Tips For Saving For a Property
If you are saving for a property and trying to get onto the property ladder, it is quite likely that you are assessing all available mortgage options for the house or property you want. You will also likely either have saved up or be actively saving towards a much-needed deposit to apply in the first place to buy the property you so badly want.
With the price of properties going up in many areas of the country, saving up for a deposit to purchase a home is no easy feat. Nevertheless, it is still possible for you to achieve your dream of property ownership in the current day and climate. There are various well-accepted, tried and tested and well-established ways in which you can successfully save for a deposit, to achieve that ambition of buying your first home, making your property ownership dreams that little bit easier to achieve.
Exploring the Government Help to Buy Scheme
If you are trying to save up for a deposit, it may be worth looking to see if you meet the eligibility criteria for the government’s Help to Buy Scheme. If you meet the requirements, the amount you will need to save for a property deposit will be much lower than usual (on average 5%) and the government or property developer in question, then provides an additional amount for the remaining deposit (up to 20%).
Avoid Renting or Look for Cheaper Rentals
One of the biggest traps for people looking to get on the property ladder is getting stuck in a continuous loop of renting, which in turn will contribute towards making it increasingly difficult to save the money they need to buy their own property. However, if you are able to avoid renting, even for just half a year or a few months, it could make a huge difference to your savings pot and could be well worth the sacrifice.
Here are some things you can consider if you want to avoid, or reduce the amount you spend on renting:
Live in your family home for a few months – Going back to your childhood home could enable you to save cash to buy a property at a faster rate.
Taking on a lodger – If you live alone and have space, you could look at renting out your place to a lodger: this can give you extra income.
Downsizing your property – You may have to make some changes if you want to save for a property deposit, and this may include changing the location of where you currently rent to a cheaper area or reducing the size of your room in the property if you live in shared accommodation.
Consider Becoming a Property Guardian
An alternative to looking at cheaper renting options, you could choose another route entirely: look at property guardianship. A property guardian means that you move into a property that is a listed building either completely rent-free or at a considerably reduced rate in exchange for looking after the property and keeping it in good condition for the owner or proprietor.
Whilst property guardianship is becoming very popular in the UK, with waiting lists in many areas of the country, it could be a potential option for you in your location, and may be able to save you thousands of pounds.
Creating a Budget to Save for a Property
Of course, if you are looking to save for a property deposit, a surefire way to help you is to create a budget before you start putting the pennies away. This means sitting down and taking a look at all your in-goings and outgoings with regards to income and money and making sure that you are cutting down on any unnecessary costs.
This may mean reducing the amount you spend on things considered as luxuries such as gym memberships or the number of times you go for dinner each month.
It could also be worth taking a look at your household bills too. There may be potential savings you could make, worth a few hundred pounds a year on your bills. This is always worth looking at if you have been with the same utility suppliers for a long period of time, who tend to auto-renew your contracts and place you on the most expensive tariffs. You may therefore be missing out on a great deal on your bills. Try looking at a few comparison sites to see if you might be able to save money by switching providers of energy, phone, tv and internet contracts.
Shared Property Ownership Schemes
You could potentially reduce the amount of both the mortgage and deposit size you will need if you decide to take part in a shared ownership scheme. However, you will need to make sure you meet the eligibility criteria of this government-funded scheme. You should remember that shared ownership is not the same as a joint mortgage, such as those married couples may look at utilising to pool their incomes and deposit savings.
For example, if you currently have a household income that is less than £80,000 in total (outside of London) or £90,000 in the capital, or are currently renting a housing association building or council house, you could be eligible for the shared ownership scheme. What this means if that you would be able to purchase a percentage of a property and then rent the rest until you have bought the property outright.
It might save you a considerable amount of money and time saving up cash for a deposit if you decide to choose this option, which will allow you to better bide and make use of your time and money.