Hello hello! For my long time followers, you may remember the drama I had with trying to buy my first house when I was 23, I thought I’d found the London house of my dreams but we hit A LOT of roadblocks along the way, I was eaten by the London property market straight away and realised house buying really isn’t easy. Looking forward to now, I recognise that purchase was a lesson learnt and I am so glad I didn’t get that house. Life has a funny way of working itself out. Before I moved to rent in London I was looking to buy there and I recall my mum saying that I will find house buying a lot more difficult than I think and that even with the most straight-forward of property purchases there are always issues. As usual, mum was right and although I haven’t talked about the details but 3 house purchases have now unfortunately been abandoned for one reason or another. I always get to that final stage and then POW – something goes wrong...
In my dreams I own a huge house with a big sweeping drive, beautiful gardens and lots of different rooms so I can have my family and friends to stay over often and bake for them. It’s not about being materialistic, it’s more about me wanting to create the perfect happy life with my family and friends, eating and drinking while laughing out loud with them and making great memories. I don’t think there is anything more important in life than family and friends and creating happy times with them. My career and friends are now in London, so I’m buying here, plus it’s a great place to invest into. However, in my heart, I know in a few years I’ll want my (hopefully) forever home, back ‘home-home’ near my loved ones in Yorkshire.
I am asked about saving money all the time for a house, money saving tips and just general questions about the housing market so here are more tips and tricks I have learnt along the way. I am very grateful to have partnered with The Nottingham for the mortgage savings product options part of this advertorial blog post. You may have seen me share some of their articles on Instagram stories a few weeks ago.
They have so many articles with expert information and tips when it comes to buying a house, deposits, savings and more so it’s amazing I can now share the things I have learnt from the experts and answer some of the most common questions I am asked about the whole process.
Check out their Essential Guides for mortgages and savings for lots of helpful hints on savings and information on first time buyer mortgages.
“How much money do I need to save to buy a house?”
The fact of the matter is that the minimum amount of money you will have to put into buying a house is 5% of the full price of the house. Having nearer 10% will open up the amount of lenders that will be available for your mortgage. For example, if I wanted to buy a house for £200,000 I would need to have at least £20,000 for the deposit plus money for solicitor’s fees, surveys and other moving expenses.
“How do I save money?”
When I was little mum worried that I would spend money like water because I loved getting shiny new things! To nip any bad habits in the bud, from the age of 16 she gently ‘suggested’ that I worked part time and funded my own ’nice to haves’ and she would fund my necessities. It was a smart move on her part. I didn’t like it at the time but it taught me a lot about the value of money and I’m grateful that I had that lesson in life as it’s where my desire to make sure I had savings was born.
I have been saving avidly for my dream house since I was in high school. To tell you the truth, I started saving little amounts since the age of 16. I was grafting at Morrison’s and All Saints on evenings and weekends and I hope that some of the ways I have saved money will in turn give you a spark to save too.
Let’s face it, saving is boring isn’t it? You earn some money, pay your bills and want to treat yourself with the rest and there are so many great things to treat yourself with! But, what I’ve learned is that these are things that are short term treats that come and go and didn’t give me any substance on which to base my life. A home, on the other hand, is a long term purchase that can be cherished, developed and somewhere that long term memories can be made with your family and friends. It’s okay to treat yourself though, life is for living after all and without treats, you will be very bored of saving!
“How do I save money when I don’t really earn that much?”
For my house buying experience, I applied two very simple principles…
1. I spent less
2. I saved more
The two combined meant changing some habits but as I began to see my savings grow, it inspired me to work even harder to grow my house deposit more.
It also inspired me to think about creative ways to make money. While saving a good deposit has literally taken me years and hard work, now I’ve done it I’m proud! Had I spent all that money frivolously, what would I have to show for it now? Saving money doesn’t always have to involve earning more money as that isn’t always possible. It can have lots to do with creating extra money from what you already have. Many of my tips are based on that principle.
1. UNDERSTAND YOUR MONEY: First things first, way back then when I was 16, I worked out how much money I had available to me each month. I then worked out what I had to spend on essentials (at the time this was not much as I was at school and mum was paying for my real essentials but now I have essential bills that I budget for). I also worked out what I spent each month on ‘nice to haves’ like clothes, eating out and holidays.
Taking account of all that I then worked out what that left me with each month and that became my savings. I love having different savings pots set up, one for the house, one for my holidays and I’ll put money into them every month. I find having a number of different really helps me and I deposit a little bit in them each month. That way I have always got cash available to me for the things I need and I don’t end up dipping in to main savings. It took a bit to build these funds up but doing the hard work up front makes it easier in the long run.
