Saving tips for first-time buyers
It is clear to see that the younger generation are becoming more and more conscious of their spending habits and begin to plan for their futures earlier, which often encompasses purchasing that first property.
There are many savvy saving techniques that prospective first-time buyers have taken advantage of to step onto the property ladder. For example, the ‘paying yourself first’ method is the smart new way to budget throughout the month after being paid, allowing lifestyles to come after saving so that the money pot can grow.
Recent findings from Post Office Money suggest that first-time buyers are typically taking 3.6 years t save for that first deposit, which is down over one month from 2018.
What’s driving this change?
The employment sector and modern attitude to work is very different to what is was ten years ago, with many new opportunities available and jobs that previously would not have been heard of. On top of that, a third of savers have an additional job to help in their journey, and a quarter of the first-time buyer group used the internet to their advantage to generate more income.
Speaking of which, the internet has allowed the option of having a side hustle and remote working as an everyday option, meaning that people are working harder and smarter to reach their goals. This phenomenon has taken over with more job opportunities using the internet as an integral tool offering flexibility and connectedness across the globe. The number of opportunities to make a fast buck is gigantic and ever growing, offering more opportunities for first-time buyers to save more money faster.
The Bank of Mum and Dad
As well as clever and sensible saving, there is still the ongoing support from parents and other family members giving considerable contributions towards house deposits to further fast track the process. A large proportion of first-time buyers have used the assistance of family to fast track their saving with 69% having the help of others to reach their totals. Many families are offer support to their loved ones to obtain a pre-Brexit housing steal so the generosity still growing.
High rates from lenders
Mortgage lenders are also more willing to lend at present offering desirable fixed term rates including low interest rates. If you haven’t yet opened a Help-to-Buy ISA, then unfortunately the deadline has passed as of 30th November, however you can still open a Lifetime ISA which offers comparable saving opportunities. The lifetime ISA (LISA) allows you to save up to £4,000 tax free each year and the government will add a 25% bonus on your savings up to a maximum of £1,000 per year. This presents a super opportunity for saving for those aged between 18 to 39, especially considering the fact that the normal 25% penalty which is payable when withdrawing your money is totally waved if you are using your savings to buy your first property.