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  • FIRST POST
    • will369
    • By will369 19th Jun 17, 3:46 PM
    • 482Posts
    • 92Thanks
    will369
    Saving for my 1st house
    • #1
    • 19th Jun 17, 3:46 PM
    Saving for my 1st house 19th Jun 17 at 3:46 PM
    Hi guys,

    I am looking to save for a house over the next 3 years. I am not sure how much I will be able to save. I am hoping to save £12,000 a year. So in 3 years I will have over £30,000.

    I donít know whether I will use the government help to buy scheme or just a straight forward deposit. I know £30,000 isnít a lot, but it is what it is. I may need to save for longer. But by then I may of come into some inheritance or won the lottery, you never know lol.

    I am 26 years old, and more than likely will be buying by myself.

    My question is, what bank and what type of savings account is best for me? I donít want to touch it. Any suggestions? Do I need a straight forward ISA account?
Page 1
    • armchaireconomist
    • By armchaireconomist 19th Jun 17, 3:58 PM
    • 127 Posts
    • 126 Thanks
    armchaireconomist
    • #2
    • 19th Jun 17, 3:58 PM
    • #2
    • 19th Jun 17, 3:58 PM
    Open a LISA... now...


    Government will top up contributions by 25%, so your £12,000 a year will be £15,000 plus interest
    • armchaireconomist
    • By armchaireconomist 19th Jun 17, 3:59 PM
    • 127 Posts
    • 126 Thanks
    armchaireconomist
    • #3
    • 19th Jun 17, 3:59 PM
    • #3
    • 19th Jun 17, 3:59 PM
    P.S. How on earth isn't £30,000 "a lot"? Where do you live?


    That's more than half my mortgage...
    • eskbanker
    • By eskbanker 19th Jun 17, 4:00 PM
    • 4,770 Posts
    • 4,509 Thanks
    eskbanker
    • #4
    • 19th Jun 17, 4:00 PM
    • #4
    • 19th Jun 17, 4:00 PM
    Open a LISA... now...


    Government will top up contributions by 25%, so your £12,000 a year will be £15,000 plus interest
    Originally posted by armchaireconomist
    ....but since the contribution limit is £4K per year you can't get more than £1K government bonus per year.
    • will369
    • By will369 19th Jun 17, 4:03 PM
    • 482 Posts
    • 92 Thanks
    will369
    • #5
    • 19th Jun 17, 4:03 PM
    • #5
    • 19th Jun 17, 4:03 PM
    Open a LISA... now...


    Government will top up contributions by 25%, so your £12,000 a year will be £15,000 plus interest
    Originally posted by armchaireconomist

    How can I open one of these?

    I live in Exeter, Devon.

    I am looking to buy a 3 bedroom house. A new build.

    Not sure if 30k is enough?
    • armchaireconomist
    • By armchaireconomist 19th Jun 17, 4:09 PM
    • 127 Posts
    • 126 Thanks
    armchaireconomist
    • #6
    • 19th Jun 17, 4:09 PM
    • #6
    • 19th Jun 17, 4:09 PM
    My bad! Thanks "eskbanker". £4k a year into LISA and stick the rest in a fixed savings account.
    • badger09
    • By badger09 19th Jun 17, 4:16 PM
    • 4,978 Posts
    • 4,176 Thanks
    badger09
    • #7
    • 19th Jun 17, 4:16 PM
    • #7
    • 19th Jun 17, 4:16 PM
    My bad! Thanks "eskbanker". £4k a year into LISA and stick the rest in a fixed savings account.
    Originally posted by armchaireconomist
    Not a good idea.

    will369

    have a read:

    http://www.moneysavingexpert.com/savings/which-saving-account

    and come back with any questions
    • armchaireconomist
    • By armchaireconomist 19th Jun 17, 4:40 PM
    • 127 Posts
    • 126 Thanks
    armchaireconomist
    • #8
    • 19th Jun 17, 4:40 PM
    • #8
    • 19th Jun 17, 4:40 PM
    "Saving for my 1st house"


    "I am looking to buy a 3 bedroom house. A new build."


    Why not look at something older? Yes, it'll be all shiny and new but also often inferior quality, without character and price-wise often more expensive & volatile.
    • luke623
    • By luke623 19th Jun 17, 7:47 PM
    • 17 Posts
    • 5 Thanks
    luke623
    • #9
    • 19th Jun 17, 7:47 PM
    • #9
    • 19th Jun 17, 7:47 PM
    I personally have a stocks and shares LISA. I am on target to putting in £4000 a year, i will get my 25% at the start of the next tax year and hopefully an extra boost on the shares side of it. But my thoughts were, even if the stock does reduce i will have that 25% bonus to act as a buffer.

    If you think that stocks and shares are too risky there is a cash LISA available which offers a 0.5% interest rate + your 25% government bonus on your deposits.

