Getting on the property ladder is exciting – and expensive.
Experts from MoneyMagpie have shared their top tips to help first time buyers save for that all important deposit.
Founded by TV personality and money expert Jasmine Birtles (Homes Under the Hammer, GMB, This Morning, BBC News plus many more), MoneyMagpie has been helping millions of people make better financial decisions for over a decade.
Lifetime ISAs
If you haven’t opened a Lifetime ISA yet and you’re saving for a house, you’re missing out on free cash! You can save up to £4,000 a year and the Government tops up by 25%, so that’s £1,000 extra for free. The great news is that if you’re buying with a partner or friend who is also a first-time buyer, you can both open a LISA to take advantage of this extra cash.
There are some restrictions, so make sure you do your research before you start looking for properties. But even if you want to move this year, you could nab £1,000 free – not to be sniffed at!
Compare and Negotiate
When you’re considering an offer on a property, make sure you research the area first. Look for houses sold in the same street or next road across within the last twelve months. Use this information to gather a picture of whether the house is marketed at a reasonable price.
After you’ve had a survey on the property, use the report to negotiate your price. If the report suggests you might need a new damp course, for example, estimate the cost of that work. Get quotes from local tradespeople for a solid idea. Use this to haggle your offer down.
Don’t Use the Estate Agent Referrals
Estate agents will often insist that you use their mortgage broker or conveyancing solicitor. They might tell you that it’ll make your sale go through faster or that it is cheaper.
However, you aren’t obliged to use the in-house services and can often find them cheaper elsewhere. Estate agents might sound like they’re going to deliberately slow a sale if you don’t go in-house, but this isn’t in their interests so it’s just a sales tactic to earn more cash from your purchase. So, shop around for a good deal before you decide.
Consider a Lodger
An unusual way to save money by spending more, but hear us out. If you want to make the most of your first-time buyer Stamp Duty exemption (up to properties of £425,000), it could be worth buying a larger property than you initially planned.
This is because you’re more likely to stay put for longer (removing the cost of moving house again) as you need more space for families or pets or intergenerational living, but also because you can make cash from your home. The Rent a Room scheme lets you earn up to £7,500 a year tax-free if you take in a lodger. So, if you size up to an extra bedroom, a lodger could end up paying half of your annual mortgage costs!
Go Second-hand
When you’re making your moving-house budget, it’s easy to forget that you’ll need to buy all sorts of furniture and appliances, too. The cost can easily add up. Apps like NextDoor and Freecycle can often bring up some absolute bargains of cheap or free furniture, as long as you can collect it.
Use this secondhand furniture to furnish your new house while you settle in. When you’ve saved up to buy something new, you could even try upcycling the old furniture to sell for a profit!
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