Buying your own home can be a daunting prospect, especially when you don’t have someone to split the costs with. But while most advice around getting on the property ladder seems geared towards couples, what is it really like if you’re not buying with a partner, friend or family member – especially during a pandemic-induced recession – and how can you go it alone?
To find out, we asked three women on various stages of the journey to share their solo saving dilemmas, and put them to personal finance guru Kia Commodore to see how they could take that first step onto the property ladder.
1. “I’d struggle to get a mortgage with my single salary”
Isabella, 28, feels the possibility of securing a mortgage is out of reach.
“I’ve been single for nearly six years and, as a journalist, my wage isn’t exactly on par with a pro footballer.
“I’m about to apply for a mortgage, but I’m worried that I could struggle to borrow enough money with my single income, as lenders will only give you about four times your salary.
“I've tried every trick in the book to maximise my income and my savings, but even though I’ve managed to build up a healthy deposit, will I be able to afford more than a fixer-upper?”
Kia says: “The amount that you could borrow for your mortgage is a combination of your salary plus however much you’ve saved for your deposit, which is usually around 10-20% of the property price. If you’re unable to get the mortgage amount necessary for your desired home, then you may have to adjust your expectations.
“Try searching within surrounding areas for houses that fall more into the budget that you have for your mortgage. Using property search websites and looking for ‘sold’ or ‘completed’ listings will give you the best idea of what’s attainable.”
2. “I have to clear my debts before I can save up”
Cheri, 29, has struggled to save for a deposit on her own.
“I haven’t been in a position to apply for a mortgage yet. I’ve supported myself since I moved out of my parents’ house when I was 18, and as I’ve never lived with a partner and been able to split bills, it’s been really hard to save anywhere near enough money for a deposit.
“I’m really hoping that now I’m part of the Cosmopolitan Home Made house I’ll be able to pay off most of my credit card debt and actually start putting money aside for a house deposit.”
Kia says: “Remember that saving is a marathon, not a sprint. While it can seem daunting to save for a deposit while tackling your debts, a great place to start is to see where you could make savings on your bills. Many people are overpaying, so visit comparison sites to see if you could switch your energy tariff to a cheaper one, or try to haggle a better discount on your phone contract.
“When you’re ready to put some money aside, work out a monthly amount you can afford to save based on your income, no matter how small. As and when your income goes up, increase the amount that you put into savings. All of these savings could go towards your deposit and paying off your debts.”
NatWest customers can try setting a Savings Goal in the mobile app*, where you can check your progress daily and see how close you are to meeting your target. On average, people save twice as much with a goal in mind, so set your intention asap.
3. “I need to work for a few more years before applying for a mortgage”
Layla, 25, is worried about applying for a mortgage with no steady income.
“I’ve been saving for a deposit for the last year, but I know that to get a mortgage as a single freelancer is so much harder because I don’t have a steady income. I can’t even approach a bank for a mortgage until I’ve been filing freelance tax returns for longer. Even then, I’m not sure if I can pull together enough of a deposit on my own.”
Kia says: “The typical number of years of tax returns that banks require to offer you a mortgage is two-to-three years’ worth, though some lenders may still consider you as long as you have at least six months’ worth of accounts.
“Look for a mortgage broker who could help you to find the deals best suited to your situation. Being accepted for a mortgage while self-employed could be challenging, but it’s not impossible.”
Looking to buy your own home? Save for your financial goals with NatWest. Find out how you could meet your targets with a NatWest Financial Health Check
*App available to customers aged 11+ with compatible iOS and Android devices and a UK or international mobile number in specific countries. Savings Goals only available with Instant Access savings accounts.
