Saving Wisely Could Help In First Home Purchase

Worries about money are putting off significant numbers of Britons from taking their initial steps on to the property ladder, new research shows.

In a study carried out by Abbey Mortgages, it was revealed that 1.1 million consumers – about 67 per cent of all first-time buyers – are delaying making such a purchase for at least 12 months. These people were revealed to currently have a total of 31 billion pounds in deposits.

It was revealed that at present house price growth stands at 1.1 per cent, while the typical high interest savings account has an interest rate of 6.5 per cent. By opting to invest the average deposit of 28,000 pounds, it was stated that over the course of 12 months Britons could generate an additional 1,820 pounds in interest. Consequently the financial services firm pointed out, by investing this money into competitive savings that prospective homeowners will be able to increase the amount of money they can place on their downpayment for a property.

And in having a larger deposit to put down on a home, consumers may find that they are able to manage mortgage costs and various property-related expenses with greater ease. In turn, this may mean that they are able to meet other monetary demands such as loans, repayments on plastic cards and household bills more effectively.

Commenting on the figures, Phil Cliff, director for Abbey Mortgages, advised that “those delaying purchasing a home would benefit greatly from moving their deposits into high interest saving accounts”.

Meanwhile, earlier research carried out by Abbey indicates that just under three-quarters (74 per cent) of first-time buyers cite concerns about house prices and the state of the economy as their reasons for putting off getting a home. In addition, 67 per cent of consumers think that their finances are currently under too much pressure to allow them to take their steps on the property ladder.

For consumers worried about their capacity to put money into savings accounts, taking out a cheap loan might prove to be of assistance. Although this may represent another area of financial demand, by using a loan as a means of debt consolidation, borrowers may find that they are able to merge numerous constraints on their spending into a single low-cost affordable monthly repayment. This could leave them with more disposable income on a regular basis, money which could then be invested in a savings account that has a high rate of interest attached to it.

Indeed, getting a consolidation loan could be advisable for a significant number of Britons. Released last month, data from the Post Office reveals 4.8 million adults state that a rise in living costs has meant they have been unable to put cash into savings accounts. The financial provider also showed that 43 per cent of consumers either stopped or reduced their level of saving as last year’s festive season approached. Meanwhile, about one in five claim they are not putting cash aside for later life due to a lack of disposable income.

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