2. SET A REALISTIC TARGET: Using what I had left and allowing for fluctuations, I then knew what I could realistically save each month. I opened a savings account online and committed to saving my target amount each month. Believe me it was not a lot but even saving £30 per month is better than saving nothing at all and eventually mounts up. I set myself a target date to save £1,000 by. Once I had achieved this I set myself a further target date to save another £1000 and so on and so forth. I knew I was doing a year abroad in Canada and remember my boyfriend at the time being given £10,000 by his parents to enjoy it, I set myself the task to save up £10,000 for my trip so I could have a whirlwind year. I didn’t think I’d do it, but I did. I was so proud of myself. Do manage your expectations carefully based on what you can realistically afford. When I worked part time as a teenager I earned around £500 per month, I was not going to be able to save millions so I had to be realistic and start off with a very small amount.
3. EARN EXTRA IF YOU CAN: Although it was time consuming during exams and on top of working part-time, eBay was my friend back in the day because I had lots of things that I had accumulated that I no longer wanted so I set up an account and sold items to raise further money. I also participated in litter picking at local events which was paid very well and was a great flexible earner. I was strict with myself and made sure that anything I earned over and above my part time wages went in to my savings pot. Nowadays I recommend Depop and I regularly recycle my wardrobe on there.
4. KEEP A RECORD OF ALL OUTGOINGS: My Mum always says 'The devil is in the detail’ and encouraged me to write down everything I spend each month and examine where I can make saving. Trust me, you will always find something where you can cut back on. I mean literally keep a record of absolutely everything and look back over it at the end of the month to see where you can save ££££s. Recently, I was really surprised at how much money I spent on travel so I started to walk much more and bingo, my travelling expenses each month have halved! I started writing down how much a taxi would have cost me and then walked instead; I saved over £100 per week just from doing this. Even things like we got our own special coffee machine, it doesn’t mean I don’t love an iced latte whilst out and about, but it means I don’t buy a coffee every morning as I can make one from home and claw money back that way. Back in the day I was staggered at how much I racked up on my favourite Starbucks drink so immediately made that a once a week treat, not everyday! Again, when I go through this exercise any savings I find go in to my savings account.
5. SHOP AROUND FOR BEST DEALS AND DON’T AUTO RENEW: If you own or rent a home, take a careful look at where you could potentially downgrade or re-negotiate things. For example, when my mobile phone contract comes up for renewal I never simply just renew it. I always search for the best deal and go to my provider’s retention team and ask what they can give me to retain my business. This time around I have actually bought an iPhone outright (which obviously meant a financial outlay) and gone to SIM only. Believe me, over the 2 year contract this has saved me hundreds and I have got a much better package. Companies should value your business and work for it so challenge them; they will not want to lose you. Also, I never just auto renew car insurance and travel insurance, I always look around for the best deals and where I get a reduction I bank the reduction rather than spend it. It may be time consuming but it’s worth it. Again, if you save money by doing these things, put it away to build up your deposit! Put a note in your diary when it’s time to renew so you don’t forget, often they’ll just auto-renew without telling you.
6. LOOK FOR THE DEALS THAT YOUR UTILITIES PROVIDERS HAVE TO OFFER: Think about the money you layout each month on utility bills and ask if you can do anything about them. For example, some companies now offer schemes where if you use electric and gas more at night time you get a reduced rate. What about your water? Is it worth you being on a water meter? When I moved in to rented accommodation it took me a while but I realised that by the clever use of gas and electric I can save quite a bit each month and now I’m better off as a result.
7. DON’T WASTE FOOD: Since getting my own place I’ve realised the importance of using all the food I have and not wasting it - it is just too expensive and wasting food is just plain wrong when there are people in the world who are starving. Whenever we have left overs we always use them in one way or another the next day or if I have certain left over foods I freeze them for another day. I even freeze my bananas or if they go super spotty and brown they’re perfect for banana bread. Food really is a major expense - add up the true cost of your weekly shop and all the bits and pieces you spend on top and you will be astounded. There are certain things (Greek yoghurt I’m looking at you) I will ONLY buy if they are on offer.
8. SHOP THE SALES: Believe me whether its food, clothes, housing items - anything, I always look for the best prices and I have saved lots of money in doing that. You guys probably know this as I am forever telling you when key items are on sale!
9. ASK FOR A RENT REDUCTION: If you are a long term paying tenant who has built up a good reputation with your landlord, there is always the opportunity to ask for a rent reduction. I achieved a £20.00 a month reduction when I was in my university accommodation and guess what - yep, I saved the £20.00 per month in my savings account!
10. LOOK AROUND TO SEE WHAT ACCOUNTS CAN HELP:
This part is an AD for Nottingham Building Society and please note I am not in any way trained to give financial advice so if you are interested in what I am going to talk to you about please do contact The Nottingham to discuss.
