Those of you who follow me on Twitter, Instagram or Snapchat probably know this already… Taylor and I bought a house! Yay! Don’t worry, I have some pretty interior and ‘home tour’ blog posts planned, but first of all, I wanted to explain how we got to this position, and hopefully encourage others to follow their hearts and dreams and not let the disheartening media around being a first time buyer affect them. Seeing as the average first time buyer in the UK is aged 32, a lot of people are actually baffled when they realise Taylor and I are both 22 (I was 21 when we bought the house!) and we’re happy homeowners.
First of all, let’s break a few common myths about being a young homeowner;
‘You’re going to be in debt to your parents for the rest of your life! How are you going to repay them?!’
Well… they didn’t give us any money…so….ugh. WHY does everyone assume our parents gave us a massive handout to buy a house?! That isn’t the only way young people can afford a house. Of course, there’s nothing wrong with this – if your family can afford it then fab, great for you! But please, please, please, don’t just assume everyone who is under the age of 30 has had help from mum and dad. It puts us in an awkward position when we have to reply ‘well, no, urm, we bought it ourselves’.
This whole ‘young people won’t be able to afford a house because they buy avocado toast and lattes’ thing proper grinds me up the wrong way. For the last year and a half at my job in central London, I had 2-3 yummy caramel lattes a week on my walk to work, and must admit I have purchased avocado toast before. So it’s absolute BS. Yes, you obviously have to save money, but saving the cost of a freakin latte every now and then is hardly gonna get you a 5-10% deposit on a house now is it?!
‘You’re never going to have a life!’ or ‘You’re wishing your life away!’
I’m the first to admit that being a homeowner is hard work. Suddenly, I have a lot more floor space to hoover and dust. Laundry is time consuming. The turf needs watering and the toilets bleaching. Whereas cleaning my bedroom in my parent’s house could take 20 minutes, suddenly cleaning takes a good few hours, if not a whole day, to get the house spic and span. It’s all about finding life balance though. Yes, I have a house…. but I still go out with my friends, I still watch Netflix and I still faff around procrastinating by playing with my cat. If I wanted to go on holiday, I could, and Taylor still has his nice car! You just have to organise your time and money well!
So… onto the main question of this blog post, and the main question people tend to ask me… How did Taylor and I buy a house at 21?
I had my mind set on buying a house for a very long time. I wanted to move out as quickly as possible – I needed my own space, my own kitchen to fill up with the food I like, and a place to come home to that was ‘mine’. So, as soon as I got my first job after school, I started putting money aside each month. It started small – £50 a month turned into £75 a month which eventually, in my more recent jobs, ended up with me putting a much more substantial amount away every month. I was extremely lucky to be in a position where I was still living at home, so I wasn’t paying rent, meaning this money was essentially ‘disposable income’ which I decided to put into my savings. It took me four years to save my half of our deposit – but everyone’s budget and situation is going to be different. Don’t compare yourself to others.
My tips for saving for a deposit;
Budget and set realistic goals
Work out your total income and outgoings – if you’re already paying £600 rent a month, and have other outgoings of £400, and have an income of £1500 a month, you’re left with only £500 a month to spend and save. How much of this can you actually afford to put away, without losing your quality of life? You still need to be able to have fun and live your life to the full! Pop all your income and outgoings into an excel spreadsheet, and start off with something small. Trial it out for a few months – if it’s too difficult, lower it. Easy to save? Up it a little bit! Use your budget to work out how many years it’ll take you to save the deposit you need, and set realistic goals. If you currently have £0 in your savings account, it’s probably not going to be realistic to expect £10,000 in a year.
Save the money at the beginning of the month
I cannot preach this enough – once you’ve worked out your budget, put it into your savings as soon as you’ve been paid! You’ve already committed yourself to your budget, you know it is financially stable, so don’t let it sit in your current account and tempt you. If you put it away at the beginning of the month, chances are you probably won’t even realise it’s gone.
Have a separate savings account
So, you’ve set your budget and put your savings into your savings account at the beginning of the month – well done you! But, you’ve also got some other savings floating around – holiday, new car, a new laptop. I found the easiest way to not accidentally end up spending my deposit savings on a holiday, was to literally open up a different online savings account for each thing I was saving for. I literally had a savings account called ‘Future’. Deposit money only went into this, and I refused to touch it unless I absolutely had to. I also had a bank account called ‘iPhone’ at one point, as well as ‘Car Fund’ which I used to ensure I had enough to pay off my car insurance each year. It makes life SO much easier to track your finances, and see in a glimpse how much money you have for each thing.
Get a financial advisor
You’ve started saving, and you think you’re doing ok… but what now? Just carry on saving? My advice would be to go and see a financial advisor as soon as you can. Not only will they be able to help you with your budgeting if you’re struggling with that on your own, but their job is literally to advise you of all things money related. Taylor and I went and saw a financial advisor about a year before we actually decided to buy a house – we spent two hours learning about the different types of mortgages, the different costs involved (Stamp Duty, Solicitor fees, Mortgage Fees etc), analysing our income and expenditure to work out our affordability etc. Most estate agents have financial advisors who you can see for free – they’ll take you through all the different steps towards buying a house, and when you’re ready, they’ll help you find the right mortgage for you and help process your application, too.
When we were ready to buy a house, we went and saw our financial advisor again – this time, we focused on the mortgage. What was the cost of the flat we were looking at? How much could we afford to pay on our salaries each month? How much deposit did we have? We were shocked to find out that we could actually afford a much larger mortgage than we ever thought. You’ll probably be surprised too – especially whilst the interest rates are so low at the moment!
Psst – if anyone is based in Kent/Sussex: my financial advisor is the lovely Louise from Florence Mortgages. She’s absolutely fab and comes with a high recommendation from me!
Look into government help to buy schemes
Okay so, when these government schemes first started popping up, I must admit I was skeptical. A good financial advisor will be able to talk you through all the different schemes available for you. There’s all sorts of special ISAs available now, as well as other schemes, and most are much better than you might initially think.
Taylor and I actually used the Help to Buy Equity Loan scheme – we essentially got a ‘free’ deposit from the government to put down on our house, meaning that our budget suddenly just grew. (You do have to pay it back eventually, but it comes out when you sell the house at a later date unless you choose to pay it off earlier). For example, if you had a 5% deposit of £10k, the government will boost this to a 25% deposit by putting down £40k. You then only need to get a 75% mortgage of £150k – which is much more affordable than trying to find a 95% mortgage of £190,000 or having a £50k deposit yourself. So, you think you might only be able to afford a studio or 1 bed flat, but the little added boost from the government might just mean that you’re able to get something a little bit bigger than you had hoped! We were stunned when we found out we were able to push our budget to easily afford a three bed house!
There’s also similar schemes such as the Shared Ownership scheme – in which you own a share of the house and pay mortgage on your share, and pay rent on the share in which you don’t own. There’s a ton of options out there – it’s overwhelming at first, but trust me: it’s not as scary as you think!
Now, I don’t want to spoil the blog posts I have planned by spamming this post with pictures of our lovely little home, so instead, you can have a selfie we took on the day we picked up the keys and became legal homeowners…
Overall, if you set your mind to something – you’ll be able to do it! Sure, it won’t happen over night. But set a goal, do your research and work hard: your efforts will pay off!
I hope you find this post helpful – if you have any other questions on being a first time buyer or any other housey questions then please feel free to shoot them my way! Now that this post is done, you’ll be seeing a lot of interior posts on the blog soon – keep an eye out!