How to save up for that all-important house deposit

In this month's edition, we offer our advice on how best to save up for a house deposit.

We also look at news of an increase in both housing supply and demand, we analyse what buyers are prioritising when looking for a home and we investigate which places are top of the pile if you're looking to purchase your own holiday home. 

How to save up for that all-important house deposit

For most of us, the most expensive thing that we ever purchase will be a property, and the prospect of saving for that all-important deposit can be rather daunting. However, the key to saving for that lump sum is simply good financial preparation and making a few changes to your outgoings which should reap big rewards. Take a look through our handy hints and tips and you’ll be in that new home in no time.

Speak to an expert
If you have made the decision that you are ready to buy a property, then an excellent first point-of-call would be to speak to an expert, be that a financial planner, mortgage advisor or a savings expert in your bank. It is important to get a detailed overview of your personal finances and speaking to an industry expert will provide you with tailored advice which suits your lifestyle, as well as being given some proven strategies to help you to save. Whether you’re a saver or a spender, it is important to get into the right mindset to save and starting the process by speaking to an expert is a sensible first step.

Make a move
With the cost of renting often leaving many with little money to save for a deposit, making a temporary move can be a key factor in achieving a sufficient deposit. More and more people are moving back in with their parents for a period of 6 to 12 months; often paying no rent and economising through saving on laundry and food costs. If living with your parents is a truly unbearable prospect, then finding a lodger to live with you will also aid you in that all-important quest for a deposit.

Know your options
Did you know that you could buy a property with just a 5% deposit? Knowing what schemes and grants are out there will most certainly help you to achieve a house deposit. The Help-to-Buy shared equity scheme allows you to purchase a home with as little as 5% deposit and the government or developer (this is available for new homes only) lends you the rest of the deposit. Shared ownership schemes involve purchasing part of a property and then renting the rest, and although you would still need a deposit to get a mortgage for the part of the property you are buying, the deposit would be considerably lower; for example, to get a 90% mortgage on a 50% share of a &150,00 property, you would need only &7,500 for the deposit.

Make your savings work harder
Naturally, any changes you make will have one similar goal – to help you in saving more money more quickly and making these savings work for you should be a top priority. Open an ISA and use your yearly cash allowance so you don’t pay unnecessary tax; there is also a Help-to-Buy ISA from the government where for each &1 you save the government will give you 25p. If you don’t already have one, open a savings account and save what you can, even if you think the amounts you are saving are inconsequential, they will soon amount to a worthwhile value. Shop around and see which bank offers the best interest rate on your savings, don’t just take one out with your current banking provider as finding a good interest rate could go a big way to helping you reach your goal faster.

Saving for a deposit can seem like a tall order, so making some sound financial decisions will be the key into being approved for a mortgage and taking a step on to the property market. Get yourself into the right mindset where you are aware of why you are making some financial changes, remember that they are all short-term, and you’ll see those savings growing faster than you could have ever hoped.

Both housing supply and demand are on the rise

If you’re of the mindset that the property market is in the midst of a period of difficulty, then the latest figures from the National Association of Estate Agents (NAEA) will surely change your mind, with both the supply of housing and the demand for housing at increased levels proving the market’s current health.

The NAEA Propertymark’s latest figures have shown that the supply of available housing increased by 20% in December. The number of properties reached the highest level for December since 2014, with housing supply per branch increasing to 42 – an increase from 35 per branch in November. Simultaneously, the number of house hunters also increased by 8% in December, with overall demand up 13% year-on-year.

Mark Hayward, chief executive at NAEA Propertymark, said: “This month’s findings prove that despite the current political climate, people still want to move. There is movement in the market with demand from house hunters up 13% year-on-year, and the supply of available properties also rising. Although the number of sales agreed hit a 12-month low, this is something we always see in December, with Christmas festivities typically taking priority over any plans to buy or sell.

“While many are adopting a ‘wait and see’ strategy until there’s further clarity over what Brexit might mean for the market, there is choice for those who want to buy now, and there are people on the market looking for new homes.”

First-time buyer sales also showed an increase in December, with the number of properties sold to the group increasing to 24%. With first-time buyers integral to the health of the property market, rising statistics in terms of their buying potential is always a good indicator of the viability of the market.

As we move further into 2019, it is difficult to predict whether the health of the market will remain consistent in the face of political instability and the financial effects of this lack of consistency. On the other hand, there are other macroeconomic conditions which are favourable for the health of property across the country, such as historically low-interest rates and the relative ease to obtain mortgage credit. These conditions mean that more people than ever are in a position to take out a mortgage and purchase a property, with schemes also available to alleviate the trouble which some find in saving for a deposit, and this increased demand should shore up the market even after Brexit has (or indeed, hasn’t) taken place.

