself a budget and timeframe.

2) Research the market – check out different locations and areas – do you need to be near schools or work? Check out different property sizes - if you want the property to fit a pet, partner or family, consider the long-term. Look into help-to-buy and other housing schemes.

3) Talk to your bank or contact a mortgage advisor to find out what you can afford and borrow. Is that within your budget? Look at different mortgage lengths, interest rates and repayment plans.

Bank of mum and dad? If you’re lucky enough to be able to lean on your parent(s) for financial help when buying your first home, fantastic! Be sure to check the legal process along with any implications or conditions.

Check your credit score online. Banks and mortgage companies will check your credit rating to assess the level of risk and the likelihood of you paying credit back.

4) Remember to consider fees; stamp duty, moving costs, surveys, legal fees etc. These costs will vary depending on providers/lenders, but you can get a typical idea from money saving expert.

Stamp duty is the tax you’ll pay for buying the property. As a first-time buyer, and providing the property is less than £500,000, you’ll currently get a discount on the stamp duty you pay. The amount depends on the property price – check out the Which? stamp duty calculator to find out more.

5) Bills bills bills. Remember to allocate money for monthly outgoings, such as gas, electricity, water, broadband, TV licence and insurance (ground rent and service charges for flats and apartments).

Council Tax will likely be your largest outgoing, second to your mortgage. This is payable by all homeowners over the age of 18. It’s a cost per household, not per person. You could be eligible for a discount if you are a single occupant – more information here.

6) Get excited for your next chapter. We know the financial and practical side of the process is daunting, so why not enjoy the smaller things needed for your first home and start to buy essentials, like crockery and cutlery. You could start to think about colour schemes for different rooms – setting up a Pinterest board for each room is a nice visual. Spreading the cost of household items over a period of time will make the task more enjoyable and less of a hit on your bank balance in one go. Items such as duvet sets and cushions could be part of your birthday or Christmas wish list.

And don’t forget to check out places like Gumtree or Facebook marketplace, as well as local charity shops and car-boot sales. Recycling and upcycling can be a cheaper option as well as environmentally friendly and creative – allowing you to put your own stamp on the place.

Finally, don’t forget about Buildings and Contents Insurance to protect everything you’ve worked so hard to achieve. To find out more about the cover we offer speak to one of our experts today on 0800 064 8424 or click here to a get a quote online.