You would be forgiven for thinking that with all the property headlines including "first time buyers' average deposit is £60k” or “it will take 20 or 30 years to save for a deposit”, and as a result you are ‘forced’ to rent from "horrible landlords"!
It's a pretty grim picture for anyone trying to buy their own home, and it's enough to put anyone off bothering to save to get on the property ladder.
The good news is these figures and the time it takes to save for a deposit are often over exaggerated.
Ignore average property prices
There is a simple reason for this which I will explain.
In Nottingham (where I come from) most of the data used for this type of scary headline looks at ‘average house prices’ and ‘average incomes’.
What it doesn’t do is look at the real situation ‘on the ground’.
For example, how much do people like teachers, nurses or police earn as a starting salary or a few years into working and what properties are on the market currently they could afford?
In Nottingham, the average house price is just over £80,000. However, for most first time buyers, they can buy a flat for £50-£60k or even a two bed house nearby for £60k.
When you look at where you want to live in this way, it’s much easier to see that being able to buy is a realistic option.
Saving for a deposit
You do have to save up and this means compromising on things you spend your money on for a few years.
That isn’t new! When I was a first time buyer back in the early 1990s, I realise now how lucky I was as this was one of the most affordable times in the history of property ownership to buy.
However, I lived in Croydon at the time and despite being in a good job, I couldn’t afford to buy on my own, so I had to buy with a friend.
How I saved for a deposit
To save for my deposit, I hardly ever had nights out, didn’t have holidays, took lunch into work, waited for birthdays and Christmas for things like new clothes or things I needed.
It was too long ago for computers, broadband and phone gadgets for me to spend my cash on so I saved a lot of money not buying these!
How other generations saved for a deposit
Talking to first time buyers in the past:-
If you aren’t sure all this will work, then add up what you spend your money on that you could live without for up to three years and see how much you can save.
We estimate this could be anything from £3k to £5k per year, which would be a £9k to £15k deposit.
That's 5-10% deposit for the average house price of £160,000!
Affordable homes you might be able to buy
If you can’t afford to purchase by yourself, consider:-