My Journey Buying a Property in 2022
This year, I started looking to buy a property in London after saving up a deposit over the last 10 years. As I’m sure you know from my blog, London is my home and a city close to my heart and I’m ready to commit as a homeowner. So far, I have been getting my finances in order to understand what I can afford and attending house viewings to get a sense of my non-negotiables and to really understand what I’m looking for. I wanted to share part of my journey with you as jumping into the property market without much experience can feel quite daunting. Here I will break down my own research on the UK’s housing market in 2022, why it feels like the right time to buy (and how did I know!), what I’m looking for in a property and finally some tips for your own home buying journeys. I hope you find the below content useful and do drop me a comment if you are also on the hunt for a property this year! I really feel the more we can open up the conversation and community around this topic, the better we can support and demystify the process.
UK Property Market in 2022
2022 is set to be a difficult year, with inflation and cost of living up, the prospect of buying in the capital might feel incredibly daunting for many. Within that, there’s good and bad news for buyers in the year ahead which I’ll try to capture here to give you up to date information. This information is from my own research using reliable sources, however, as we have seen from the past two years, while experts can make predications… we really don’t know what might be round the corner! But let’s start with what we do know, Nationwide reported that in 2021 house prices have risen at their fastest annual rate for 17 years. This is due to high demand and low supply. The lender also shared that deposits are constituting a record high percentage of a first-time buyer’s salary alongside the cost of mortgage payments next to take home pay. There is a growing disparity between house price rises and real-time wage increases which is creating a significant gap in the affordability of home ownership. However, it might not all be doom and gloom, as large high street lenders such as Nationwide and Halifax, are predicting that house prices will slow this year. As the affordability gap described above widens, it will reduce activity on the market evening out some of the demand/supply issues that push prices up. So, if you are interested in buying this year, don’t lose hope just yet!
How did I know it was the right time to buy?
Reading the above, you might be thinking what on earth is motivating me to keep going with buying a property this year!? Well, as important as it is to look at the financial situation within the market, I also encourage you to think more about your personal situation and position within that. What factors are impacting you individually and does it feel like the right time? For me, the main motivator is I have now saved a decent deposit which will cover between 40-50% of the total property price. This has been a slow process (it’s 10 years in the making!) but reaching this marker has made me feel more secure in my decision and will also make my monthly mortgage repayments more affordable. Understanding affordability has been key to my journey towards buying a property and there are lots of calculators and tools that can help you understand the repayments you will be making. I really recommend playing around with some figures to help you think in real terms about affordability in relation to your monthly/yearly take-home pay. Through making these calculations, I know I will be paying less in mortgage repayments than if I was paying the average market rent. Plus, my money will be working for me and paying off my home. In addition to my financial position, I have also considered my personal situation as I will be moving in with my partner and we will be a dual income household. Looking at the financial situation with two incomes in mind has also encouraged me as sharing the load on mortgage, bills and even buying furniture has reduced my anxiety around affordability. I know from working out my future joint budget, I can pay back the mortgage, cover bills and still have money to live and a little extra for savings and investments. Understanding my personal financial situation has led me to the decision that is it time to buy.
However, everyone’s situation is different and we all have our own considerations and motivations to take into account. If your financial narrative is not reading like mine, don’t worry! Like I said, it’s taken me 10 years to get here and I’m still on that journey. Go at your own pace and focus on understanding the financial situation that you are working towards to make home ownership a reality. You can also check out my tips at the end of this post which might prompt you to get some extra pounds into that deposit fund.
What am I looking for in a property?
Now that I have my finances in order, I am onto the fun part of viewing properties in my chosen area. Although the right one hasn’t come along just yet – I have been learning plenty in the process! I have a growing list of unexpected non negotiables that I wanted to share with you in case it’s something you might want to add onto your list too…
Space for a home office
Pre-pandemic when I imagined looking for a property, I hadn’t even considered having a space for a home office. But I think it might be on a lot of our lists now! For me, it feels really important to have a separate space to work in that’s not my living room/bedroom so that I can create the necessary separation between work and home. I also really don’t want to be looking at my work stuff during the evening or on the weekend. So, this really is a new must for me! My aim is to use the ‘box room’ or second bedroom as an office with a sofa bed for guests when they stay.
