It’s the hardest time to buy a home in 150 years. House prices are now more than nine times the average salary – the last time we saw this was back in 1876.
However, that doesn’t mean it’s impossible. Here’s how two of our editorial team did it and their top tips.
Abi, Digital Content Executive
“In 2021 I was lucky enough to buy a house just outside Bristol at 25. But it wouldn’t have been possible without two key things.
First, my parents were kind enough to gift me half the deposit. And second, I was also able to split the cost of buying a first home with my fiancé.
Buying with a partner, whether romantic or platonic, can help share both the financial and mental load of buying a house.
It also helped that his brother had recently purchased his first home and could warn us about unexpected costs.
For example, searches and survey costs can be expensive (consider using a conveyancing calculator to avoid the shock), and what a realistic timeframe was (add on three more months than what you’d expect).”
Christian, Investment Writer
“Buying your first home before you’re 30 could be easier than you think.
The government has a variety of schemes to help and using these was my first step to being able to get onto the property ladder.
I used the government’s Help to Buy scheme. This allowed me to borrow 20% of the value of a new-build property as a loan from the government that doesn’t need to start being paid back until after five years.
While the scheme has since ended, there are other schemes still available.
My top tip for buying your first home before 30 would be to start saving early. I opened a Lifetime ISA (LISA) in 2018 and transferred in a Cash ISA that I had had since I was 18. Making monthly payments and then receiving the government bonus of 25% on top helped me save even more. I was able to buy my first home after a number of years of regularly saving and investing this money in a variety of funds.
By using my annual LISA allowance, it helped fund my deposit and lowered the amount I needed for a mortgage. In some years, I was able to use the full £4,000 allowance and save £5,000 for the year with the government’s £1000 bonus.
Along with the help of a LISA, I also lived at home while saving, paying rent to my parents but living independently under their roof. This helped me save enough to move out and buy my first home without another person on the mortgage by 26, while remaining a basic-rate taxpayer throughout.”
Not everyone will be able to get help from family or friends, so it’s important to make sure you focus on the things you can control.
This means making the most of the help anyone can get – the government. One of the best ways to do this is through a LISA – you could save up to £5,000 every tax year with the government bonus.
ISA and tax rules can change, and any benefits depend on your circumstances. Unlike cash, investments can fall as well as rise in value so you may not get back what you invest.
This article isn’t personal advice. If you’re not sure what’s right for your circumstances, ask for financial advice.
Help supercharge your deposit
The HL Lifetime ISA lets you invest for a first home or later life. Some of the benefits are:
- Costs cut. We’ve cut our annual account charge from 0.45% to 0.25%, so that more of what you pay in can help towards your goals. Other charges still apply.
- £4,000 annual allowance. Any investment returns are free from UK income and capital gains tax.
- 25% government bonus. For every £4 you save, you get £1 extra – up to £1,000 per tax year.
You can open a LISA between 18 and 39. After 12 months from the first payment, you can use the money to make an eligible house purchase for a property worth up to £450,000. Or you can wait until you’re 60 and take your money out then.
If you want to take money out before you’re 60 and you aren’t buying your first home, there’s usually a 25% government charge. That means you could get back less than you originally put in.
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