The Nottingham offer a savings account called the Lifetime ISA and it could be worth considering if you are saving for a house deposit as it can boost your funds considerably each tax year with a free Government bonus of 25% up to £1,000 each tax year. You can save a maximum of £4,000 each tax year and you earn interest on top.
The Lifetime ISA could be suitable for you if you are aged 18-39 and are planning to buy your first home. Even if you aren’t, it can be used as a long term savings account for retirement purposes as you can save in the account until you are 50 and withdraw it when you are 60. These are the only two uses for the account and you can use the account for your both reasons if you buy your house first.
You can open a Lifetime ISA with £10 in any of the The Nottingham’s branches if you are local to one of them, or if you prefer you can easily open one online. Remember, you’ll need your National Insurance number to sign up with!
You can withdraw money without penalty when you are ready to buy your first home (so long as you’ve had the account for 12 months). Alternatively if you don’t use it to buy a home you can withdraw it penalty free when you are 60. There are a few things to bear in mind if you do opt for this as your house deposit savings vehicle - because there are penalties* for withdrawing for pretty much all other reasons than for your first home or retirement and also if you already have an ISA you can run this alongside it but it does form part of your overall £20,000 ISA annual allowance.
Taking account of all that I then worked out what that left me with each month and that became my savings. I love having different savings pots set up, one for the house, one for my holidays and I’ll put money into them every month. I find having a number of different really helps me and I deposit a little bit in them each month. That way I have always got cash available to me for the things I need and I don’t end up dipping in to main savings. It took a bit to build these funds up but doing the hard work up front makes it easier in the long run.
2. SET A REALISTIC TARGET: Using what I had left and allowing for fluctuations, I then knew what I could realistically save each month. I opened a savings account online and committed to saving my target amount each month. Believe me it was not a lot but even saving £30 per month is better than saving nothing at all and eventually mounts up. I set myself a target date to save £1,000 by. Once I had achieved this I set myself a further target date to save another £1000 and so on and so forth. I knew I was doing a year abroad in Canada and remember my boyfriend at the time being given £10,000 by his parents to enjoy it, I set myself the task to save up £10,000 for my trip so I could have a whirlwind year. I didn’t think I’d do it, but I did. I was so proud of myself. Do manage your expectations carefully based on what you can realistically afford. When I worked part time as a teenager I earned around £500 per month, I was not going to be able to save millions so I had to be realistic and start off with a very small amount.
3. EARN EXTRA IF YOU CAN: Although it was time consuming during exams and on top of working part-time, eBay was my friend back in the day because I had lots of things that I had accumulated that I no longer wanted so I set up an account and sold items to raise further money. I also participated in litter picking at local events which was paid very well and was a great flexible earner. I was strict with myself and made sure that anything I earned over and above my part time wages went in to my savings pot. Nowadays I recommend Depop and I regularly recycle my wardrobe on there.
4. KEEP A RECORD OF ALL OUTGOINGS: My Mum always says 'The devil is in the detail’ and encouraged me to write down everything I spend each month and examine where I can make saving. Trust me, you will always find something where you can cut back on. I mean literally keep a record of absolutely everything and look back over it at the end of the month to see where you can save ££££s. Recently, I was really surprised at how much money I spent on travel so I started to walk much more and bingo, my travelling expenses each month have halved! I started writing down how much a taxi would have cost me and then walked instead; I saved over £100 per week just from doing this. Even things like we got our own special coffee machine, it doesn’t mean I don’t love an iced latte whilst out and about, but it means I don’t buy a coffee every morning as I can make one from home and claw money back that way. Back in the day I was staggered at how much I racked up on my favourite Starbucks drink so immediately made that a once a week treat, not everyday! Again, when I go through this exercise any savings I find go in to my savings account.
5. SHOP AROUND FOR BEST DEALS AND DON’T AUTO RENEW: If you own or rent a home, take a careful look at where you could potentially downgrade or re-negotiate things. For example, when my mobile phone contract comes up for renewal I never simply just renew it. I always search for the best deal and go to my provider’s retention team and ask what they can give me to retain my business. This time around I have actually bought an iPhone outright (which obviously meant a financial outlay) and gone to SIM only. Believe me, over the 2 year contract this has saved me hundreds and I have got a much better package. Companies should value your business and work for it so challenge them; they will not want to lose you. Also, I never just auto renew car insurance and travel insurance, I always look around for the best deals and where I get a reduction I bank the reduction rather than spend it. It may be time consuming but it’s worth it. Again, if you save money by doing these things, put it away to build up your deposit! Put a note in your diary when it’s time to renew so you don’t forget, often they’ll just auto-renew without telling you.
6. LOOK FOR THE DEALS THAT YOUR UTILITIES PROVIDERS HAVE TO OFFER: Think about the money you layout each month on utility bills and ask if you can do anything about them. For example, some companies now offer schemes where if you use electric and gas more at night time you get a reduced rate. What about your water? Is it worth you being on a water meter? When I moved in to rented accommodation it took me a while but I realised that by the clever use of gas and electric I can save quite a bit each month and now I’m better off as a result.
