Amid rising house prices, affordability continues to be a challenge for prospective homeowners – so much so that around 62% of first-time buyers are choosing a mortgage term of 30 years or more for more manageable monthly repayments.
Carefully considered financial planning and clear savings goals are essential planning to helping you understand what you can reasonably afford. This informational guide explores how you can budget effectively and factor in the long-term financial commitments of homeownership with confidence.
Please note that this blog is for general information only and does not constitute financial advice. Your circumstances may differ, so consider seeking guidance from a qualified financial adviser before making financial or borrowing decisions.
Five examples of homeownership preparation for new buyers
Approaching a financial adviser in the first instance
Speaking to a qualified, regulated financial adviser can help you understand your options and check whether your financial plans are realistic for your circumstances. They can review your budget, savings goals and borrowing needs, then highlight costs or considerations you may have overlooked. For questions about contracts or other legal matters, it’s best practice to speak to a qualified solicitor or licensed conveyancer before acting.
Budgeting clearly for the upfront costs
Most buyers don’t have an endless pot of cash to pull from once they find a home and want to make an offer. Establishing an approximate budget before you begin the search will help you navigate the housing market with clarity around what you can afford. An easy way to start calculating your budget is to define your deposit contribution and then add the other costs you’re likely to incur when you buy a property. Several additional expenses to consider include:
Conveyancing costs: The legal work that transfers the property into your name, plus searches and Land Registry charges.
An independent property survey : An independent check of the property’s condition. A more detailed survey can cost more, but it may reveal repairs before you commit.
Mortgage charges : Which can include arrangement or product fees, valuation fees and possible broker costs.
Property tax: Stamp Duty Land Tax applies in England and Northern Ireland, with different systems in Scotland and Wales. Check the current rules for first-time buyers.
Insurance: Your lender will usually require buildings insurance from exchange of contracts.
Look ahead to the first year in your new home
The cost of owning a home goes beyond the price of the property and a possible mortgage. Monthly expenses include utility bills, council tax and financed purchases, and lifestyle spend also needs factoring in. During the first year, you may need to make repairs and renovations in addition to these consistent costs. If you’re buying a leasehold home, remember to include annual service charges and ground rent in your calculations where applicable.
Look at your current bank statements and outgoings to understand what you could realistically put towards living expenses. Your financial paper trail is a helpful tool for making an educated guess at what you might need to earn or have put aside before you buy your first home. Like mortgages, long-term loans with fixed repayments can help to make wider homeownership costs more manageable, but you should consider carefully what’s realistically affordable.
Build a buffer for if the unexpected happens
You never know when a broken appliance or urgent home repair will crop up. Keeping a separate emergency fund from your deposit and moving pot gives you a safety net when the unexpected happens. While any amount helps, MoneyHelper suggests saving the equivalent of around three to six months of essential outgoings in an instant-access savings account. Set a realistic first target and add to it regularly.
Consider the practical costs of moving
The cost of moving usually depends on three things: where you’re moving to, the distance of your new home from where you currently are, and how much of your belongings need transporting. If you decide to use a removal company, it’s worth getting approximate written quotes from the company early and determining what services are included. That way, you won’t be surprised by any added charges for things like packing materials and temporary storage.
Final takeaways to help you move forward with confidence
Buying your first home can feel like a big financial step, but a clear plan can make the process more manageable. Start early, account for both upfront and ongoing costs, and keep your budget up to date as quotes and bills become clearer. Building an emergency buffer and seeking qualified financial or legal guidance when you need it can also help you make informed decisions. With realistic figures and room to adapt, you can approach your move with more confidence and begin life in your new home on firmer financial ground.