    So it is worth it for the extra boost for buying a house. You would have to check when buying a house if you could put down your LISA savings + your extra savings (as you intend to save more than the £4000 limit) into one big deposit. I would think this would be allowed but its always good practice to extra check. Perhaps sending one of the LISA providers an email would get you a sure answer.

    But to answer your question. I would definitely open a LISA for buying a first home.

    Hope this helps!
    • chockydavid1983
    • By chockydavid1983 19th Jun 17, 11:25 PM
    • 390 Posts
    • 221 Thanks
    chockydavid1983
    For short term saving for house deposit, I would stick to a cash LISA. You get the 25% bonus with a cash or S&S version so seeing it as a buffer to cover stock losses shouldn't be a consideration.

    Chris.
    • steampowered
    • By steampowered 20th Jun 17, 11:28 AM
    • 1,390 Posts
    • 1,377 Thanks
    steampowered
    P.S. How on earth isn't £30,000 "a lot"? Where do you live?

    That's more than half my mortgage...
    Originally posted by armchaireconomist
    It depends where you are in the country. The average deposit of a first time buyer in London is more than 90k.

    National average is 32k.
    • steampowered
    • By steampowered 20th Jun 17, 11:31 AM
    • 1,390 Posts
    • 1,377 Thanks
    steampowered
    How can I open one of these?

    I live in Exeter, Devon.

    I am looking to buy a 3 bedroom house. A new build.

    Not sure if 30k is enough?
    Originally posted by will369
    It depends on your salary.

    The average price of a house in Devon is £247,080 apparently.

    £30k is a sufficient deposit. But if you are earning say £30k a year you could only borrow about £135,000 as a mortgage.

    In which case a 3-bed new build might be a bit of a stretch.
    • Azzzaa
    • By Azzzaa 20th Jun 17, 5:33 PM
    • 340 Posts
    • 2,171 Thanks
    Azzzaa
    Right, I'm in the same boat as you, i'm 23, £15k in savings, I have a standard HTB through Santander with currently £1k in it. I have around £6k in assets to sell.

    My advice would be start by writing down all your incomes and outgoings, working out how much you can realistically save, for your target you'll be looking to save £1k a month, is this realistic without 'investing/saving in high interest accounts, because you really wont get much from stocks/shares/any decent interest account in 3 years.

    Do you have any current savings/assets?

    I'm a visual person, I have my online banking app and sheets of paper everywhere with targets etc wrote down, it's like a vision board!

    If you don't already i'd start with a standard HTB account with a high street bank, play it safe, you can only deposit £200 a month but if you start now you'll have £7.4K plus an additional £1.8k bonus plus interest (which isn't much, i think mine is only 1%. ( the way to look at the 1.8K is to tell yourself to use 1.8k from your regular savings account when you go to buy for fees) so the bonus tops that goal back up to the 30k mark.

    I don't know your financial situation but is saving £1k a month realistically achievable EACH month for the next 3 years? As i put away £860 per month after giving myself only £200 a month to live on (living with rents) thats after all mandatory bills/DD and rent to rents.
    Last edited by Azzzaa; 20-06-2017 at 5:35 PM.
    • luke623
    • By luke623 20th Jun 17, 6:12 PM
    • 17 Posts
    • 5 Thanks
    luke623
    Right, I'm in the same boat as you, i'm 23, £15k in savings, I have a standard HTB through Santander with currently £1k in it. I have around £6k in assets to sell.

    My advice would be start by writing down all your incomes and outgoings, working out how much you can realistically save, for your target you'll be looking to save £1k a month, is this realistic without 'investing/saving in high interest accounts, because you really wont get much from stocks/shares/any decent interest account in 3 years.

    Do you have any current savings/assets?

    I'm a visual person, I have my online banking app and sheets of paper everywhere with targets etc wrote down, it's like a vision board!

    If you don't already i'd start with a standard HTB account with a high street bank, play it safe, you can only deposit £200 a month but if you start now you'll have £7.4K plus an additional £1.8k bonus plus interest (which isn't much, i think mine is only 1%. ( the way to look at the 1.8K is to tell yourself to use 1.8k from your regular savings account when you go to buy for fees) so the bonus tops that goal back up to the 30k mark.

    I don't know your financial situation but is saving £1k a month realistically achievable EACH month for the next 3 years? As i put away £860 per month after giving myself only £200 a month to live on (living with rents) thats after all mandatory bills/DD and rent to rents.
    Originally posted by Azzzaa
    I believe it would make more financial sense to open a LISA. The Skipton building society has recently opened a cash LISA with 0.5% interest rate. Although this is less than the interest rates on Help to buy ISAs, you can get more money from the bonus as you can deposit more in to a LISA.

    In the circumstances of the original poster.

    LISA:
    deposit £4000 a year. this would equal £12000 + £3000 bonus + interest.
    = £15000 + interest over 3 years

    Help to buy:
    deposit £3400 (This is allowed in first year of help to buy ISA) in first year then £2400 a year for the next 2 years after would equal £8200 + £2050 bonus + interest
    = £10250 + interest over 3 years.
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