How do people save a mortgage deposit?

[Bananapuppy]

Exactly that- any advice welcome please!
Three children and associated childcare costs, renting, two incomes but at the lower end of the salary scale (£27K & £20K). We just don’t seem to have any money to save and we’re desperate to buy our own home.
All the very helpful advice online suggests not drinking (we don’t), not going on holiday (again, we don’t), not having an expensive car (you get the picture…). Basically, a whole range of cuts to luxuries which are out of our means anyway.
Any tips on real-life savings/ mortgage planning would be so gratefully received.

I will just add, in anticipation of the comments, that this isn’t simply a case of hideously bad life planning. I met my exH at 16 and spent 10 years in an awfully abusive relationship.
I left at 26 with nothing, but now 4 years on have a lovely DP, secure job, and am trying to get my life in order. Buying a house is the next sensible (yet seemingly out of reach) step.

Could one of you train to a higher earning career? Realistically with 3 kids on those incomes unless you're aiming somewhere in the country that's very cheap it's tricky to see it happening.

The only way I managed it was a small inheritance, there’s no realistic way I’d have saved it myself.

I know that doesn’t help, but I say it from the stance of recognising that it’s so incredibly difficult for anyone to realistically save the amount needed for a deposit in normal circumstances, and you’re not alone in that OP

I think if you've already got kids you won't pass the affordability criteria unless you're really high earners. What sort of income are you talking about?

Sorry just seen salaries

As per previous posters the only thing I can see that is within your control is to train for a better paid job as what people do is:

Delay having kids
Live in really small places
Live with parents
Inherit

None of which you can do. You are in a better place than some because there are two of you (much harder for individuals) but retraining for a higher paying career may be the only way

I don't know anyone who didn't have help, either by getting cash or living at home due free to save.

We didn’t get our first home until mid to late 30s. Lots of really hard work and scrimping and saving.

@sparemonitor I’m actually completing an MEng at the moment (part time though as I work full time), but realistically even once I finish, with no experience I will be starting from the bottom. (I’m currently the slightly higher earner anyway).

Thank you for sharing that @LawnFever. It just feels impossible!

Hi @ThisIsStartingToBoreMe; according to the bank, we would, despite the smaller incomes (they’re in the OP), but we need to save the deposit. We don’t need a massive house, and live in a fairly cheap area -or at least it was, it seems to be skyrocketing at the moment! We’d be happy with a tiny project house, just a foot on the ladder.

You sound like you are taking the right steps OP. Banks will lend for longer now as people retire later so you still have time. Don’t give up and you will get there.

For people in your situation with no excess income to save then it’s bank of mum and dad and/or inheritance. Plenty of people rent their whole lives, it’s not a matter of shame nor does it say anything about you as people. It is what it is. If you are happy in every other aspect of your life then cut yourself some slack and enjoy it!

Thanks @Trisolaris- I guess it will be a case of playing the (very) long game.

@wowhie Thank you - close friends with mortgages have only managed with financial help from families. It’s not an option for us but I’m determined that we’ll manage one day!

Thats fab @Poorlykitten. Do you have any tips on what to scrimp on?

Both of us hand second or third jobs in addition to our full time job. But that’s not an option when you have family and are studying.

Sorry but you will struggle in your circumstances. I would say a mortgage likely to be unachievable.

As my granny used to say you pay your money and you take your chances.

You have 3 children which are expensive on low salaries.

How did I save a deposit?
-I chose to delay children
-lived in cheap communal accommodation

• didn't buy any clothes full price
• didnt go on holiday
• put my time and energy into progressing my career

-moved back with my parents for a year to gice my deposit "the final push"

• bought in a fairly undesirable property/area and sacrificed privacy and by renting my second room to a lodger.
• had several "side hustles", buying and reselling

A lot of these won't be open to you due to having kids.
You should be looking at how to bring in additional money and how to invest /maximise your savings (s&s ISA possibly LISA)

We were similar OP, no cuts to be made and 9/10 were in our overdrafts by the end of the month.

We only managed to buy last year as my DGM gave me 4k that I put in a help to buy isa, and DP coincidentally got a PPI payout. We never would have managed otherwise.

I saved for a house before I even considered children. But i only had moving and solicitors costs as it was when you could get 100% mortgages. We have recently moved to a much bigger house because we made the decision not to have a third. I would not have been able to save enough to buy a house after having children.

Ive known people get extra jobs and save that money.

I know quite a few people who put off having dc to get on the ladder. They bought a house, had dc but can't afford to move up the ladder. The market is very distorted.

How much of a deposit will you need? I mean what’s the minimum for the mortgage you would be able to get (plus costs)

I managed to save for a deposit as a single mum on a low income, only using a high risk investing strategy. I wouldn't recommend it due to risk, it was essentially a lottery win in terms of luck. Also my flat was a council RTB so I got a big discount off the price.

Since you live in an area where housing is reasonably priced (lucky you!), the deposit presumably will also be modest? In that case once you are earning a bit more and your childcare costs reduce, it might be possible.

You've already achieved a lot, so I think you can do this too.

Can you get another job?

How much of a deposit do you need realistically?

It certainly isn't easy after you've got kids. The only way we did it was by living in a crappy studio flat to keep our outgoings as low as possible and saving every penny, which isn't easy to do once there are kids and all their associated costs in the picture.

DH and I bought our house when I was 29 and him 30. But the majority of the deposit came from me. So my salary for most of my 20s was mid 20s with bonuses. Some of the things I did:

I saved all my bonuses (actually about 50% of my pay pack)

dh and I a cheap 1bed flat,
economised with cheaper hols (once a year),
I did tutoring outside of work which is quite profitable if there’s anything you could tutor (charged about £25 per hour)
Realistically this was all made possible by the fact we hadn’t had kids yet.
We used the HTB equity loan to bolster our deposit as where we live is quite pricey.

Would you consider shared ownership to get on the property ladder?

If your life is fulfilling and manageable right now why do you need to be climbing any ladders? Especially if your efforts to climb said ladder compromise your quality of life.

Spending your life desperately trying to clamber onto/up the property ladder doesn't extend your life. There's no bonus prize at the top where you get extra time on earth to compensate for all the living you missed out on in your quest.

It's a bit sad to spend that life beating yourself up for not achieving xyz goals and always deferring your happiness into the future with "when I have a house, then I'll be happy...".

Just an observation because you write like you feel you're losing some kind of race, but life isn't a race. It's a series of moments. You also deserve to give yourself credit for exiting an abusive situation rather than beating yourself up over it leaving you behind in this imagined race (although I do understand the very real and valid grief for what the abuse will have lost you - I don't want you to feel I am belittling that, I'm not).

As to your question, you've shared income levels but not the size of deposit you'd be aiming for in your area and for the level of mortgage you'd need/accept. Ultimately, saving is patience and luck.

It’s so hard once you’ve got kids and are paying rent. My brother is in exactly the same position. We bought our first house with a 100% mortgage before we got married and had kids. We’ve got a good income now, but there is no way we could afford to save enough to buy the house we currently live in if we were paying rent.