Want to buy a house? You aren’t alone. There are millions of millennials around the world who want to step onto the property ladder. Unfortunately, it’s not as simple as it once used to be. However, there are things that can be done to help you.
The government created the help to buy scheme in 2013 to help young people to be able to buy their first-time property on less savings, this scheme is due to end in March 2023, but there are also other options available to help you if this scheme isn’t quite for you.
If you have opened a help to buy, a specialist help to buy conveyancing solicitor will be able to support you during the purchase of your first home, ensuring everything runs smoothly, and so there are no delays.
What Is the Average Price of Property in the UK?
30 years ago, the UK suffered from one of the biggest recessions since the World War II recession in 1945. In 1993 the average price of a property was £51,210. In 2022, the average price of property stands at a shocking £276,755. The problem with these two average differences is the lack of increase in the average salary.
How Can Millennials Save For a House In 2022?
Open a Help To Buy: Equity Loan
While you are still able to before the deadline, it could be wise to open a help to buy: equity loan where you only need a 5% deposit. You will have full ownership over the property, but the Government will have up to a 20% equity share, or up to 40% in London.
It is also possible to open a Lifetime ISA (LISA), which is where you contribute up to £4,000 a year, and the Government will contribute 25%.
Set A Strict Budget
Many people don’t think budgeting works, but if you set a realistic monthly budget and stick to it, it’s surprising what you can save. Start by listing all your bills, such as rent, gas and electric, water, council tax, TV licence, broadband and any other bills you pay so that you can see exactly what comes out each month. From there can see what can be cut back on and what can be saved.
Some people recommend working on a 50/30/20 budget rule. So, 50% of your monthly income after tax will be spent on your bills, 30% will be spent on what you want, such as purchasing gadgets, going out for food and shopping for clothes, and the remaining 20% should be put into your savings.
The median average salary for those who work full-time roles in the UK is £31,285 and £24,706 after tax and national insurance deduction. This means if you were to follow the 50/30/20 budget rule each month, 50% would be £1,029 on bills, 30% would be £617, to spend on what you want and 20% is £411 that can be put into your savings. You may be able to save more or less depending on your personal circumstances.
Set Up a Savings Account for a Fixed Term
Some people struggle to save money because they have easy access to it. If you are one of those people that suffer from restraining yourself from spending money, a fixed term saving account can be really helpful.
You can set up the account so that the money is deducted automatically from your account by standing order. You can set it so that it takes the money from your account on payday. This is helpful as you won’t notice the money is missing because it’s gone before you can take it in as part of your monthly income.
Stop Unnecessary Spending
Truthfully there is likely a number of items or subscriptions that you pay for each month, but you could most likely go without.
We recognise things like the streaming platform Netflix is often spoken about as something that people should stop using if they want to save for a property. However, if it’s your enjoyment and you use it on a regular basis, you shouldn’t have to feel like you can’t have it, especially when it saves you from spending money elsewhere on entertainment.
You could instead watch Netflix instead of live TV, then you won’t require a TV license which is £159 a year.
When we refer to unnecessary spending, we’re referring to something like purchasing coffee out every day or multiple times a day. A study into what the average coffee drinker Brit spends a year on coffee came to a whopping £2,210. If you cut your coffee intake down to once a week and instead purchase coffee to make at home, you could save a significant amount of money which you could put away into your housing fund.
Saving For a Property Doesn’t Have to Be Impossible…
You may feel as if you are never going to be able to purchase your own property, but we promise you it isn’t possible if you follow these saving tips.
We understand that everyone has different circumstances, especially if you live and pay bills by yourself or you have children, earn a lower salary, owe debt, etc. There are things you can do to save money, even if it’s only a small amount each month.
What are your saving tips that have helped you to put money back each month to purchase a property?
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