Buying a home – when your budget falls short of your dreams

It can be a disappointing time.

Home buying the UK is certainly not as easy as it once was. Although house price growth slowed somewhat at the start of this year the cost of the average home still increased by 4.7% in the 12 months to May 2017. For most people, dream penthouses and country cottages are just that – a dream – and the reality is that you may have to start small and build up or just use your imagination. So how do you deal with it when your budget falls short of your dreams?

Ditch the dreams

Most of us need a lot less than we think we do to make us happy. Dream homes are often a bit of a disappointment – especially if you’ve given up every penny that you earn to pay for them. The reality is that if your budget has fallen short of your dreams it’s not the end of the world, it’s just time to reconsider your dreams.

Establish your dealbreakers

For most people the choice is between either the perfect location or the perfect home. If you’re on a budget then rarely will you find somewhere that exactly meets all your specifications. The way to approach the dilemma is to establish what you can compromise on and what you can’t. Do you absolutely have to be close to transport or in a specific area for schools? Or is it essential to have that third bedroom and a garden? If you can find some wiggle room in your property requirements then you’re likely to have much more to choose from.

Use your imagination

Perhaps the dream home is already complete and interior designed to your exact tastes. But perhaps you could start with something less ideal and aim to create that kind of perfection yourself. If you’re willing to put a bit of work into a property then you can end up with everything. For example, if you buy a ‘project’ property in your ideal place you could end up with the dream home and the dream location. When you’re searching for properties be a bit flexible in terms of what’s there and what’s not. Most buildings can be altered or added to if they’re not in great condition or don’t currently meet your standards – work out the costs of getting you to that dream place and if the budgets work then go for it.

Build your own home

A traditional brick 3-bed house could cost you just $290,000 to build and it’s possible to borrow much of that money upfront, especially if you already own some assets (the land for example) and can rely on secured loans to raise some cash. While that’s just above the average property price it means that you’re getting a dream home in every sense – one built exactly to your specifications. It’s also the cost for a house, not a flat. Opt for a timber framed home and you could reduce this to around $249,000. That’s under $250k for a home that you’ve designed and built to your wildest dreams, whether you want open plan everything or an eco system on the roof.