What are buyers prioritising when looking for a property?

Good schools, good commuter links and a good kitchen; traditionally, this is what has been considered to be the magic triad of priorities for buyers. However, new research has suggested that this is no longer the case. Read on to see what buyers are prioritising whilst on the hunt for a new property…

A poll from a regulated property buyer has shown that a budget supermarket has ousted the school catchment area for one of the top spots in buyer priorities, with almost 40% of those surveyed stating their desire to live within close proximity to an Aldi or Lidl. School catchment areas remain high on the wish list of buyers with 29% saying that they would move home in order to be in a specific catchment area.

The desire for good-value shopping could be linked to the need to economise after purchasing a new property, so it is no surprise that it is the younger generations who rate the budget supermarket highest; some 54% of 18 to 24-year olds want to live near to one. This figure gradually declines to 34% of over 45s sharing the same view.

The outright top spot on buyer priorities, however, is for a scenic view with 44% of people preferring a property with scenic surroundings. Budget supermarkets follow this in second place, and local bars and restaurants come in at third in the wish list of buyers.

“Everyone has their own priorities when moving to a new house, but it’s interesting to see how the overall patterns are changing. Budget supermarkets are definitely growing in popularity, especially among the younger generations, and their presence in a region is now making a place more desirable to live,” said Ross Counsell, director at Good Move.

Once a property move is completed, research also revealed what people first investigate once they have moved to a new area. Public transport links are the first item which people look into with 21% of people researching this immediately, followed by local schools, crime rates and broadband speeds.

Where are the best place to purchase a property abroad?

As the British winter truly sets in and the familiar battles around the thermostat reach peak levels, you would be forgiven for dreaming of warmer climates. Sandy beaches, shining sun and stunning seas sound like the perfect tonic to these cold winter months, don’t they? Read through our guide of the best places to buy property abroad - for investment purposes or for quality of life - and you could turn these dreams into a reality this year.

Looking for an investment?
If you’re looking to diversify your investments and pour some of your money into another country where price growth is in the midst of a boom, then look no further than Hong Kong. In the last 12 months, property prices have increased by 15.7% in Hong Kong, meaning that if you had made a &100,000 investment, you would have made &15,700 profit in just 12 months – certainly not to be sniffed at.

Closer to home, the archipelago of Malta, in the Mediterranean between Sicily and North Africa, is reaping similar property price growth to Hong Kong. With a 12-month increase of 15.7% in property prices, investing in this small island could reap you big rewards, but move quickly as in the last six months prices have been growing at a slightly slower rate.

Looking for a holiday home?
If you’re looking for a pied-à-terre in the sun, then these are some of the most popular, and most affordable destinations for Brits buying abroad.

If you’re looking for a new life in the sun, then Spain is the go-to destination for a multitude of reasons; the warmer climate, sandy beaches and ready availability of holiday homes to name just a few. The average property search by Brits looking to buy in sunny Spain centres around the popular locations of Torreviaja, Costa del Sol and the Costa Blanca, with the average search price at &117,131.

Just across the English Channel is our nearest neighbour France, and it remains a popular choice for overseas property purchases. The so-called “l’Hexagone” (the Hexagon) due to its roughly hexagonal shape, France is an entirely different proposition to that of Spain. With rolling countryside, mountain ranges and gastronomy renowned around the world, France offers a quality of life which is difficult to rival. In 2018, the average property search price in France was &137,741; however, in many parts of the country, you would need a lot less to purchase an appropriate holiday abode.

This certainly isn’t the cheapest option if you’re looking for an affordable apartment abroad, but its recent popularity means that it is worth considering. The typical property search price topped &220,000 last year, showing the ready appetite to spend in the country, but also reflecting a growing desire by Brits to take the plunge full-time and move to the country. With extremely agreeable temperatures throughout the year, a laid-back lifestyle and great tax benefits, Portugal could be the right choice for you.

If Europe is too close to home, then Florida mustn’t be ignored. With sunshine practically all year round and the advantage of no language barrier, it remains a firm favourite amongst families, as well as those aged 60+ who are drawn to the quality of life on offer. With some of the world’s best golf courses, theme parks, shopping malls and sporting facilities, it is practically impossible to be at a loss for activities in Florida. All of these amenities come at a cost, however, with the average property price search at &385,178 and the most popular areas being Davenport and Kissimmee.

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