Saving for my 1st house

will369

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 don’t know whether I will use the government help to buy scheme or just a straight forward deposit. I know £30,000 isn’t 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 don’t want to touch it. Any suggestions? Do I need a straight forward ISA account?

armchaireconomist

Open a LISA... now...


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

armchaireconomist

P.S. How on earth isn't £30,000 "a lot"? Where do you live?


That's more than half my mortgage...

eskbanker

armchaireconomist wrote: »

Open a LISA... now...


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

....but since the contribution limit is £4K per year you can't get more than £1K government bonus per year.

will369

armchaireconomist wrote: »

Open a LISA... now...


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

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

My bad! Thanks "eskbanker". £4k a year into LISA and stick the rest in a fixed savings account.

badger09

armchaireconomist wrote: »

My bad! Thanks "eskbanker". £4k a year into LISA and stick the rest in a fixed savings account.

Not a good idea.

will369

have a read:

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

and come back with any questions

armchaireconomist

"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.

Redalligator

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

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

armchaireconomist wrote: »

P.S. How on earth isn't £30,000 "a lot"? Where do you live?

That's more than half my mortgage...

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.