March 20th 2019
Investment Services
It is an unfortunate sign of the times that banks and building societies are more cautious about lending money. So, the larger the sum you have for a deposit, the lower the risk you will be considered, which means you will have access to a wider range of lenders and deals. However, it is not just the deposit you need to consider – you will have other costs, such as stamp duty and legal fees.
Saving a regular amount each month (the more the better) will put you in good position for generating your nest egg. Once you start saving, you will need to decide upon the best home for your money. This will depend on when you are hoping to get onto the property ladder. Short-term savings options include regular savings accounts and easy access accounts, although neither generally offers very good interest rates. Most first-time buyers will need to save for several years in order to build up a deposit, which is why medium or long term savings vehicles are usually the way to go. One of the most flexible and tax-efficient ways to save is by utilising your annual ISA allowance, which is currently £20,000. Cash ISAs are a safe home for your money, with the potential for generating interest over the longer term, which will be tax free. Investing in a stocks and shares ISA offers the potential for greater returns but has the element of risk involved with investing in the stock market.
However you choose to save, the key to building up enough to buy your first home is to start putting as much money away as you can, as soon as you can. If you would like to talk to us about ISAs or any other aspect of your finances, please get in touch on 01934 875919.
