Struggling for that deposit? Top five tips on how to make your home’s money go further
Getting a deposit together can be hard enough at the best of times – but if you’re experiencing some sort of financial hardship, it can be even more difficult to do. With the average first time buyer deposit in London now standing at over £80,000, it can seem like a mountain to climb no matter where on the ladder you are. However, there are some ways that you can improve your chances of getting there.
Sell to a cash buyer
Cash buyers are often associated in the popular mindset with purchases being made for slightly lower than market prices. For many people, the barrier to getting the deposit together for their next home is that they simply can’t sell – and would happily accept a slightly reduced rate in return for getting a sale through as soon as possible. Say you only need 80% of your home’s equity in order to get your next deposit together, but cannot sell: in that case, holding out for the next time the market turns around is pointless. Getting your hands on your equity now, though, makes much more sense.
Scrimp and save
If you’re out working hard all day, the last thing you want to do when you come home in the evening is pinch pennies. However, it’s worth asking yourself whether treats in the short term, such as takeaways and holidays, are as equal to you in value as the longer-term treat of your dream, forever home. If the latter is true, imposing a strict spending regime on yourself and your family is the right thing to do. It means that you’ll be able to get to where you need to be faster in terms of a deposit, and also have more years of comfortable mortgage repayments.
Add value to your current home
If you’re in a place already, the next thing you need to think about doing is ensuring that you are selling it for the maximum possible price that you can. Sometimes, the way to do this is obvious: knocking down a grotty old outhouse and replacing it with an extension including a kitchen and a conservatory can add plenty of value to a property. If you’re trying to sell a house which doesn’t have an obvious place for an extension, why not think about repainting as much of it as you possibly can? Tearing up carpets and replacing them with hardwood, Karndean or something else is also smart.
But what happens if you live in a flat, or you’ve already extended as far as you can? In that case, you might simply have to get a little more creative. Why not consider moving the layout around so that you have more bedrooms, for example? If you have a large living room and a small kitchen, you may be able to integrate the kitchen into the living room to create a beautiful kitchen diner – while also adding extra room in the space which was formerly occupied by the kitchen, a move well known to boost property prices. It’s also well worth looking into whether or not your lease needs to be extended if you own a leasehold property. In some cases, extending the lease can increase the value of the property significantly, especially if it is close to the so-called “marriage value” cut-off point of 80 years.
Be creative with appearances
It’s worth treating each visit from an estate agent and potential buyer with the same level of seriousness as you might treat a job interview. Dressing up your home in a subtle yet elegant way is a good idea. Other tips include clearing out any front garden or driveway to which the property has access can help give better first impressions, as can cleaning the windows. Taking down family photos is a little-known tip that some people have used to get their house to sell more quickly. There’s an argument that it helps prospective buyers to put their own stamp on the place. All in all, these tips can significantly enhance the chances that you will be able to secure the sale you need.
This often seems like a lot of effort, and it’s true to say that it is – and it can feel frustrating to have to go through these sorts of tasks after a long day at work. However, in the weird and wonderful world of house selling, you often find that the financial ceiling is reached quite quickly and that the only way to break through it and earn as much as you can on your sale is to invest your time, whether that be in DIY or in smaller appearance enhancements.
Get time on your side
Ultimately, if there’s no other solution to the problem, then you need to ensure that you get time on your side. Starting the processes involved as early as possible is necessary: saving up from day one when you decide to move is important. Similarly, ensure whenever you speak to mortgage brokers that you ask them whether adding more years on to a mortgage term affects your affordability status for the better. It may not, but it’s wise to ask.
If you’re attempting to take your first or next step on the property ladder, getting the cash together for that next down payment sure is hard. From using a cash buyer to take advantage of market conditions to adding value to your current home, there are lots of ways to do it – so don’t despair.
Selling your current home is often the biggest stumbling block in the race to get that deposit together for the next place. National Property Trust can help you get the funds you need together by buying from you – in some cases with just a week’s timeframe. Check out more about how we do it here.