December 17th, 2019
From £200 per month, to your First House: How to Save for your First Home
Buying your first home is probably harder than it’s ever been before.
In-order to buy your first property, you must be working harder and saving smarter.
We can’t help you with working harder, but we can with saving smarter!
Christmas will soon be behind us and a new tax year will follow not long after – that is the perfect opportunity to start your savings journey.
Start by looking back at your recent bank statements for expenditure you can cut down on or eradicate. Then as soon as you get paid each month, save some of your wages immediately into an Individual Savings Account (ISA) or other savings account and if possible don’t give yourself internet access to make it harder to get hold of the money.
A Lifetime ISA and the associated tax relief is an ideal way to save for your first home and the sooner you get started the better.
A monthly saving of just £200 into a lifetime ISA would yield a balance of £3000 at the end of the same tax year – £2400 of contributions with a 25% government bonus.
From just two years of saving you could have enough deposit for a £60,000 1 bed flat in the Midlands.
A 10% deposit and a £54,000 mortgage over 30 years could yield payments as low as £188 per month (based on rates available at today’s date); which is significantly cheaper than the likely £450 per month rent for the same property.
Of course, it’s far easier said than done. But with a plan, you will be far more likely to succeed.
You could, of course, opt for the alternative route of the Help to Buy Loan, available on a new build property with just a 5% deposit from you and 20% from the government (interest-free for 5 years).
For further information, please click here to request a call back from one of our advisers.
Written by Daniel Morris – Financial Planning Consultant at Prosser Knowles Associates Limited.