How to get a deposit for a first home

Some hints and tips to inspire first time buyers

Ask any aspiring first time buyer what the biggest hurdle to buying their starter home is and they will tell you it is saving up for the deposit. The average deposit need for a first-time buyer house in Northern Ireland is an eye-watering £30,435. With property prices on the increase it may seem like the dream of owning your first home is moving ever increasingly out of reach. Helpfully we have decided to provide you with some tips that may help make that dream a reality.

Move back in with the parents

Housing rents are far in excess of monthly mortgage repayments right now. Every pound you give to your landlord is a pound less saved towards your deposit. It makes perfect sense then to move back home and put what you would have spent on rent into the bank at the end of each month. The average rent here is £629 per month. Over the course of a year that is a not inconsiderable sum of £7,548. In addition you may be able to save on food, utilities, etc.

The Bank of Mum and Dad

Yes this is only available to the privileged and is unfair on those more disadvantaged but the majority of first time buyers are getting gifts to help with the deposit. Your lender will require your parents to sign a gift waiver, often with independent legal advice. One thing to be wary about, if your parents die within seven years of making the gift to you its value may still be counted towards the inheritance tax liability.

Move somewhere else

If you don’t mind a bit of a commute to work you will find that the property values vary wildly in Northern Ireland, as they say, “location, location, location”. Moving from Belfast into the commuter belt or from one county to another can get you similar properties at a fraction of the cost. This will help knock a big chunk off of your deposit.

Get a Help to Buy ISA

Don’t just save, get the government’s help. If you open up one of these ISAs (available at almost all of the high street banks) the government will boost your savings by 25%. The maximum bonus you can get is £3,000 per saver. So if you and your partner are purchasing together you could conceivable get a bonus of £6,000 between you. There is a lot of small print so make sure you take time to apprise yourself of the terms before getting involved.

Buy with Northern Ireland Co-Ownership Housing

This is a not for profit organisation with the sole purpose of making housing more affordable. In very broad terms you buy between 50% and 90% of the home you want and they buy the remaining share. You pay rent on the share that you do not own. You can then buy more shares in your property as the years go by. What this does is vastly decrease the size of the deposit you need (by up to 50%) so it is not to be sniffed at.

If you would like advice in relation to any issue regarding the purchase of a first home please give us a call on 02891 817715 or contact our property team by email at property@boydricesolicitors.com.