Building up momentum – house viewings and free money!

Before I continue, I should probably explain the ‘free money’ part of my post before people begin to think I’m running some kind of give away!

You may recall in a previous post how we had filled our Lifetime ISA.  This is a special account that you can use for the purchase of your first home or retirement.  You can save up to £4000 in it each financial year and the government will top up the balance by 25%.  Well, we just received the bonus today, it was a good feeling! Even better was that for this first year you could transfer your Help to Buy ISA and receive the bonus on that amount too.  It has given our house deposit fund a good boost.

Another exciting development is that we have booked to view three houses next week! All three are located within 10 miles of my husband’s family.  We’re still not sure where we want to buy but these three places tick a few of our main requirements which are:

  • Be freehold (find out more about that here)
  • Be within our price range (this should be common sense but it is surprising how many people overextend when looking at properties!)
  • Between two to three decent sized bedrooms (one has 4 bedrooms!)
  • Have a good sized garden
  • Have an good sized kitchen

Our criteria are still pretty broad at this stage in the game but I’m certain that once we’ve seen these places we will continue to narrow down our key requirements.

The first house we are seeing has been owned by the same couple for 50 years! The interior will need some updating and it also has a strange bedroom layout where you have to go through one bedroom to reach the other one.  But it looks great outside and has an absolutely massive garden.

The second house is three bedrooms and the garden backs onto a lovely peaceful river.  Unfortunately it is on a main road and doesn’t have central heating but the house looked nice enough to warrant a look.

The final place is 4 bedrooms (that we could even consider looking at a 4 bed place on our budget is a testament to how much cheaper homes are in this area compared to London).  The interior is… interesting.  Very bright and every room has a different patterned wallpaper but aside from this (and let’s face it, we can always redecorate), it seems to tick all of our boxes.

We still have to wait a week until the viewings which isn’t ideal and we may lose out on them for not being quick enough but even if we only end up viewing one, I think it will be a valuable learning experience.  I feel like I’ve been all talk about buying a house but no action and finally the wheels are being set in motion, it’s all very exciting!

What were your criteria when looking at houses? How many did you view before you knew you’d found the right one? Do you have any viewing tips for these real estate newbies?

We filled a LISA, mini-goal achieved!

I didn’t really know what to post about, afraid that I didn’t have anything interesting to share, but then considering this blog is about our journey to home ownership, this seemed particularly relevant. Sometimes you just have to celebrate the small wins.

When saving up a seriously large amount of money, like a house deposit, you may need to set yourself a few smaller goals along the way.  We achieved one of these today by filling one of our Lifetime ISAs for the year.  For a reminder of what that is, check my previous post on the topic.

This means that in May some time, the government will top whatever is in the account by 25% which is pretty exciting.  There may be a spot of constant balance-checking over that time period!

What next? We’re going to try and fill my husband’s LISA as much as possible before the deadline of the 5th April.  And then we begin saving towards the 2018/19 allowance.

Are we disappointed that we haven’t filled both this year? No! There are loads of people who haven’t even opened a regular savings account. so in that respect we’re ahead of the game.

Have you reached a savings milestone this week?

How we’re saving our house deposit

Hello!

So last week, I dipped my toe into the blogging world and wrote my first post explaining how I wanted to document our journey into home ownership.  For this post I’m going to go into how we’re saving and the reasoning behind it.

The seed is planted (2013-2015)

So I’m not originally from the UK.  I moved to London from New Zealand at the age of 24 intending only to stay for a short amount of time to travel and see more of the world…

Nearly six years later, I’m still here. Married with a child.

The reason I start with that is because while I was travelling and deciding what I wanted to do with my life, I wasn’t terribly good at saving.  Or, I did save, but it was all going towards short-term goals, like affording the next holiday.  I did discover a few Personal Finance (PF) blogs I enjoyed reading such as Mr Money Mustache, Money After Graduation and Making Sense of Cents.

The seed begins to grow (2015-2017)

It wasn’t until early 2015 when we were saving for our wedding later that year that I started saving in earnest.  I also started investing in index funds.  This was after reading a tonne of articles and books about the topic until I felt confident to part with my money (and even then not too sure!).  I found the Monevator blog incredibly helpful, especially since it was UK specific.  I also subscribed to Rockstar Finance to gain the perspective of many other people in similar or better situations.

Our accounts

Stocks and Shares ISA

I first put £150 into a Stocks & Shares ISA (Individual Savings Account) in April 2015 and have been investing monthly ever since.  The monthly amounts have ranged from £50 when times have been tough to £300 when we’ve had enough to do so. We’ve never had a lump sum to put away, the most important thing has been depositing the money and letting it grow. Buy and hold.  It seems to be working so far.

Help to Buy ISA

I first read about these on the Money Saving Expert website.  Basically you can deposit up to £1200 in the first month you open the account and then a maximum of £200 in subsequent months.  The UK government then tops up your contributions by 25% when you buy your first property (as long as you have a minimum of £1600 saved up).  This seems like a great deal however there are terms and conditions to look out for.  Particularly the value of the property you’re buying and whether it is in or out of London.  You also won’t get the bonus to help with the deposit which has thrown a few people.  Still, since opening this account in December 2015 and contributing to it every month, I’m surprised at how quickly our contributions added up.

For more information about H2B ISAs, check out the Moneysaving Expert website

Lifetime ISA

This is a relatively new product launched in the last year.  Anyone aged 18-39 can open a LISA account and contribute up to £4000 in the tax year.  The government will then top this amount up by 25%.  Although it sounds very similar to the H2B ISA above, there are a few key differences.  The money saved in a LISA can only be used to buy your first property or for your retirement otherwise you will be hit by a 25% penalty when you withdraw funds.  You can invest in stocks or cash with the LISA but there aren’t many providers out there and only one who has the cash ISA with a not so great interest rate.  A strategy that many people are employing (ourselves included) is transferring their H2B ISA into a Lifetime ISA as for the first year only, the government will pay the 25% bonus on all of it.

For more information about Lifetime ISAs, check out the Moneysaving Expert website

Our strategy

Currently we have a Stocks & Shares ISA, a cash Lifetime ISA (with our transferred H2B ISA amount) which we just received the very first bonus payment for, and a regular savings account that pays slightly higher interest rate.  We’re hoping to put more money towards our deposit fund in the coming months as I am back at work and that October deadline is rapidly approaching!

I think no matter how you’re saving for a deposit/downpayment for a home, the most important thing is to be consistent with your savings and put something away regularly (we found monthly was best for us as that’s how we’re paid).

How did you end up saving for a deposit or another large purchase?