So You Want To Buy A House, But You Have No Money

photographed by Meg O'Donnell.
It’s no secret that millennials have been hit hard by the housing crisis. While many of our parents were scaling the property ladder by their mid-20s, young people today are struggling against the meteoric rental prices and stagnating real-wage growth that halt our hopes of homeownership in their tracks. With the average London tenant spending a staggering 49% of their income on rent, and headlines bemoaning the desperate state of the housing market at every turn, a white picket fence property – or at the very least, a one-bed flat with decent lighting and tolerable transport links – seems a distant dream.
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If you’re longing to own a home but your finances are more small-room-in-a-houseshare than a place to call your own, don’t be dissuaded. As far away as a first mortgage payment may seem, there are plenty of ways you can lay the groundwork for a future purchase – starting now.
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Learn to budget

Learn to budget

Before you even start to save it’s crucial to get a grasp on your spending. Make a budget tracker to categorise where your money goes and then calculate where you can make cuts. Banks like Monzo that prioritise managing your money and sticking to spending targets can be a great way to get a more realistic idea of how much you can actually afford to stow away.

"I did a big spreadsheet mapping out how much money I needed to save each month and put the remaining amount on my Monzo card and reasoned once it was gone that was it," says Johanna, a teacher from London who recently purchased a house in Kent. "Once you have a limited amount to play with, you become a lot more conscious about where the money goes. I started trying to do lots of things in a thriftier way, so I cycled more, spent less on coffee and makeup, and had friends around the house instead of going out."
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Which life changes won't you make?

Think about which life changes you’re prepared to make… and which you’re not

If you find that sacrificing your daily Starbucks isn’t quite going to cut it when it comes to scraping together a deposit, then some bigger adjustments might be in order. Thinking about what you’re prepared to give up to make your homeownership dream a reality is a challenging but important step. Is moving home with your parents an option while you save? Can you relocate to a cheaper rental and stash the spare cash in your future house fund? Would you consider a more lucrative career or taking on a side-hustle? The answer to these questions doesn’t have to be yes, but it’s worth thinking honestly about which aspects of your current earning and spending habits are non-negotiable and where you might be prepared to be more flexible.
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Take saving seriously

Take saving seriously

Once you have a good grasp on your budget it’s time to start a stash – and keep it stashed. Although I myself am guilty of starting saving only to reason that it’s just as important to have an emergency ASOS fund to be dipped into after a bad day, it’s key to break the bad habit of filing away spare cash one month only to withdraw it when running low the next.

"I managed to start saving from scratch by working out my cost of living then limiting how much I spent each month strictly to that amount," says Nathan, an auditor who bought a house in Nottinghamshire at the age of 27. "By enforcing this strictly I was able to build up enough money for a deposit. When there were unavoidable costs I allowed myself to spend cash I would have normally saved but crucially, I never took already saved money back out and spent it – I think that’s the critical point a lot of people miss."
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Find out where you can afford to buy

Research where you can afford to buy

As Kirstie and Phil would tell us, it’s all about location, location, location – but that sky-high city centre apartment will come with a price-tag to match. As wistfully as you might be eyeing up a double-fronted townhouse, you may need to cast your net a little wider before you’re collecting the keys for your own place. Once you have a rough idea of your budget, do some deep delving into where you can afford to buy and where it is realistic for you to move to. Are you able to commute? Is working from home an option if you’re no longer within daily driving distance of the office? Could you see yourself in a completely different part of the UK? Getting an idea of what kind of move is feasible for you will help you figure out what deposit you need to aim for.
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Research help-to-buy

Look into what help-to-buy options are available

The good news when it comes to struggling to save is that you are not alone. The government offers a number of affordable homeownership schemes for certain properties, such as shared ownership or Help to Buy ISAs that top up your nest egg by up to £3,000. Although handy, it’s important to thoroughly research what schemes you are eligible for: "I opened up an ISA a few years ago which can be really helpful, but I fell victim to its cap on properties outside of London and so was unable to claim the maximum 25% on top," says Johanna. "When I signed up to it I had no idea it was a thing, so it’s worth keeping an eye on. It’s still a good way to save though, and the interest was decent."
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Get your finances straight

Get your finances straight

Mortgage lenders will look at a range of factors when considering an application, so start early to ensure that you’re squeaky clean and avoid rejection when the time comes. Demonstrate that you are reliable in advance by paying off outstanding debts, getting on the electoral roll, closing down any credit cards you are no longer using, and building a good credit history. Keep in mind that if you won’t be able to supply an employer reference then you’ll need to present a solid account history, so start compiling this well in advance.

Meeting with a mortgage advisor might seem scary so early on in your search, but this is actually the perfect time to ask any questions about saving, get a rough idea of what you will eventually be able to afford, and find out how to get mortgage-ready.

Even if you’re only just transferring the first tenner into a savings account, give yourself a pat on the back – buying a house in the current economic climate is a battle, and young people are a few men (and a colossal amount of money) down. And if you’re not ready? Buy the bloody Starbucks and stick to your avocados – homeownership is hard. Don’t feel bad if you’re not quite there.
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