Moving house is an exciting milestone in your life but before you start packing up your belonging, you need to make sure you have enough money for the deposit. In most cases, you will need a deposit of at least 5% of the house price but the average property deposit is 15% in the UK for a first-time buyer.
At first glance, this can seem challenging but it’s not impossible if you put the right saving strategies in place. Saving for a deposit on a house could take you anywhere between two and 15 years, however, this all depends on how much you put away each month. For example, if you’re putting down a deposit of £10,000, you’ll need to be saving £265 or more a month.
Cut the costs of rent
This is easier said than done but cutting the costs of your rent can help you get on your way to living in a new home. You can save money by living with roommates or friends to divide fees on a conventional rental, including bills, council tax, and other amenities. There will also be opportunities to negotiate shared costs too, such as if you have a smaller room than other tenants.
Co-living is another good option that can save you some pennies. This involves just renting a bedroom and sharing communal spaces with other tenants. You can rent the space as an individual tenant and bills are usually included which makes budgeting easier in the long term.
Cut down on everyday spending
Becoming a savvy saver will see a healthy addition to your deposit funds every month so you should find areas to cut down on your monthly expenses where you can. It helps to first develop a solid overview of your spending month to month to find sections where you are overspending. This could be as little as cutting out that daily cup of coffee or limiting yourself on non-essential purchases.
Comparing energy packages to find the best deal could also make a sizable dent in your expenses. Cheaper tariffs for other bills like your phone and broadband will also be helpful.
Government support
You can look to see if you’re eligible for a government grant to take some of the pressure off. Help to Buy schemes and shared ownership plans are designed to help first-time buyers get a foothold in the estate market.
Shared ownership allows new buyers to purchase a share of a new build or resale property and pay a mortgage on that share alongside a subsidised rent to a housing association on the remaining share.
Using LISA
Lifetime ISAs or LISAs are saving accounts that help people save for their first home or retirement. The UK Government provides a bonus of up to £1000 per year until you reach the age of 50 and there are current interest rates of around 1 per cent.