7. DON’T WASTE FOOD: Since getting my own place I’ve realised the importance of using all the food I have and not wasting it - it is just too expensive and wasting food is just plain wrong when there are people in the world who are starving. Whenever we have left overs we always use them in one way or another the next day or if I have certain left over foods I freeze them for another day. I even freeze my bananas or if they go super spotty and brown they’re perfect for banana bread. Food really is a major expense - add up the true cost of your weekly shop and all the bits and pieces you spend on top and you will be astounded. There are certain things (Greek yoghurt I’m looking at you) I will ONLY buy if they are on offer.
8. SHOP THE SALES: Believe me whether its food, clothes, housing items - anything, I always look for the best prices and I have saved lots of money in doing that. You guys probably know this as I am forever telling you when key items are on sale!
9. ASK FOR A RENT REDUCTION: If you are a long term paying tenant who has built up a good reputation with your landlord, there is always the opportunity to ask for a rent reduction. I achieved a £20.00 a month reduction when I was in my university accommodation and guess what - yep, I saved the £20.00 per month in my savings account!
10. LOOK AROUND TO SEE WHAT ACCOUNTS CAN HELP:
This part is an AD for Nottingham Building Society and please note I am not in any way trained to give financial advice so if you are interested in what I am going to talk to you about please do contact The Nottingham to discuss.
The Nottingham offer a savings account called the Lifetime ISA and it could be worth considering if you are saving for a house deposit as it can boost your funds considerably each tax year with a free Government bonus of 25% up to £1,000 each tax year. You can save a maximum of £4,000 each tax year and you earn interest on top.
The Lifetime ISA could be suitable for you if you are aged 18-39 and are planning to buy your first home. Even if you aren’t, it can be used as a long term savings account for retirement purposes as you can save in the account until you are 50 and withdraw it when you are 60. These are the only two uses for the account and you can use the account for your both reasons if you buy your house first.
You can open a Lifetime ISA with £10 in any of the The Nottingham’s branches if you are local to one of them, or if you prefer you can easily open one online. Remember, you’ll need your National Insurance number to sign up with!
You can withdraw money without penalty when you are ready to buy your first home (so long as you’ve had the account for 12 months). Alternatively if you don’t use it to buy a home you can withdraw it penalty free when you are 60. There are a few things to bear in mind if you do opt for this as your house deposit savings vehicle - because there are penalties* for withdrawing for pretty much all other reasons than for your first home or retirement and also if you already have an ISA you can run this alongside it but it does form part of your overall £20,000 ISA annual allowance.
What else have I learnt about the housing market?
It’s fast paced - In London particularly, it’s fast paced and properties literally sell within days of being listed.
Don’t be pressured - Saying that though, don’t be pressured when an estate agent tells you ‘there’s a cash buyer’ there are sadly a lot of sales tactics used to try and make you offer more than you’d want to. Hold your ground.
Don’t be afraid to do a second viewing - I often view a house first, mull over it then go back a day or two after, no matter how annoying you feel, push for another viewing.
You can never view too many houses - When I first started looking I asked someone how many houses I should view. There is no right or wrong answer. I have now probably viewed over 100 houses!
You’ll quickly start to understand what you want and what you don’t want - Originally we were viewing any houses, but now we are set on what we want and what our needs are. We want a kitchen that goes out into a garden area and outdoor space (which is hard to come by in London) is a must for us. We quickly recognised that and now we can stop viewing houses without outdoor space or without the potential to add outdoor space.
Your phone won’t stop ringing - Be prepared for LOTS of phone calls, often properties will be recommended which really just don’t appeal or are in the complete opposite area to where you want to be. Make sure the estate agents know exactly what’s on your tick list.
Pay for surveys - If I hadn’t paid for the top surveys in the houses I bought, I would be totally screwed by now. A house can look perfect on the outside but when the experts go inside and dig deeper, they can find issues which cost a lot to change. It saves you money down the line as you can then either pull out or negotiate on price. Do not scrimp on surveys - it’s better to find any issues upfront.
My final piece of advice? Review your plan continually as things change. Your outgoings will change, jobs change, earnings change and there’s always something to pay for. I continually review my finances to see where I can save extra to continue building what I have and I would encourage you to do the same. Need even more tips? Check out The Nottingham’s article ‘How to save for a deposit’!
* You can withdraw money from a Lifetime ISA to buy your first home, or at age 60. Other withdrawals will usually mean you will incur a Government withdrawal charge This is 20% until 5th April 2021 and 25% thereafter so you could get back less than you put in. Full Ts & Cs available at thenottingham.com.
Lots of love, Em x
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