You've probably heard it said many times, but it's none the less true: buying a house is the biggest financial commitment you're ever likely to make.
Whether you're getting a first foot on the property ladder, moving to a bigger home or even downsizing, you should start to plan your move as early as possible, especially if you're saving for a deposit. There's more to think about than just the mortgage!
The first thing you'll need to think about is how much your new home will cost. Maybe you've already got a property in mind and know your budget – but if not, bear this in mind:
The average house price for a first time buyer typically stands at around £219,000.
Most mortgage lenders will be looking for a deposit of about 10% of the purchase price. Of course, there will be other fees and expenses to think about, too. It's easy to underestimate these, so here's a rough guide:
|What you need to pay for||How much it might cost (these may vary)|
|Legal fees||Can be between £750 and £1,800|
|Stamp duty||Doesn't apply for houses that cost under £125,000. Rates start at 2% of the purchase price for houses that cost more than this.|
|Estate agent fees (if you're also selling a house)||Typically 1-3% of the price you receive, Plus VAT (at 20%).|
|Removal costs||Varies according to house size – or you could possibly do it yourself.|
|Survey||Range from a basic one at £250 to a full structural survey from £600 or more.|
|Lender's valuation fees||From £150 to £1,500 based on the property's value|
Your savings and investment options
If you have a home to sell, you may have equity (built-up value) which could cover your deposit and some or all of the cost of the move itself. If not, you should think how long it will take to save the money you'll need. It's important to make sure your money is working hard for you.
Think about how soon you're planning on buying your new home. This will be one of the considerations which will help you decide the type of savings or investment plan that will best suit your needs.
By following the links below you can find information on some of the savings and investment options which Aviva can offer you.
A cash ISA
If you're saving for a move in the short term – up to four years perhaps – you may wish to consider using a cash ISA to save a regular amount without paying tax on the interest you'll earn. Please bear in mind that Aviva doesn't currently offer a cash ISA.
Stocks and shares ISAs
Maybe you’re thinking further ahead and wish to invest in the stock market. If so, you may wish to consider investing in a stocks and shares ISA. You’ll need to carefully consider the risks and benefits. Find out more about Aviva’s ISA.
We can help you with details on these and other savings or investment options. What's the right savings or investment option for me?
The sooner you start, the better
Even if you can only afford to put aside a small amount each month, it’s well worth getting into the habit of regular saving or investing when you’re trying to build a deposit for a new home. The sooner you can make a start, the quicker you could reach your goal. If you’re unsure how much you could afford to put aside regularly, My budget planner might help you. It demonstrates how much you may be able to afford to save and shows typical regular expenses to see where you could reduce your spending.