Our 10 top tips to help first time buyers get onto the property ladder
Saving a deposit for your first home can seem like an impossible mission, but getting onto the property ladder is super easy with Gleeson and you probably don’t need as big of a deposit as you might think.
If you’re a first time buyer, you can benefit from the Government’s Help to Buy: Equity Loan scheme which allows you to buy your home with only a 5% deposit, which could be only £5,000. In simple terms, the Government provides an equity loan of up to 20% that you can put towards your new Gleeson home. With your 5% deposit, you’ll then have a 75% mortgage, with lower monthly repayments. The loan you’ll get from the Government is interest free for the first five years, but in year six you will start to pay interest on it.
So, when saving for your 5% deposit, if you’re starting from scratch, be realistic about how much money you can afford to put away each month from what you earn. Regular saving is more effective than relying on irregular one-off sums, so planning to put aside a set amount into a savings account every month is a good idea. The earlier you start to save and the more you put aside obviously the quicker you’ll become a homeowner. The key is to save at a pace that suits you.
From simple changes such as cutting back on takeaways, to setting up a standing order, here’s our ten top tips on how to save for your deposit…
Tip one - Be clear with how much you are needing to save
Having a target to aim towards will help when saving for your deposit. Take a look at our beautiful developments to see which homes are in your price range. If you fancy a 3 bedroom home, you’ll obviously need to save more than if you’re after a 2 bedroom home, so be sure to take a look at the prices of the homes at your chosen development and work out what 5% of the total price would be.
Tip two - Set up a standing order for your payday
A super simple way to save money is by setting up a standing order to go straight into your savings account as soon as you get paid. This way you don’t need to think about putting the money aside manually by transferring it between accounts and you won’t forget to either! Automatically putting the money for your deposit into a savings account as soon as you get paid will make it much less likely for you to overspend each month and will make sure you stay on track with how much you want to save after each pay day.
Tip three - Make smart lifestyle changes
There’s so many easy, yet effective lifestyle changes you can make to help you save money. Swaps as simple as purchasing a reusable coffee mug and making your own brew rather than buying a Costa every day can save you around £550* per year! Another lifestyle change you can easily make is running and doing home workout videos from YouTube rather than paying for a gym membership saving you around £250**.
Tip four - Take advantage of Government saving schemes
As well as the Help to Buy: Equity Loan which you can use when buying your home, the Government has a scheme to help you save too. Lifetime ISAs (also known as LISAs) are a type of ISA created to help people save for their first home. Read more about Lifetime ISA’s here.
Tip five - Declutter and sell stuff you no longer use
Looking to pop some extra cash into your savings account? Take a look through your wardrobe and be ruthless with any pieces of clothes you no longer wear. Facebook Marketplace, Depop or Gumtree are quick and easy platforms to sell your unwanted stuff, also it will be less to move into your new home… it’s a win, win!
Tip six - Swap to own brands
Get into the habit of buying own brand products when doing your weekly shop! For example, Tesco Wheat Biscuits are £1.20 cheaper than Weetabix, the nations favourite Nutella can cost as much as £3 for a 400g whereas Lidl's own-brand version, costs only £1.09 for the same size!
When it comes to food shopping, instead of piling the trolley high in expensive supermarkets, try and buy only what you need from affordable shops like Aldi, B+M, and Lidl. Also, only buy what you need, we’re all guilty of adding a few extra things to our trollies, so write a list before you head to the shop and aim to stick to only buying what’s on it.
Tip seven - Talk to Mum and Dad or even grandparents
Receiving gifted money towards your deposit can be a great help however big or small the amount might be. Make sure you share your plans as early as possible to see if help from family could be an option to take into consideration!
Borrowing money from the bank of Mum and Dad could also be an option, if your parents are willing and able, borrowing some money to help with a deposit could help you buy your own home sooner than you would otherwise be able to. You could discuss with them paying it back over time, but try not to overstretch yourself with lending money from your parents as remember, you will have your mortgage to pay too when you move in.
Tip eight - Start a part-time job
Be on the lookout for weekend jobs and explore ways or earning extra cash from dog walking, or maybe a spot of babysitting or you could even see if your local pub or bar has any extra shifts you can pick up.
Tip nine - Miss a holiday or two
We’re all desperate for a holiday abroad, particularly at the moment, but two years without a holiday can save you a huge amount of money. Use the money you would have spent on flights to pop into your savings. Cutting down on luxuries such as holidays will be worth it when you have your own dream destination, a beautiful new home!
Although, holidays don’t have to be completely off the cards, instead of going abroad, staycations in the UK can be just as enjoyable and much cheaper.
Tip ten - Speak to an expert
Talk to a mortgage advisor early on as they could help build the right saving plan for you and when the times comes to it find the right mortgage plan too!
At Gleeson we work with new build mortgage specialists Meridian Mortgages who can make the process quicker due to their familiarity with our homes and the new build market place. Whether you decide to use them or not, having a mortgage advisor will be incredibly helpful for you, particularly if you’re a first time buyers, they will consider things such as mortgage terms, interest rates, and mortgage types.
We hope our deposit saving tips help you save efficiently. Remember, buying a home is much simpler than you might think and with the help of our sales executives and mortgage advisors you could own your own home for less than you might think.
To speak to a mortgage advisor about what you can borrow, you can use our simple mortgage calculator and upon your request an advisor will be in touch. We have over 70 developments across the North and the Midlands to choose from, so why not find your Gleeson home today? www.gleesonhomes.co.uk/find-your-home
*A coffee at £2.20/250 days a year
** Based on a £20 gym membership