Reading about the UK housing market is pretty bleak. Compared to the US, or houses are waaaay smaller and waaaay more expensive. I was reading an article last night never getting a mortgage more than twice your annual salary. Erm, yeah, so then we’d need a deposit of about £60,000. Meaning we’d be buying a house in about a decade. Fun times.
Whilst saving for a house on a low budget may seem impossible, it’s not (hopefully!). There’s a government scheme called ‘help-to-buy’. Clearly a lot of thought went into the name. Seriously though, it’s a good scheme. It means that we’d only need a 5% deposit, then we’d get government loan for about £20,000 and a mortgage covering the rest; about 80% of the value of the house.
The awesome thing about the loan is that it’s interest free for the first five years – we’d aim to save that up so we could pay it off painlessly. Then we’d (hopefully) make a load of extra payments on the mortgage and have paid it off in about twelve years. That’s the dream.
Well, the dream is finding £200,000 in my sock drawer, but we’ll call this second best cast scenario.
The main issue we have is actually finding a house. We want to stay in the same area mainly because all the benefits my job has (free food, flexible hours), would be seriously compromised if we moved somewhere where I had to drive to work. I currently live a two minute walk from work, but I’d be willing to up that to 20 minutes. If we moved though, I’d have to get a car and pay for petrol and factor in all those other costs associated with get (another) car.
Houses are not cheap where I live. For an old, 2 bedroom bungalow, we’re talking £200,000. I mean, it’s not London prices or anything. I’m not so disheartened with the prices that I’ve never even thought about buying a house, they’re just more than we can afford. It doesn’t help that Dave was made redundant last year and now has a new job, which is better in many aspects (HE DOESN’T WORK NIGHTS ANYMORE SO I DON’T HAVE TO FEND OFF MURDERERS ALONE YAY), but the pay is much less than we’re used to. What’s so frustrating is that if we’d have wanted to buy a house a couple of years ago, we could have had a nice sized deposit saved but nooo we thought that was a pipe dream.
They’re building some ‘affordable’ housing near us, and we went to the show home of a different development with the same developer (still with me?) and fell in love. The house’s were small but sooo well laid out, with building storage and teeny weeny kitchen that’s more of an alcove than a hall so it still looks bright and airy. It has a garden and heated towel rail. They were pretty much my only criteria. The problem? We can afford the ones a few towns over, but our town is more expensive. Hisssssss. Like forty grand more expensive for the exact same house. Still, these houses are looking to be our best bet, so we’ve had to get our saving shoes on (??)
Another issue we have are housing association houses, which are houses given to low income families. Anyone can get one (obviously the more you need one, the further up the list you’ll be) but you can’t buy them. I don’t disagree with this, because there’s a need for social housing and the government that allowed people to buy their council houses meant that we now have considerably fewer council houses, with as much demand for them as there ever has been. I’m purely being selfish, because the housing association is buying most of the smaller houses, so only the 4 bedroom ones are left. Again, hissssss. Can’t the housing association buy the big houses? I have a friend who’s a single mother in a housing association house and her kids share a room. Give her a bigger house and let first time buyers have all the little ones. Please.
We’re also kind of lucky that we’re not bothered about having a little house forever. Yes, we want a dog, but not kids, so two bedrooms for us is fine. There’s less room to store clutter, make a mess and heat.
You may think that being on a low income is the biggest hurdle you face, but this simply isn’t true. The biggest hurdle is actually putting aside the money, and the lower your income, the bigger the percentage of your pay check you have to save. At the moment, just over half of my income goes into a joint account, which covers all my food and bills apart from my phone bill and dental plan. I aim to pay slightly more than I can afford into my savings plan, because it forces me to become creative. No more late night trips to the Spar to pick up Skittles, Chipsticks and a bottle of wine. If I want something I take the money from the joint account, but then it has to be something both me and Dave can enjoy AND it has to be something we need rather than just something we want.
Man, it’s hard. I’ve always been good with not getting into debt, but I’m not the best at denying myself stuff, possibly because I’ve never needed much. Still, though those £1 lipsticks from MUA add up, and how many lipsticks do I need? I’ve never gone over budget dramatically (without a backup plan) so I often tell myself I deserve a treat. The thing is I could tell myself that till the cows come home, but me deserving a house won’t build up my savings any quicker.
The cold, hard fact of the matter is that we don’t deserve anything, apart from maybe sometimes a short sharp kick in the shin. Now if I want to reward myself, it has to be with something free. My poison of choice? Sitting in the sofa with a blanket and doing eff all. It’s a beautiful, beautiful thing and doesn’t cost you a penny.
We both work pretty much minimum wage jobs in a hostile housing market. Does that put us off? Nah. It gives us a goal to work towards. I’m impatient because I don’t know when we’re going to be able to buy, and I’m one of those people that needs to know. I have a friend on the town council though, who assures me that other developers are building houses soon in our town so finger’s crossed.
So there we have it, how I’m saving for a house on minimum wage. Basically by saving every spare penny I have. I have no budget for socialising (apart from unlimited Cineworld cards that come out of the joint account), I don’t save for expensive makeup anymore. I want to buy a house and that’s what comes first.
It’s actually incredible what you can do to save money. Yesterday,for the first time ever, I only had one shower. Usually I shower before work, and since I work splits, that’s twice. Yesterday however, I hadn’t been tearing around or gone for a run – I’d basically been sat in front a computer, so I just stayed in my work clothes. It was revolutionary.