A recent survey reported that single first-time buyers paid an average of £47,479 in deposits in 2019/20 in the year to March, according to the latest English Housing Survey.
That means that £50,000 is what you’ll need for your first deposit!
Consider that the average UK salary for full-time employees was £31,461 for the tax year ending 5 April 2020.
So you’d have to save 19 full months’ salary to save the deposit!!
If that feels like a pipe dream and so far away from where you are now, remember that everyone starts somewhere.
This compares with joint first-time buyers who handed over £43,395 in deposits, in annual research published by the Ministry of Housing, Communities and Local Government.
In London, an average of £136,798 was spent on deposits by new homeowners – but let’s not go there quite yet!
Let’s look at some different ways to raise your deposit…..
- Buy a lottery ticket… after all you’ve got to be in it to win it – I’m not supporting gambling and remember the odds are approximately 1 in 45,057,474, or the EuroMillions jackpot: 1 in 139,838,160!! So please don’t rely on this method!!
- Speak to the bank of mum and dad, position it as a financial planning exercise. Seek professional financial advice with a qualified broker – consider equity release, inheritance planning, and taxation management.
Other ideas, maybe not so popular…
- Move back with your parents – Rent is likely your biggest single expenditure. Eliminate it and you’ll be on the fast track to home ownership. You may find that it speeds up their decision to help out!!
- Sell your car and only use public transport, after rent car payments, insurance etc are usually the biggest outgoing.
- Stop going out.
- Don’t go on holiday – sorry.
- Get a second, part time job.
- If you can’t bear to move back with your folks, downsize your renting, rent a room and not your own place and rent somewhere no one else wants to live – think short term pain for longer term gain.
3 things to always remember
- Start saving early – it is never too early to start saving. Consider tax efficient savings.
- Keep your credit score in good shape. The better your credit score, the better the interest rates on any loans you apply for will be, which will save you money in the long run.
- Keep focused on the end game. So when you’re struggling with the short term pain always remember the longer term gain!
It’s always best to speak to a professionally qualified financial advisor and mortgage broker. You’re in luck as I am also a qualified Financial Coach – and I help people every single day with these types of challenges.
You can take a look at my Financial Coach website here https://www.rachelrowley.co.uk/
Here’s my mortgage website: https://www.fivevalleymortgages.com/
If you want to explore what it will take to raise your first deposit let’s chat…Call me on 07969 859749 or email firstname.lastname@example.org and let’s chat!