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Home sellers lecture Londoners on money discipline

Jal Paddy,

The London youth are always badgering on about how hard it is to get onto the property ladder in this city. And in many ways, they are quite right.

First, the normal way to buy a house here, like it is in all modern economies, is through a mortgage. A bank or building society advances a loan with which the house is bought, and the buyer pays back the bank over many months, along with a small interest until the loan is cleared.

The monthly repayments of the mortgage are usually quite close or even less than what one would have paid as rent for the house. The hairy part is putting together that first initial deposit which, for London, is at around £94,000 (approximately Shs 456 million) for a house that would cost about £481,556 (approximately Shs 2.3 billion).

These two figures are London averages, which are on the high side. The average property value for England is at £240,000 (approximately Shs 1.2 billion). But then you must remember people want to buy houses in areas they know, or where they have family, friends and can find jobs easily.

For instance, a fellow living and working in Kampala will most likely wish to buy a house in Kampala rather than in Soroti even if houses are cheapest in Soroti.

Enormous figures these are, considering that the average UK annual salary is £27,600 (approximately Shs 134 million) for full-time employees. The big question for young folks, therefore, is how to put that money together to buy a property.

Naturally, we think of winning the lottery, getting better-paying jobs or waiting for that miracle to rain on us. Yet the answers seem less complicated than that.

A detailed analysis by London real estate agencies released this month insists that we don’t need to be loaded with money to get on the property ladder, but rather make small changes to our lifestyles.

First to go are the expensive coffees and avocado on toast young working folks live on nowadays. The old chap you see next to you at work, quietly eating his homemade sandwiches, bruised bananas and cassava is no fool. Think!

More of the calculations show a further £13,200 (approximately Shs 64 million) a year can be saved by cutting down on takeaways, £30,160 (approximately Shs 146 million) on night outs, £3,500 (approximately Shs 17 million) on mini holiday breaks like a weekend to Spain/ Greece, and up to £770 (approximately Shs 3.7 million) by not upgrading to a new phone every year.

Add that up together for over four to five years, and one has that significant savings for the all-important initial deposit.

The government also chips in about £3,000 (approximately Shs 14.5 million) free for first-time buyers, coupled with legal advice and support.

I guess the same logic could be applied to all faucets of today’s fast-paced modern life. Many times, it is so easy to comply with the trends and on-goings around us that we neglect to think of what would work for us as individuals.

More so, sticking to one’s plans, goals and ideals is paramount, although it takes lots of sacrifice, dedication and discipline. We should get done with all important life lessons now than waiting until it is too late.  

Here is the disclaimer: I’m not saying we live on cassava and water, drop the boys’ hangout or never drive through KFC on way home. But millennials should remember these things are referred to as ‘treats for a reason’.

Yours friend,
Chris.

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