What can I do to help buy my first home ?

Debtfreewannabee91 · 12 November 2018 at 7:40PM

So i'm 27 and have been trying to get on the property ladder for what seems like forever with no avail, i've saved money from working while now and have got £35000 for a deposit however it's nowhere near enough. I would be looking to buy a 2 bed semi-detached and they usually go for anything around £170-200k in the area I would need to be in for my current job.

Based on my salary I would get around £100k mortgage, meaning I would need to save at least another £35k and even then that would be on the lower end without money I would need for furninshings and everything to go in to moving....

Ive looked in to the help to buy scheme, which in all honesty is not a help at all in the long run. Is there anything else I can do other than just keep saving or try to get a better paying job (not really that easy) ? Or should I start to forget about owning my own place and look to rent ? And spend the money on something else, feels like i've already missed out on lots of things in the past because I would rather save money and it doesn't seem to of got me anywhere thus far....

ACG · 12 November 2018 at 7:53PM

I have shared this story a few times on here.

The first home I bought was about 5 miles down the road from where I wanted to live. It was owned by a 92 year old man and had not been touch for decades. I found a newspaper in a draw from the 70s! It needed gutting and renovating.

The house itself cost me £84k. I spent £10-15k doing it up. When I bought it, if it had been in better condition it would have been worth around £125k. So £25k profit in it. As I spent time doing it up, by the time I had done it all 3-4 years later, we ended up selling it for £155k... £55k profit.

So £55k profit, in addition to my original deposit and what I had managed to pay the mortgage down to in 4 years, it gave me a massive deposit for a house in an area I wanted to live but could not afford to buy with a normal saved deposit.

Sometimes you have to look at the bigger picture. Even if it takes you a few years to get there.

There is no magic solution. It is going to be one or more of the below:
Saving harder,
HTB,
Buying a doer upper,
Buying out of the area and having a cheaper mortgage than rent would cost.

Oxon · 12 November 2018 at 8:02PM

I’m sorry, it sounds tough. Do you need to buy a 2 bed semi at this stage? Could you make do with a smaller property for a while or look at a different area or shared ownership?

You could wait until after Brexit to see if that affects house prices, but who knows!

Sibz · 12 November 2018 at 8:08PM

What about a Help To Buy ISA?
It means taking time but its 25% return on your savings that you can put into it... I can't remember what the max limit is for deposits per month but if you can put in the max amount (which with what you've already saved you could) - its a swift and sizeable boost to the coffers for a deposit.

Jigglebiz · 13 November 2018 at 11:38AM

Most people I know (myself included) buy a 1/2 bed flat first, often in an undesirable area but with potential. If property prices rise (not a given) then in 4-5 years you may be able to buy your semi.
I would consider it very unusual these days for your first property purchase to be a house.

Cakeguts · 13 November 2018 at 12:43PM

I bought a 2 bed semi in a North West town by having two jobs and buying in a not very good location. Money was extremely tight. I had to have a car for my job but I had a really old one that had belonged to my father, the cheapest sale television which was actually a black and white in the 80s one new carpet and bed and all the rest came from auctions or my parents house that they didn't want any more. I even had 2nd hand carpet from auctions because it was a new house. I couldn't afford meals out or holidays all the time I lived there.

So in order to save to buy a house.

No expensive phone contracts get a sim only or a cheap phone from a supermarket. Mine costs £7.50 per month.

No car finance buy a cheap old car like I did and I needed mine for my job. I can remember getting up early for my job in order to leave time to get the engine to start.

No meals out ever.

No takeaways.
No holidays.

Do your own cooking do not buy ready meals because they are expensive.

If you want a 2 bed house you have to do some real saving. Getting the deposit saved is the practice needed for the kind of saving that you need to continue to do when you are a home owner. Owning a home means having enough savings to pay the mortgage if you lose your job.

ReadingTim · 13 November 2018 at 3:20PM

Suggest some of the following:

Earn more money
Spend less money
Buy with someone else
Inheritance
Lottery win
Manage expectations

george4064 · 13 November 2018 at 4:20PM

In addition to the suggested ideas above, I would strongly recommend signing up to a thread like the 'Save 12k in 2018' thread: https://forums.moneysavingexpert.com/discussion/5755819/the-save-12k-in-2018-thread

Rosemary7391 · 13 November 2018 at 4:28PM

I wouldn't worry about not having money for furnishings when you move in. A couple hundred will get you the very basics from eg BHF and you can add to it as the months go by since you'll no longer be saving frantically for a deposit.

xylophone · 13 November 2018 at 4:34PM

What can you afford now? A terraced house? A flat?

If you want to own now then you lower your expectations?

Exodi · 13 November 2018 at 5:05PM

I think it's more a case of managing expectations. Presumably you're on around 22k gross per annum and sadly in todays market you just cannot expect to buy a 2 bed semi as your first house. I'd expect someone on twice your income to (barely) afford that. The property market is tough, it really is, full sympathies to you as I'm currently going through the same thing.