is it possible to save to buy a house ?

ard123en

hi folks

this is a question we were asking the other day

thought id ask the good people on here

ther area i live has high house prices in compared to wages like everywhere else

the standard ftb house is around 140k but has held steady for the lst few months

shopping around that would make the repayments about 700 a month way to high for me when combined with all the other expence of owning a home insurance / gas /living

if house prices were to become stable for the next few years say 5 would there be a way of investing the 700 per month to gain a massive deposit ?

Thefunkygibbons

The best way to do this is save as much as you can as a standing order before you get your hands on the money.

£700 a month would grow to over £40k over 5 years so very tidy.

Obviously, you should put £3k a year into a cash mini isa

Then use the best buy tables to find the best rates for the rest

Woby_Tide

I'm assuming you live rent free currently or you will have to take your existing living costs out of the £700

meanmachine_2

Provided house prices grow at a slower rate than wage inflation or even *slobber* start to fall in nominal terms, then it is possible to have a 10-15 year plan so that you can buy a house outright at the end of it.

That's fine if you're living rent free in the meantime.

If house price growth matches wage growth you'll save around half your mortgage.

If house prices fall, you'll save exponentially more.

You'll also be able to stick two fingers up at the lenders. That's got to be worth something.

ard123en

live very cheap at the mo

just started a 3 year save as you earn 250p/m could have another 2 inthe 5 year plan if can

a continue to live cheap

b not feel the need to jump on ladder early

plus maxed isa

zag2me

I spent 3 years saving my house deposit while watching house prices rocket at twice the rate I was saving. Be very carefull there isnt another boom(unlikely in this cycle), but also be watchfull for a crash. Either way, buy your home when you feel comfortable with the repayments.

Thefunkygibbons

ard123en wrote:

live very cheap at the mo

just started a 3 year save as you earn 250p/m could have another 2 inthe 5 year plan if can

a continue to live cheap

b not feel the need to jump on ladder early

plus maxed isa

£250 pm is the maximum allowed across all your SAYE so you are maxed out on that already

It is a great way to save as the money is taken before you even see it

Other than keeping a real close eye on the property market, sounds like you are doing the right things

The only other advice I would add, is that if you have the time, whilst waiting, could you learn a skill that you could use when you do buy your house like plumbing, tiling, kitchen fitting etc?

ard123en

so i cant start another saye next year ?

Thefunkygibbons

Nope

The maximum monthly deduction is £250 per month

I think it has been some time since that limit was increased

However, hopefully the underlying shares also increase so that after 3 years, you have some gain on top of the amount you put in