Best Saving Strategies to Reach Your Mortgage Deposit THIS Year

So, it’s officially 2024 and you’ve decided that this is the year you’re going to begin your homeownership journey. It may be tempting to hop straight on to Zoopla and start browsing homes, but unfortunately you’ve got a little way to go before that step, first you’ll need to save for your mortgage deposit.

In this blog, we’re uncovering the most practical and effective ways to save money in 2024 – NOT including sacrificing your social life or keeping your wallet under lock and key.

Set Financial Goals

Your first port of call is to set your financial goals. You’ll need to fully understand your budget in order know what exactly you’re aiming towards and how you’ll save for your mortgage deposit.

  • Understand your budget: Begin by evaluating your monthly income and spending. Differentiate between essential spending, like bills and food shops, and non-essential spending. This will help you allocate funds wisely whilst creating your budget.
  • Create a savings timeline: A well planned timeline will keep you on track and motivated during your savings journey. Make sure you set achievable goals and stick to them!
  • Potential costs and expenses: It’s important to be aware of costs that might creep up on you. Make sure you have an emergency pot with enough money to tie you over should you have any surprise expenses, like car trouble (or a last minute birthday present for your Mum).
Girl budgeting for her mortgage deposit

Budgeting Tips

It’s one thing to understand your budget, now it’s time to implement those saving strategies.

  • Cut down on unnecessary expenses: Identify non-essentials, like unused subscriptions or impulse buys, and wave goodbye. Redirect those funds into your first home fund. It’s about creating space for what really matters.
  • Utilise budgeting apps for tracking: Budgeting apps such as Snoop and Emma will help you to stay on tracks and enable you too see all of your spending and upcoming payments in one place. Some will highlight wasteful subscriptions, and some give you ways to save based on where you spend.

Spending Habits

It’ll be tricky to save for your mortgage deposit if you’re still splashing your cash willy-nilly. Here are a couple ways you can rein it in.

  • Make informed purchasing decisions: It’s time to adjust your mindset to make every penny count. Instead of impulse buys, try digging into reviews, comparing prices, and snagging deals.
  • Explore affordable alternatives: Craving your morning latte fix from Gail’s or a fancy dinner out? Explore affordable alternatives! Opt for homemade coffee or a cosy night in with friends. Small changes add up, leaving more cash for your first home fund.
Ditch the expensive coffee to save for your mortgage deposit!

Income Boosting Strategies

As well as saving, it’s worth thinking about ways that you can boost your income to reach your mortgage deposit.

  • Exploring additional income streams: Consider exploring side hustles. Whether it’s freelancing, tutoring, or turning a hobby into cash, these additional income streams can fast-track your journey to homeownership.

Remember, saving for your mortgage deposit isn’t about skipping the fun stuff – it’s about making savvy choices that align with your goals. From budgeting to exploring side gigs, every step counts toward your dream home. So, sip your homemade coffee and know that each penny saved gets you closer to that front door key. Here’s to getting one step closer to saying “home sweet home”!

Visit pocketliving.com and get started on your homeownership journey today. By creating your My Pocket account, you can explore the range of 20% discount, 100% ownership homes tailored for you.

Why Now is the Right Time for First Time Buyers to Get on the Property Ladder

In a world filled with clickbait headlines and seemingly endless debates about the right time to buy a home, it’s easy to feel like you’re caught in a whirlwind of uncertainty. But guess what? Amid all the noise, there’s one simple truth that stands tall and steadfast: Now could very well be the perfect time for first-time buyers to embark on their homeownership journey. We interviewed seasoned Mortgage Advisor, Anthony Hall, to explore why, despite what you might have heard about mortgage interest rates, the time to buy is now.

Current Market Overview

Let’s start with the big question: Is now the right time to buy? To find out, we’re diving deep into the mortgage market with the guidance of Anthony Hall, an expert with 16 years of experience in the mortgage industry, including 12 years helping Pocket buyers onto the ladder.

What are Mortgage Rates Today?
The last update on the base rate was in September 2023, when the Bank of England maintained it at 5.25%. The base rate remaining unchanged at 5.25% is good news for the mortgage market as new borrowers are boosted by the base rate being held as lenders use the BOE base rate when calculating their stress test rate. When the rate rises this in turn reduces the amount of borrowing available to purchasers. Mortgage borrowers on variable rates or trackers will be breathing a sigh of relief as they will not see an increase in their monthly payments which has gone up 5 times this year!

According to Anthony, “the current mortgage market is, I would say, currently stable.” However, it’s been a journey to this point. Following a rollercoaster ride of interest rate fluctuations, the market has landed on a steadier path. What once felt like financial whiplash due to volatile rates has now evolved into a more predictable landscape. Factors like inflation, the Bank of England’s rate adjustments, and lender responses have all played their part in the market’s ups and downs.

