In recent years raising a deposit for that first step on the property ladder is one of the biggest hurdles for young people in Britain. The rising costs of living make it more challenging to save the necessary amount to secure an advantageous mortgage for that first place to call home.
In this blog post, we look at some of the options first time home buyers have for raising the deposit for that first step up the property ladder.
How Much Deposit?
The first step is to figure out what a realistic figure would be. Look at available properties in your desired location and calculate the minimum deposit you would need for your first home to be. Sometimes we make compromises on that first home, but they are well worth it if they mean going up the property ladder.
The Bank of Mum & Dad
According to research, the Bank of Mum and Dad still finances a big portion of the total deposits – and not only for first-time buyers but for second-time buyers too. According to Legal & General, in 2016 buyer’s parents contributed to 256,400 of house purchases, with a further 22500 and 27000 supported by grandparents and other family members/ friends respectively; in total, family and friends spent an estimated £5 billion helping their loved ones get on to the property ladder.
The average first-time buyer in the UK puts down up to a 20% deposit, although the minimum required stands at 5% – which could, in some cases, equate to as much as £20,000 of savings required. That’s according to the Money Advice Service, which stresses the importance of a getting into a good savings routine when planning on purchasing a house for the first-time.
Set a monthly goal – experience says that without a set goal, keeping your focus can be hard. Think of an achievable goal and try to stick to it.
Search for the best savings account. Check the highstreet banks for the best available savings accounts for your goals and circumstances. Also worth a look, ISAs
Keep an eye on your savings. With interest rates and products constantly changing, make sure you keep an eye on catching the best product that works for you.
Even you are just starting building that deposit to achieve your goals, it is well worth having a chat with our friendly team of mortgage advisers; we can help with valuable advice that tailors on your needs and have already helped numerous first time home buyers achieve their dream of owning that first home.
The Mortgage Hub is an independent mortgage advisor serving the greater Glasgow area. Whether you are planning to buy your very first home and need the right first time buyer mortgage, or are looking to re-mortgage due to a house move or to growing family – we understand your journey is so much more than a financial process, it’s a journey to achieve your dreams, improve your lifestyle and achieve your true potential.