Getting onto that first step of the property ladder is difficult for many young people and finding a house which is both affordable and in a good location can be hard.
In London, many young people are finding it harder and harder to get onto the property ladder.
The average property in London is £400,000 whereas the average wage (according to the Office of National Statistics for 2011-12) is £23,800.
According to Shelter, the average Londoner spends 59% of their income on their rent, which is no surprise given how much places to stay cost. According to the Totally Money affordability tool, you would need to save at least £1,186 per month for 12 years and five months to be able to save up a deposit to live in Greater London.
However, if you chose to live slightly outside of London and commute in, then somewhere like Hertfordshire may be more affordable.
According to the Totally Money tool, if you could afford to save the same £1,186 per month then it would take you three years and four months to save for a housing deposit here.
Saving up enough money for a housing deposit may seem like a mammoth task, but there are ways which you can look into that may help.
One of the most important things you need to do is look into how much it will cost you to live in the area you want.
You need to know roughly how much of a deposit you will need and you also need to think about other costs such as stamp duty and if you will need to do any work on your house.
By looking at your budget you will be able to see if there is anything you are spending money on which you don’t really need.
If you can, why not move back in with your parents so you can save the money you would have spent on renting?
If this isn’t an option, you could always downsize the place you are renting or consider moving into a share house.
As the cost of housing changes constantly, even in a short amount of time, it’s worth being patient and flexible with your saving plan.
You may be able to put a deposit down sooner or later than planned, so it’s worth keeping an eye on the housing market.
Getting onto the property ladder may seem easier said than done, but with careful planning and managing your money it may not take that long.
Looking at mortgage calculators like the Money Saving Expert one or the one from the BBC may also help you know how much you need to be saving each month in order to be able to afford the property you are wanting to buy.
Picture courtesy of Images_of_Money, with thanks
