Saving for a property

Generally speaking, property has always been a good place to invest. In pretty much every case – under normal financial conditions – property prices only go one way, up. Even at the darkest depths of recession in 2009 there were still areas of growth.

However, property should be looked at as a long-term investment, but if you are buying for yourself, it should also be a place where you will want to spend time. Therefore there is a trade off between buying a property that will make you lots of money when your circumstances change and you want to sell, and a property that you want to live in now.

Buying a property is expensive. From legal fees to taxes and the inevitable DIY jobs that didn't come up in the survey, you need several thousand pounds in the bank before you can make your move. For most people, especially first time buyers, saving up enough money to buy a house is hard work and for many, almost impossible.

Other than the 'fees' mentioned above, you need to put together a sizable deposit. The average house price in the UK is currently just under £170,000. Seeing as most banks ask for at least 25% of the house price as a deposit to get the best mortgage rates, you will need to save up £42,500, with average salaries hovering around £25,000 this is not doable alone or any time fast.

To make matters worse, property prices in the UK are rather stagnant at the moment. There were some glimmers of hope in May that prices may be on the up, but the results of Nationwide and Halifax are conflicting, so who knows what to believe. Property forecasters are predicting rates to stay the same for most of 2010 and more property starts to flood the market pushing prices downward.

So, if you can't afford the UK right now but want to make an investment elsewhere then look to countries outside of the UK and outside of the Euro zone and its current turbulence. Eastern Europe is proving to be particularly appealing. As tourism in the area picks up, renting out property is becoming easier and offers a better rate of return, which can then be used to invest in property in the UK.

If you need help saving up for a deposit or to buy a European property outright, do the clever thing and put your money into a savings account that offers a decent rate of return. Santander offer some of the best savings options on the market right now. You can choose from ISAs, bonds and instant access accounts, depending on your needs and how much you can invest.

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