Plan to end nestlessness

Where there's a will there's a way, says financial educator Lisa Dudson. Photo / Getty Images

The young have been kicking up a storm that cutting out lattes will never save them enough for a house deposit; but where there's a will there's a way, says financial educator and property investor Lisa Dudson.

Cutting out the lattes is part of the answer, but so is demystifying the maths, says Dudson, a director of coaching service Young & Nestless.

Its service works by ensuring wannabe home-buyers have a written plan and get the support they need to stay on track, she says.

It shows them the light at the end of the tunnel. It is building an online dashboard where savers go to track their progress towards first-home ownership day by day, which could well encourage them to find additional savings.

The programme is aimed at couples who have a combined annual income of $120,000, and can save a deposit in as quickly as two and a half years, says Dudson.

That is made up from the couples' KiwiSaver savings combined with employer and Government contributions and the HomeStart grant, which kicks in after three years of saving and reaches the maximum at five.

The grant is doubled for those buying new property. Some first-home buyers also qualify for low deposit Welcome Home Loans.

Savers will also receive a $1000 grant towards a deposit after two years' membership, which in effect is a rebate of some of their insurance commission.

In order to get there, the couples have to increase their KiwiSaver savings to 8 per cent and cut non-essentials from their spending until they're in their home.

It isn't all about cutting back and sacrifice, Dudson says.

However, anyone who wants to save significant chunks of money needs to have a working budget and to understand the difference between needs and wants.

Often potential first-home buyers are put off at the first hurdle, thanks in part to received wisdom that "it's impossible to buy a house". But those who believe they can do it, find a way.

According to CoreLogic data, first-home buyers made up 20 per cent of all purchases in its most recent figures from March 2017, which was lower than 2016, but not as low as early 2014, when the first round of LVR restrictions came in.

In Wellington, first-home buyers were snapping up a record 32 per cent of all properties during that month.

However, CoreLogic points out that all first-home buyer figures are skewed because the latest round of loan to value ratio (LVR) restrictions has caused a significant drop in sales volumes, and this has impacted all buyers.

What has been forgotten in 21st-century New Zealand, is that first-home buyers should be looking at apartments, flats, units or basic starter homes in the outer suburbs.

Unlike financial coaching companies that charge up front for their services, Young & Nestless makes its money by clipping the ticket on the insurance.

It hopes eventually to offer mortgage broking as well, for which banks pay commission, and work with home builders to provide an end-to-end service.