Navigating the property market can be a daunting task, particularly if you’re trying to get on the ladder to buy a house for the first time. With demand for housing at an unprecedented high, it is important to be proactive when it comes to ensuring everything is in place to help you secure that all-important mortgage.
With this in mind, we’ve decided to put together 7 ways to fast-track your way towards owning your first home. By following these money-saving tips for buying a house quickly, you will be well on your way to becoming a first-time buyer in no time!
1) Set your goals
First and foremost, it is important to have a clear and defined goal. Be realistic about the sort of property you can expect to afford, and remember that you will need to save somewhere between 10% to 20% of the overall property purchase price to lay down as a deposit. If you’ve been wondering “how much money should I save before buying a house?” then it’s worth considering that last year, the average first-time buyer deposit in the UK sat at around £53,935, which should give you an indication as to how much you should be putting away. In addition to putting a home deposit down on a property, you’ll also have to factor in things like stamp duty and conveyancing/surveyor fees, so remember to budget accordingly for these as well.
2) Start budgeting
One of the best tips to save for a home deposit is to gain some financial discipline. If you’ve been thinking about how to buy a house at a young age but are struggling to put away savings for the future, it may be time to draw up a budget. You can do this by creating a spreadsheet or using a dedicated budgeting app.
Don’t be afraid to scrutinise your incomings and outgoings in detail. It can be useful to categorise your outgoings, into essential and non-essential, for example. Rent, bills and car finance payments are the sort of things you can’t avoid, and would sit firmly at home in the “essential category”. For other things like subscriptions to streaming services, takeaway coffees and nights out, you might spot ways in which you can curb your spending to save a little more toward your first property.
Arguably the best way to save money to buy a house is to try practising the 50:30:20 ratio rule. Put 50% of your incoming wages aside for needs (your fixed costs), 30% for the things you enjoy doing, and 20% into your savings pot toward your mortgage deposit. Of course, if you have debt to pay off, then be sure to allocate a portion of your pay and pay back any outstanding debts.
3) Get a side hustle
Finding a way to earn a little bit of extra cash outside of your nine-to-five can help to seriously boost the coffers when it comes to saving money for a mortgage deposit. So many people have got the potential to earn from hobbies without even realising it! If you’ve got a creative talent like crafting, drawing or painting, you might want to consider setting up an Etsy page or advertising your work on local social media groups.
Alternatively, you might want to branch out into freelancing. The gig economy is at an all-time high, with everything from writing to coding and data entry tasks available. Many of these freelance tasks can be performed from home, which is ideal for evenings after work or during a quiet weekend.
4) Be savvy about where you save
When saving, where you invest is crucial. It can be beneficial to do a bit of research on the different types of investments and savings accounts available (ISAs for example), and you’ll want to gain an understanding of passive income and compound interest.
The power of compounding is that it helps to grow your savings exponentially. By adding the profits earned on your investments/savings back to the principal amount and then reinvesting the entire sum again, you’ll essentially accelerate your profit-earning capability.
5) Take advantage of government schemes
If you’re wondering how to buy a house quickly, you should familiarise yourself with the current government schemes in place to encourage first-home ownership. Take the Lifetime ISA as an example. Lifetime Individual Savings Accounts can be used to purchase a first home, and can be opened by anybody between the ages of 18 and 40.
The beauty of the Lifetime ISA is that you will receive a government bonus of 25% of the total amount you pay in, up to a maximum of £1,000 per year. This can go a long way towards getting your first step on the property ladder.
6) Reduce your rental costs
Reducing your rental costs will help you to save quite rapidly. While some of these tips may sound less than ideal, it’s important to remember that your long-term goal is to save enough money to enable you to buy your own property. If you want to get on the property ladder as quickly as possible, this will mean making some small sacrifices along the way.
Consider downsizing, moving to a nearby area with lower rents, temporarily moving in with parents or finding a flatmate to help reduce rental costs. The less you pay in rent, the more you’ll be able to save, think short-term inconvenience for long-term gain.
7) Look for discounts
Small savings can really add up. Before making a purchase, don’t be afraid to shop around or even ask for a discount. Get in touch with retailers (either online or in-person) and ask if they have any discount codes. Alternatively, wait until the seasonal sales before making non-essential purchases, and take advantage of special offers as advertised by retailers.
The bottom line
By setting clear goals and building good money habits that will stick, you will get closer to your dream of buying a house. Picture a money bucket; take steps to increase the flow of money through savings/investments and side hustles and reduce the leakages through downsizing and discounts.
Whether you’re ready to start saving or have already been implementing these methods for some time, why not use our Home Affordability Snapshot to find out the types of properties available to you under your current circumstances and budget? This can help you to develop a realistic picture of what you can afford, and could also be useful in mapping out what you need to do to get on the property ladder in the near future.
DISCLAIMER: The content on our site is provided for general information purposes only and is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.