Early planning is good, but it’s also worth considering the things that might affect your savings between now and the time you’ll be buying, especially if you have a few years to go.
Here are some things to consider when creating your long-term savings plan and working out how much you really need to save.
Rising house prices
It sounds obvious, but the house you’re saving for in 2018 probably won’t cost the same in 2028. But how different could it potentially be? In April 2018, the average price of a property in the UK was £226,906, following a 24% rise in property prices between 2008-2018. Assuming the same increase happened over the next ten years, the average price of a house in the UK in ten years’ time would be £332,661.
If the price of your dream house goes up, the amount of the deposit you have to pay might go up too. For example, if a house costs £120,000 in 2018 and the deposit is 10%, you’ll need to save £12,000. If the house price rises to £148,800 over the space of ten years (assuming that 24% increase again), the 10% deposit becomes £14,880, which is an extra £2,880 you’ll need to find. Other costs involved in buying a house will also have an impact, so the overall cost could be even more.
Be a smart saver
Saving for a deposit can be hard enough without trying to predict the future. But with a bit of careful planning and a proactive approach to saving, it can be easier to achieve your goals. Getting into good savings habits early on can really help. For example, if you get pay rises over the years you could factor them into your savings.
If you’d like some help sorting out your savings – get in touch. We’ve been helping people save money and buy homes since 1853, and we’re here to help you too.
You can talk to us on 0345 850 1722
Try our savings calculator
Whether you’ve had a look at our range of savings accounts and have one in mind, or you already have an account with us, you can use this calculator to see whether you're on track to save the deposit you need for your first home.
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