Date Published 28 February 2020
Saving to buy a house has never been harder. With the average home deposit in the UK costing £33,000, it is not surprising that people are struggling to save each month.
If you want to get out of the savings slump and get your foot on the property ladder then you need to put some of the following tips to the test:
Lighten the luxuries
We are all guilty of splashing out on unnecessary luxuries, but if you are serious about buying a home then saving should take precedence. You will need to get to grips with your finances and get stricter with budgeting.
To make things easier it is worth downloading a money-saving or budgeting app. For example, Monzo and Oval can round up your spending. Whereas other apps such as Chip and Cleo use algorithms to analyse your financial behaviour and decide how much you can afford to spend.
Reduce your current bills
The easiest way of saving money for your deposit is to reduce your current outgoing bills. It is easier than ever to switch your energy bills to cheaper tariffs. Additionally, it is worth checking your council tax - if you live alone you can be entitled to a 25% discount! It is also worth shopping around for cheaper broadband and mobile phone packages too.
The bank of mum and dad
Today, many people rely on their parents to help them out when it comes to saving for a deposit. In fact, it has been found that a quarter of all mortgages taken out involve financial support from family, making parents one of the UK's biggest mortgage lenders.
Even if your mum and dad cannot afford to contribute towards your deposit there are other ways, they can help out including acting as a guarantor on certain types of mortgages. Alternatively, they may allow you to move in with them which can help you limit your outgoings and save more money.
A Help to Buy scheme is designed to help you save for a mortgage deposit to buy your first home. If you were lucky enough to apply for the scheme before November 2019 then you can keep saving into your account and the government will top up your contributions by 25%.
For new savers, LifeTime ISA's or regular savings accounts are available. It might be worth shopping around for an account that gives the best combination of good interest rates and easy access to your money. What's more, if you're going to be saving for a number of years consider an account that will allow you to pay regularly and reward you for not touching your savings.
Don't forget the other home-buying costs
Your deposit will be one of the biggest costs when you buy a home. However, it's important to consider other costs such as mortgage arrangements, conveyancing fees and general moving costs. By adding these to your savings target means that you won't have any surprises later down the line.
Marshall Properties are here to help
These are just some of the ways you can save for a housing deposit, but we hope it helps you with getting one step closer to your dream home. If you're looking for more advice then get in touch with our team today.