A house is likely to be one of the most expensive things you ever buy in your life, so it makes sense that saving up the money to purchase a home is actually really difficult! There are different ways to go about getting your finances ready to make this large purchase, including various loans and schemes which can help you out. Here are some ideas to get you started.
Make saving a priority early on in your life. It is quite unrealistic to expect to be able to go out and buy a house as soon as you leave school or university, so make it easier when the time comes by starting to save as soon as you have an income. Try to put aside a small amount of money every month into a savings account which can grow with interest payments. This way, the more you save up, the quicker the pot will grow. This can be challenging especially when you have other outgoings to worry about such as rent, bills, and living costs. It is possible, and people do it all the time!
Another way to get the money you need is to rely on the bank of mum and dad. Lots of younger people get financial help from their parents and families when saving up to buy a house. The deposit required to buy a house these days is around 20-30%, which for the average house is around £50-60,000. Some parents are able to free up the money by refinancing their own house to release equity or reach into their own savings. The benefit of borrowing the money from your family is that you are less likely to have strict repayment rules in place, and it can work out cheaper than borrowing from a bank or similar.
A third way to get your feet on that housing ladder is to use one of the government-backed schemes specially designed for first-time buyers. An example of this is the help to buy scheme, which is reserved just for first-timers. Here, you borrow up to 20% from the government in the form of an equity loan, take out a 75% mortgage and just have to put up a 5% deposit. This is by far the cheapest way of buying a new house, and it makes it much more affordable for people on lower incomes. The scheme can be used on newly built homes and lots of new build developers are part of the scheme. You can search online for help to buy new builds to find the right development for your tastes.
If you are not a first-time buyer, the chances are that you won’t need much financial support as you will likely have your own house to sell which goes towards the cost of the new home. Some new build developers offer incentives to help you move, including part exchange schemes where you can buy a larger house without needing to worry about the sale of your current property. This helps release the stress of selling and buying at the same time. They also offer to sell your home on your behalf or buy the home from you directly.
