6 Budget Planning Tips for First Time Buyers

Getting on the property ladder can feel tough and it's easy to make mistakes, but buying your first home might be more achievable than you think. It's all about careful planning. From finding the right location and type of property to setting a realistic budget, every step counts.

The key? Making sure you don't overstretch yourself financially. Buying within your means keeps your first home dream from turning into a financial headache. So, if you're ready to make your first move, here are six practical budgeting tips from The Property Experts to help first-time buyers get started.

6 Tips Every First-Time Buyer Should Know

1. Stop renting

Paying rent every month is almost equal to paying monthly mortgage fees, (and can even be more!) except you're not gaining anything! It can be especially difficult to save a deposit for your new home if you’re paying a large amount of rent each month. If you are willing to give up your own space for roughly six to 12 months while you save money, you are likely to have enough for a deposit and be a homeowner much sooner than if you were trying to save money and pay rent. Moving back home with family may sound like a last resort, but you will be able to save a lot more this way.

If moving in with family is not an option and you must rent, there are ways to work around this so you can still pocket some money for a deposit. You can always find a cheaper place to live, but bear in mind that this may mean a smaller property. You could also consider opting for a house share rather than renting a property of your own to help lower the cost of your rent, giving you extra money to put away for a deposit.

2. Put your savings to work

Why have money sitting in a bank account when you could be earning money on those savings? If you have a decent interest rate, you can reach your savings goal faster, but picking the right account is dependent on how you’re saving.

If you have money to put aside each month and want to set up regular payments, a standard savings account might be your best bet. If you need more flexibility with the amount you put away, for example, if you save in lump sums whenever you can rather than on a fixed schedule, an instant access savings account might be the better option for you.

Read 7 Easy Ways to Save a Deposit for Your First Home

3. Research areas and locations

As a first-time buyer, deciding where to buy your first home is just as important as saving for your deposit. If you haven’t picked the area you want to purchase your new home in yet, do some research to find out what you can afford and if the area fits your lifestyle and needs. You can speak with our friendly team here at The Property Experts to help guide your choice, but ultimately you will need to determine which areas fit your budget before anything else.

Be sure to research prices for the type of property you want to buy, as well as council tax and any other costs that need to be factored in such as travel or parking fees for example. Once you have an idea of what the cost of your property will be, both when purchasing and when actually living there, you can start to budget and save for a specific goal.

4. Budget for your monthly mortgage payments

Getting a mortgage means you will be required to pay a monthly amount to your lender to cover the amount you have borrowed, so it's vital you speak with a lender or financial adviser to ensure affordability. Our sister company, The Mortgage Experts will be delighted to assist with this - simply speak with us for details.

5. Budget for other home-buying costs

There are more costs to consider once you’ve had an offer accepted on your first home, so you should make sure your budgeting plan includes enough to take care of these when you complete on your first property. Ensure you have enough saved so you can comfortably cover your mortgage payments without financial stress.

These other costs can include:

• Solicitor fees

• Survey costs

• Mortgage arrangement costs

• Estate agent fees

• Buildings and contents insurance

• Furniture and decorating requirements

• Necessary renovations or maintenance

6. Take advantage of 'help' schemes

The government’s Mortgage Guarantee Scheme was originally scheduled to end on 31 December 2022, but has been extended until June 2025. It was introduced to increase the supply of 95% loan to value (LTV) mortgages and to make them cheaper.

This scheme sees the government guarantee part of the mortgage, so making it less risky for the lender. The guarantee also compensates mortgage lenders for a portion of any net losses suffered if the property is repossessed at any time.

A 5% deposit and a mortgage with a participating lender is required to use the Mortgage Guarantee Scheme. The property being purchased must also be £600,000 or less.

Current lenders participating in this scheme include Royal Bank of Scotland, Natwest, Barclays, Lloyds and Halifax. We have access to over 12,000 mortgage products from 90+ lenders and can help find the right deal for you!

Let Us Help You Find Your Dream Home

We hope you find these six first time buyer budgeting tips helpful. For further no-obligation expert advice please contact the team at The Property Experts on 0330 179 8180 and we will be delighted to assist you.

Find a property expert here.

Frequently Asked Questions About Buying Your First Home

Can I use any bank account to save my deposit?

The best account depends on how you save. Regular savers might benefit from a traditional account, while those saving in lump sums might prefer an easy-access option. Talk to your bank about the best fit for you.

Should I get a mortgage pre-approval before looking for a property?

Absolutely! Knowing your budget beforehand allows you to focus on realistic options. We have access to over 12,000 mortgage products from 90+ lenders and can help find the right mortgage for you.

Has anything replaced the Help to Buy scheme for first-time buyers?

There are other government programs and mortgage products available. It's wise to explore all options with a mortgage lender to find the best fit for your financial situation.