Saving for a deposit on house

SuperBOB said:
Aim small and overpay the mortgage. Your first home won't be your last - no need to stretch.

Good luck :D
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Second probably won't be either ;) Wish I'd realised this when I started on the property ladder, I should have been overpaying that mortgage instead of going out so much!
 
Haha, loving the advice!

I did think about living in Central Reading for my job, but that is just silly as 40 miles south east, property prices drop drastically! Hence the South Hampshire location.

I have re jigged my forecast to allow me for saving £850 a month. I don't like throwing large sums of money somewhere out of reach, never have haha. But it's time to get on with it and start saving, next month! Scarey!

Ok, so, I should have just over £30k if I stick to my minimum, and one would assume that my yearly bonuses and spare cash would increase that by £5k over 3 years.

So, not bad for a first deposit no?
 
OP I am just turned 30 and I just bought my first property. I came back from Australia and lived with my parents for 4 years to save up the deposit, reckon it was worth it.

For me their seemed to be a massive difference in rates from >25% deposit so thats what I aimed for (better still 40% but I had no chance of that).

It took me so long to find a place once I had started looking that I upped my budget due to saving more and have ended up with 12K still in savings after I have paid for deposit, legal fees, stamp duty etc.

I found saving pretty addictive actually once I had got started and when I was getting closer to my goal I was saving more and more each month. I started a new online savings account at 2.5% (so not that great) which I named 'House Fund' and transferred stuff into that. Couldn't be doing with the hassle if ISAs that drop their rates to 0.01% after a year and such like.
 
To be honest if you REALLY want a house I would save absolutely everything you can. If the £300 you mentioned are on 'luxuries' then I would cut that down and ensure you save at least £1k a month.

Any money left over just put in a 'luxuries' savings account so if you want to save up for an upgrade or something for one of your hobbies, you can spend money you've saved rather than the money you put aside for your house.

One tip that works really well for a lot of my friends is when saving put it in an account that isn't easy to access, e.g. ISA, annual interest rate savings account but with no internet access (it can be too tempting to transfer money over for some!) Out of sight, out of mind.
 
boxman2000 said:
To be honest if you REALLY want a house I would save absolutely everything you can. If the £300 you mentioned are on 'luxuries' then I would cut that down and ensure you save at least £1k a month.
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It's all well and good saying that but it takes serious dedication to put every penny you have into savings. I am fairly dedicated to saving a deposit and put half my wages into it. 1/4 of my wages are then spent on surviving and the other 1/4 spent on enjoying my life. I typically over save in the winter and under save over summer.

OP, get some online mortgage quotes (MSE/Nationwide) and also make a spreadsheet of your income (minus bonus) and subtract every expense (car tax per month, petrol etc) and cost of running a house (gas, electricity, insurances, everything) to get an idea of how much you can afford on a mortgage per month, remember you need a buffer for other expenses that you may encounter in a month)
 
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Myself and the GF started saving. When we started we only had to save 10%. That soon changed. I wont lie i dont earn a lot and my parents; where i lived at the time didnt work with ill health so the government being awesome made me pay the bills because i was an 'independent'. So our savings went from £400.00 a month to £50.00. Then they wanted 17%. Which was un-achievable.

Now were renting because it was crippling me, turned out our local council thought petrol money to get to work wasnt a valid overhead.

Were still saving now but it will be a good 3 years before we move into our very 'own' home. If it dosnt work i think im going to try the 1st time buyer scheme that Barratts offer? there you only own 90% of your home.

Good luck though in saving.
 
Trifid said:
It's all well and good saying that but it takes serious dedication to put every penny you have into savings. I am fairly dedicated to saving a deposit and put half my wages into it. 1/4 of my wages are then spent on surviving and the other 1/4 spent on enjoying my life. I typically over save in the winter and under save over summer.
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I see you edited your post after I quoted - I agree entirely with your second paragraph and that is my point - if you have £1,300 left over each month I would without doubt save at least £1k as with mortgage repayments and all the overheads that owning your own property entails (insurance, additional travel costs, furnishing/kitting out, fuel, electric, water, rates etc).