Historical Mortgage Rate Trends
Let’s take a trip down memory lane, shall we? Anthony’s expertise is instrumental in navigating these waters and he highlighted an essential point: the current rates, while seemingly high in today’s context, are comfortably within the historical average. For the past quarter-century, the norm has hovered around 5%. The record-low rates we’ve grown accustomed to in recent years following the 2008 financial crisis were the real anomaly. Yes, we’ve been spoiled by those low rates, but in reality we’re returning to a more typical interest rate scenario, akin to that of 2008 when rates exceeded 7% for some buyers. We’re heading toward a market where 3% to 5% interest rates are the new normal. The good news? We’re not expecting rates to crash anytime soon. It’s all about settling into a healthier, more sustainable range.

What does this mean for the average homebuyer? In Anthony’s words, “if you can afford a mortgage now and get a fixed rate for five years, your rate won’t change during that time.” It’s about securing financial predictability. While the crystal ball remains elusive, the outlook is one of gradual, measured rate increases. The takeaway? Buying a home today, with a manageable fixed-rate mortgage, can set you on a path to financial stability and potential long-term gains. History has shown that property in the UK consistently appreciates, and despite occasional dips in reported growth rates, the underlying value remains robust.

The Downsides of Waiting to Buy a House

Here’s the deal: when you put off buying a home, you’re not just hitting the pause button on homeownership. You’re also missing out on a world of potential benefits. Let’s delve into why waiting might not be the best move.

  • First and foremost, it’s all about opportunity. So you’ve got your eye on a brand-new property, and it ticks all your dream home boxes. The catch? New builds tend to have limited availability. So while you’re contemplating your options, someone else might swoop in and claim your ideal property. When it comes to securing that perfect place, hesitation could cost you more than you think.
  • Now, let’s talk finances. Renting is like pouring your hard-earned money into a bottomless pit. Every month, you’re handing over your cash without building equity or investing in your future. Plus, there’s the looming spectre of rent increases. As interest rates go up, landlords may decide to pass those costs onto you. So that sweet rental deal you’ve got today might not look so great in the near future.
Average rental value for new tenancies in London according to Home Let
Rents in London have increased by 13.0% compared to last year.
  • Security matters, too. Renting means you’re at the mercy of your landlord’s plans. They might decide to sell the property, forcing you to pack your bags and find a new place to call home. That’s hardly the stable and secure future you envision, is it?
  • Then there’s the question of interest rates. Anthony puts it bluntly: “We don’t know what’s going to happen definitively with interest rates.” Waiting for them to drop might leave you in a never-ending waiting game. While rates aren’t likely to return to the super-low levels of the past, they’re also not skyrocketing uncontrollably. So the real question is: when do you decide it’s the right interest rate for you? The sooner you start paying down your mortgage, the quicker you’re building equity and securing your financial future.

So, when you consider all these factors, it’s pretty clear – waiting might not be the wisest move. You could be missing out on the perfect property, wasting money on rent, and forfeiting the security and equity that come with homeownership. It’s time to seize the day and embark on your homeownership journey. Your future self will thank you.

Is now the right time to buy for you?

There are a number of things to consider when contemplating if now really is the right time for you to buy. 

Affordability Assessment

Anthony stresses the importance of understanding your current financial standing. He remarks, “A lot of people don’t realise that they are in a position to buy because they haven’t been assessed or received proper advice.” The first step he suggests is getting a clear picture of your affordability. Start by creating a budget planner. Analyse your recent pay stubs and bank statements, meticulously documenting your income and expenses. This budget planner becomes your invaluable tool for determining what’s genuinely affordable each month. Anthony recommends, “Look for a mortgage affordability calculator online to assist you in this process.”

Credit Check

In addition to your budget, your credit report plays a pivotal role in the affordability equation. Anthony advises, “Take a close look at your credit history and reports to understand where you stand.” Outstanding commitments, such as car loans and credit card balances, impact your borrowing capacity, which, in turn, defines what you can afford to purchase. Keeping your credit history in check ensures you’re in the best position to secure a mortgage that aligns with your goals.

Life Goals and Needs

Here’s the exciting twist – your decision to buy a home isn’t just about market trends. It’s about your unique life goals and needs. Anthony’s take? “The right time to buy is when you can afford it.” Waiting for the stars to align in the market can be like waiting for a unicorn sighting – uncertain and lengthy. Meanwhile, you could be pouring your hard-earned cash into rent or living in a place that doesn’t quite fit your vibe. So, if your life goals and needs harmonise with homeownership, don’t wait for the market’s permission slip.

Addiscombe Grove CR0, Croydon

The Decision to Wait

Once you’ve conducted your affordability assessment and it aligns with your current budget, the question arises: should you wait for market conditions to shift, or is it time to take the plunge? Anthony offers a clear perspective: “The right time to buy is when you can afford it.” Waiting for interest rates to fluctuate or for headlines to declare an optimal moment can be a protracted, uncertain endeavour. During this wait, you could be spending substantial sums on rent or residing in a place that doesn’t quite suit your preferences. Anthony reinforces the point that “if you can afford to buy, waiting for market changes might not be the best course of action.”

3 Tips for first time buyers

In essence, the decision to buy a home is not solely driven by market dynamics but by your unique circumstances and financial capacity. Anthony suggests, “Speak to experts who understand the intricacies of interest rates and mortgages. They can provide tailored advice and guide you toward a decision that’s right for you.”

