Buying a house today is a lot more difficult than it used to be. When you discover just how much of a deposit you need to stump up, it’s easy to see why the number of first time buyers has significantly dropped in recent years.
The average deposit required is 20%, so you could end up looking at a staggering £20,000 lump sum to fork out for. As most first-time buyers don’t have this kind of cash lying around, the question is, how can you save such a large amount and get your foot on the property ladder?
It’s certainly not easy, but it is doable. Below, you’ll discover some of the best tips to help you save for that all-important house deposit.
Establishing how much you need to save
Now, before you actually start saving, it’s going to help if you have a good idea of how much you need to save. Setting up a regular monthly savings plan is the best way to achieve your goals, but you need to have a goal in mind.
The easiest way to do this is to write down how much of a deposit you’ll need. Then, work out how long you’re willing to save before you buy. For example, if you’re hoping to buy in five years’ time and you need a £10,000 deposit, you’d roughly have to save £150 per month.
There’s an excellent free savings calculator you can use to work out how long it would take and how much you’d need to save each month to raise the money for your deposit. This tip alone can help you to start taking your savings a little more seriously and keep you focused on your goal.
Stop renting
Let’s face it, it’s hard to save for a deposit when the majority of your income is taken up by rent. That’s why, many people who are trying to save up for a deposit end up moving back in with their parents. Not having any rent to pay, or at least a dramatically reduced amount, can help you to save hundreds of pounds a month and help to get you onto the property ladder quickly.
Moving back in with your parents not an option? An alternative could be to move into a shared house, or consider getting a lodger in if you have the extra space. This tip is the one that’s going to save you the most amount of money.
Cut your spending
Ok, so this one’s a little obvious, but cutting the amount you spend on non-essentials can help dramatically. Many of us don’t even realise what we are spending on little luxuries. If you switch from a private to a council based gym and cut back on just one takeaway a week, the savings you make could total £900 in a year!
Once you’re close to reaching your savings goal, the next thing you’ll want to do is seek advice. Different lenders will offer different terms, fees and rates. So, before you start, it could be a good idea to consult a company such as Holbrook Property Finance Limited.
Overall, saving for a house deposit or top up for homebuyers next property isn’t easy, but there’s plenty of tips you can try out. The above are just some of the best ways to cut back and become serious about your deposit savings.