Too many people walk into property ownership with their eyes half open - we did and it was a real shock at first.
 
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Good thread so far and finding it useful!
Only 20 myself but starting to get into what I would class as "reasonable" money so will start saving as much as I can to put towards a house several years down the line.
Only issue I'm having is the want / need for a newer car and that could hamper any savings for a while... That and the possibility of a job change that means I wouldn't be able to save anything for two years...
 
When me and the girlfriend saved for a house for a year and a half we literally did nothing but save!

If you are serious about it, will it really hurt to cut hobbies for a year? Yeah it is tough but well worth it in the end.

We literally lived off £50 a week each, and this was to include fuel costs and at the time I was driving a Mondeo ST24 so fuel was anywhere from £10 - £30 per week!

I managed to pay off £10k worth of debt and get £20k in the bank for the house deposit.

When purchasing a house don't just thing it stops with the deposit. You need to budget for the fees, solicitors etc which can add up! Then there is furnishing the house when you move in!

Yes it is hard...it really annoys me when I see people on TV say they are struggling to get a deposit together, it isn't your god given right to have a mortgage. If you add up what you spend on hobbies, drink, smokes etc it soon adds up! Cut these for a year and you will be suprised how quick the deposit comes available!

If you want to keep current lifestyle as it is just rent.

I say it again...it is deffo worth the hard slog! Nothing better sat in the back garden, beer in hand and looking back at the house knowing you have your name on the deeds!!
 
If I were you, first I would max out my ISA allowance for the year. Then set up a monthly saver account which has a monthly payment in of £500. Then set up another savings account to put in any amount over the £500 each month. Make sure you can make at least some withdrawals from this account in case you need some cash.
 
Nationwide has a mortgage deposit savings product you may be interested in, save into that and you can get a 95% mortgage from them at reasonable rates.
 
I bought with a friend - upsides and downsides.

We bought a 3 bedroom place in Zone 2 in London, based on the following:

- His mother gave him his 12.5% of the desosit (and a fair bit more)
- We essentially used my earnings to secure the mortgage offer
- We managed to put together a 25% deposit

Our situation is based on an interest-only mortgage, whilst letting one of the rooms out. Financially it's a great deal for us. Prices for properties in the development are flat/have risen slightly, and our outgoings per month are very decent when compared to renting in the area.

There are obviously pitfalls, but as far as my experience tells me, the main downside at present is if one of us wants to sell but the other doesn't. I sincerely doubt this being a potential issue though.

My advice would be try to go for a 25% deposit if you can, and if you're in need of extra monies, renting out a bedroom provides relevant cash!
 
I would account for every penny you spend. Just tot it up its not hard, each month you will then see what you have spent, what you took in, how much you saved etc
Thats the cashflow angle.

As far as the physical cash situation you only need £x available realistically, you should be able to set £x yourself. The £x you want easy to get hold of, so in say the Online Santander 3% interest no limitations account. This is to cover your normal bills plus a bit for emergency.
The rest you should then put into an ISA and the best interest account you can get. ISA can be whereever you find a good rate 3.35% was available but I forget who it was. Online savings post office or Coventry both offering 3.16/3.15%. Actually I think the post office may have been no limitations as well. There are slightly better rates available for lock ins, they are pretty slight though so I wouldn't personally lock anything away.

And don't forget the golden rule, diarise to switch accounts when the limited time initial bonuses will fall off.
 
The deposit % isn't really something you should aim at, its more a lender thing.

You should be aiming to borrow as little as possible.

With curret flat housing prices saving hard is a good thing, when housig prices start to go up (which could be years and years away we don't know) then you may want to get onto the ladder asap even with a bad deposit.

Why?
Well lets say you buy that £250k house, even 2% house price inflation will be £5000 in one year, thats quite some amount you would have to save that year just to buy the same house a year later.
 
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