Having always lived in a flat, this was a dream of mine. My own patch of outdoor space that I don’t have to share with anyone and can enjoy my favourite season (summer!) from… heaven! But don’t forget to check what direction your garden is facing when property hunting. You can use the compass app on your phone and for the best sun exposure, you are looking for a south or west facing garden.
Having a large enough living room or kitchen that we can host family or friends in has become super important. I have seen beautiful houses but fitting more than two of us into the space would’ve been tight! I really want more of an opportunity to enjoy our home with others. My partner is also a chef which brings a whole new eye to checking out the kitchen!
Finally, and a complete surprise to me, but I really do want to find a property with a hallway! I’ve viewed a few houses now where the front door opens straight into the living room and it just doesn’t feel right for me. It really has given me a whole new appreciation for that bit of separation to get into the house and then enter the space. It’s something I never thought would’ve been important until it wasn’t there!
My top tips for getting your home ownership journey started
For many of us, the dream of home ownership can feel just that, an unachievable dream. It often feels like we’re seeing more setbacks in the news and with each one, the dream starts to get even further away. So I’ve put together my all action tips to help you to take some positive steps forward. With some careful planning, I really do believe you can do it!
Communicate and Commit
Step one, communicate with others that you would like to own a home and are starting your journey towards this. If you are in a relationship, discuss this desire with your partner and make sure you are both on the same page. It’s not easy, so you will both need to commit to the work of making it happen. If you are doing this solo, vocalise it to friends and family as it will help you to make a firmer commitment, gain support and say no when you need to (important in the savings strategy!).
Understand the numbers
Once you have made the commitment, work out and understand the numbers so you know what you’re working towards. Firstly, look at the house prices in your area/the area you’d like to move to. Next, look at what mortgage you can afford based on your income as this will help you work out what deposit you will need to save. Don’t forget to spend some time playing around with the calculator tools to work out what feels comfortable and affordable to you.
Get a Budget & Savings Strategy Together
Once you have all of the numbers under your belt, you will know exactly what deposit you need to save. Next, we need to get a budget and savings strategy together. Firstly, work out all of your expenses (e.g. rent, bills, food shop, phone contract etc.) and deduct this from your take home pay. With what’s left, allocate an amount for spending and an amount to save – the more you save each month the faster you’ll get to that house so really push yourself here. This will mean making day to day sacrifices, so no more coffees out, packed lunches only, skipping a few pub trips, sticking with your wardrobe as it is, cutting out some holidays, saying no to expensive nights out. I know this sounds hard but it will make such a difference to your deposit saving journey and when you see the numbers going up, you will feel much more satisfied by that than your caramel latte. Always keep some money in your budget for fun because we do still need to enjoy life! But make your fun intentional now, for example, a monthly (instead of weekly!) budgeted meal out or take away for date night. I guarantee that working towards it and the intentionality will help you enjoy it even more than our usual unconscious spending habits.
Look Just Before You’re Financially Ready
I found the last push of saving to be the hardest and it felt like it went on forever. The best tip I can offer you is start to book in some viewings, this will help you to visualise your goal and feel how close it is. It was the last piece of motivation I needed to achieve my deposit goal! You will also learn your non-negotiables through this process so when you are ready, you won’t waste any time on viewings and will know where you want to start!
Go For It
My final tip, wherever you are in this journey, is to go for it and I can’t wait for your dream to become your reality!
Buying a house is a big life and financial decision that shouldn’t be taken lightly. There are lots of considerations to make to understand if it’s the right time for you. I hope this post have given you the space to reflect on your own journey and the next steps you are taking. It can feel incredibly tough especially when we are faced with big numbers that feel unachievable. So break it down – work day to day on refining your budget, month to month getting those savings up and you will get there in the years to come. It really is a process and I encourage you to keep the end goal in sight because it will definitely be worth it once you get there!