With the costs of home ownership in the UK rising, saving for that elusive deposit becomes that little bit harder. That said, with the right savings products in place that takes advantage of tax efficiency, you could be on the property ladder sooner than you think.
According to a new figures released by Shelter, the cost of the first-time buyer deposit is set to hit £46,000 in 2020, when it is expected the average UK home will rise to £270,000. Right now the average cost of a UK home is £220,000. Predictably, in London, where housing costs are greater, the first-time buyer is looking at an average deposit of £106,000 in 2020. If Shelter’s figures are correct the average cost of a London home will be £558,000 in 2020. Right now it is £419,000.
Importance of a Tax Efficient Savings Plan
Putting together sums of around £46,000 or greater is difficult. Just when you thought things could not get any gloomier, tax rears its ugly head and bites you. The more you save towards your first home, the harder tax becomes to avoid. It normally kicks in when you save above certain amounts, and without expert financial advice you could find that by the time you hit £46,000 for the first deposit, the amount has risen and you need to save that little bit more.
The bottom line is that tax will make saving that little bit more difficult. Tax efficient savings products, however, will minimise the amount you lose in tax. This could shave months off saving for a deposit possibly years if your savings products are not tax efficient.
Getting Around Taxation on First-Time Buyer Deposit Savings
To combat the tax problem we have a dedicated mortgage section which can help you come to grips with tax efficient savings. They can look at the best savings products and help you secure that deposit more quickly. Meaning you could be a home owner faster. This is much more preferable than stumbling blind paying out more tax than you should.
In a survey by HSBC they have discovered that most people spend 26 hours to make an offer on a house. It would be a good idea for you not to take that long when deciding to take advantage of sound financial planning advice and start putting in place the most efficient savings plan when buying your first home.
Click here and complete the Call Back Service form. Move into your first home that little bit faster.
Source: Mail Online