It’s no secret that saving for your first home is a daunting task, to say the least. For most of us muggles it is very upward climb that can take the best part of decade to conquer these days. House prices are ever climbing, at a rate which is not so in line with salary increases unfortunately. But it is still very possible to get on the property ladder in your twenties, despite so many people not managing it until their 30’s, it can be done. And it’s not that hard if you’re committed. I’ve talked previously about our property search, and the struggles we’ve had so far, but I’ve not really posted much helpful content on the subject… So, I thought I’d come on here today and have a chat about the things I’ve learnt from my money saving journey over the past few years (and the rest). Wild, I know.
1. You don’t have to move back in with your parents to save.
To be quite frank, I couldn’t think of anything worse (no offence, Mum). I think once you’ve moved out of home, there should be no going back, within reason of course, for some it’s what works best I know. Naturally we all hit an age in our early twenties where it’s a necessity to have our own space, it’s worth so much to our quality of life, and our independence as adult human beings. Which lead onto a sneaky part 2 of this myth busing… renting is not the end of the world. So many people write off renting as ‘dead money’, which I totally get, you’re effectively paying someone else’s mortgage which is frustrating. BUT you’re getting to live in your own space, with the flexibility of being able to move on at the drop of a hat (or a month’s notice…) if you so wish. Swings and roundabouts.
Another factor here is if you are saving to buy with a partner, PLEASE live together for a while first. You may think you know someone because you stay round each others houses all the time and have been on a 2 weeks holiday together. But. it. Is. Not. The. Same.
When it’s your own home, it’s different. It takes a long time to get into the rhythm of living with someone. Luke and I had been together for 5 years when we moved in with each other, with a year of that consisting of staying over at each others (parents’) houses every night, and many successful (as in, we didn’t kill each other) holidays together under our belts. But let me tell you, it’s totally different when there you are sharing a space 24/7.
Don’t get me wrong, I am happier than I have ever been now that Luke and I live together, but it definitely came with an adjustment period, and for some couples, it really goes left at that point. I’ve seen that happen a few times. So please don’t add the stress of a 30 year mortgage looming over you at that time too. The phrase ‘learn to walk before you can run’ exists for a reason people, there is no rush!
2. It’s not actually that hard to save money.
It’s all about self-discipline and organised budgeting. Simply analyse your monthly take home pay, take off rent and bills, then allocate yourself a pretty conservative weekly budget to live off, and move the rest into savings AS SOON AS YOU GET PAID. I personally have 2 direct debits set up for pay day every month, so as soon as any salary hits my current account each month, £200 bounces straight into my HTB ISA (the maximum you can pay in each month), and then another chunk diverts into my regular savings account. That way it’s just like that money never existed, but you can pretty satisfyingly see your savings accounts steadily building each month. That way, saving for your first home is much less strenuous on your monthly balance as it seems if the money is there in your current account to tempt you. It might take a bit of trial and error to work out just how much you can live off each month, but if you really do want that house, you’ll manage. We don’t need to buy as much as society makes us think we do.
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3. A HTB Mortgage isn’t always the best idea.
5% deposit. Very tempting. I know everyone’s situation is totally different, so I am not speaking on behalf of everyone with this one. However I think the Help To Buy Mortgage’s are marketed so attractively that people often get in out of their depths on their first property. The reason I’m sceptical is you aren’t certain as to what your additional monthly payments are going to be when it gets to 5 year mark, and for a control freak like myself it’s not ideal. You will likely be better off saving for a bit longer and fronting up a 10-15% deposit on a standard mortgage if you can afford to do so. That way you don’t have all that extra faff to worry about. Plus if you sell within the 5 years then you owe the 20% of whatever your property is worth straight back to the government from the sale. And contrary to what I’ve said already, if you do have the financial benefit of living at home rent-free in the mean time, than definitely push for a regular mortgage, shouldn’t take you all too long to save that extra 5% in the grand scheme of things.
Just a couple of points to bear in mind when saving for your first home. As I said already, everyone’s situation is totally different so this is only based on my own experience, I’m no property expert! Anyway, hopefully I won’t be saving for too much longer, Luke and I are well and truly on the hunt for our first home and I’m praying it will happen for us sooner rather than later. I hope this post was at least a tiny bit insightful to someone out there reading this, I know how daunting the whole house hunt process seems at the start, no one prepares you for that!