  • Tip 1: Income Insights
    First off, your income – it’s a game-changer when it comes to mortgages. Anthony says, “Different lenders treat your income differently.” If you’re the proud owner of a P60, get it ready. If you’re self-employed, gather those tax overviews and financial statements. And hey, if you’ve got an accountant, give them a shout – they’re like financial wizards for these kinds of things. Understanding how your income plays into the mortgage puzzle is your ticket to making the right moves.
  • Tip 2: Savings Savvy
    Now, let’s talk savings – the magic potion for a hefty deposit. Anthony advises, “Understand how much savings and deposit you’ll potentially have access to.” Whether it’s a generous gift from family or friends, get all the deets lined up. The more you know about your deposit, the clearer the borrowing picture becomes. Plus, it’s like having the answers before the big test – confidence booster, right? Oh, and here’s a pro tip: Check your credit report. Grab one for free from credit agencies, scrutinise it, and if you spot any hiccups, sort them out. Clean credit makes for smooth sailing in the mortgage world.
  • Tip 3: Budget Brilliance
    Lastly, let’s get down to brass tacks – your budget. Anthony’s top advice? “Put together a detailed budget planner.” Knowing how much you can comfortably spend each month is like having a superpower. It not only helps you choose the right mortgage but also lets you explore the mortgage products that are tailor-made for you. So, dive into your expenses and income, and emerge with a budget that’s your trusty sidekick on this homeownership journey.

In the world of real estate, the waiting game often leads to missed opportunities. The current mortgage market is stable, with rates favourable compared to historical trends. Hall emphasises that homeownership offers security, equity, and freedom from the rent cycle, So why wait for the perfect moment if you can make it now? 

Visit pocketliving.com and get started on your homeownership journey today. By creating your My Pocket account, you can explore the range of 20% discount, 100% ownership homes tailored for you.

Saving for your first home: ISAs, bank accounts and more

For many first time buyers, the most daunting part of the home buying process is saving for a house deposit. In particular, many wonder how to save for a house on a lower income and whether it’s even possible to do it at all.

Pocket Living is built around the idea that everyone should have a fair opportunity to get onto the housing ladder, so we’re going to share our best tips on saving for your first home, whatever your circumstances. We’ve included a range of information on ISAs, bank accounts and more to show you that there are plenty of options to consider to get yourself onto the housing ladder. Let’s get started.

Read More
Resident making a coffee in the kitchen of her Pocket home.

How to save money on gas and electric bills [tips for first time buyers]

The UK’s rising cost of living has affected us all, but if you’re a first time buyer, you might feel particularly keen to keep your finances in check. If you’re wondering how to save money on gas and electric bills, there are many simple ways to reduce your outgoings, particularly by living more sustainably.

Our residents are first time buyers on middle incomes, so we know how important it is to them to make savings wherever possible. Buying a new build home is a great start, and by making an energy savings plan, you can reduce your bills and rest assured that you’re taking measures to live more efficiently and cut down on unnecessary costs.

Read on to find out our tips for saving money on your bills. They may seem small but can make a big difference over time, so start now to let the pennies begin to add up!

Read More

Haule’s tips for furnishing your first home with vintage finds

This Second Hand September, we’ve teamed up with Haule, an online marketplace for vintage and second hand homeware, to talk about furnishing your first home. Second Hand September was created by Oxfam in 2019 and has inspired thousands of people to shop in a way that is kinder to people and the planet. 

We invited Haule to give some advice on furnishing your first home using vintage and second hand items. Read on to find out what they have to say.

A blog by Haule

Read More
Dimly lit bedroom in a Pocket home.

The benefits of buying a home (right now)

Buying a home is an investment in your future – but when you do it for the first time, it can feel really daunting. Considering the doom and gloom we hear every day on the news, it may seem particularly risky to take that next step. That’s why we asked Censeo Financial, our recommended Independent Mortgage Advisor, their thoughts on the benefits of buying a home right now, rather than waiting.

A blog by Censeo Financial

Read More
Moving-Home-Broadband

Broadband and moving home in 2022

Approximately one million people are left without broadband for over a week when moving home. While that doesn’t sound very long, if you’re remote working, home schooling or stream your TV instead of watching live, a week can seem like forever!

A little forward thinking goes a long way to make the transition as smooth as possible, especially if you’re a first time buyer. Read on to find out all you need to know about broadband and moving home, as well as the service we provide in our homes at Pocket Living.

Read More

First time buyer mortgage deposits: the ultimate guide

Did you know that a deposit is the biggest thing you need to save for in the home buying process? This can seem a bit daunting if you’re a first time buyer, especially if you’re not sure how big of a deposit you need or how to save for a deposit.

We’ve put together the ultimate guide on first time buyer mortgage deposits to get you on your way to homeownership, written especially with middle income earners in mind. Covering why a deposit is so important and what to do if you haven’t saved enough, this guide will help you put together a plan for saving for your first home.

Read More