Whether you’re a first time buyer or you’re looking to make a move to your dream home, saving for a house can be tough. Financial obligations, direct debits, and dependants can make the idea of having enough money for a deposit seem unachievable.
12th December, 2021
Whether you’re a first time buyer or you’re looking to make a move to your dream home, saving for a house can be tough. Financial obligations, direct debits, and dependants can make the idea of having enough money for a deposit seem unachievable. Saving for a deposit is difficult. That’s why we’ve compiled this handy guide with our top tips for saving for a deposit on a house. Read on for more information.
Do your research
The first step on your journey to save for the deposit you need for your house is doing your research. Use property platforms such as Rightmove and Zoopla to find out current asking prices for the kind of property you want. You can then use that information to calculate how much your deposit would need to be to secure the property.
Keep in mind that buying a house isn’t just about making sure you have enough money to cover the deposit. You’ll also need to think about other purchase costs that are involved. These can be conveyancing fees, survey fees, upfront mortgage fees, and stamp duty. Make sure that you factor these costs into your research stage. Check out our handy guide for more information on how much it costs to sell a house in the UK.
Set your Budget
Once you’ve done your research and established exactly how much you’ll need to cover your deposit and purchase costs, you need to build a plan to get there. This means putting together a budget to save for your house deposit. Tools like Microsoft Excel have pre-made templates for this kind of thing, and can be really useful to help you organise your finances and meet your savings goals.
Setting up a budget in this way will help you to see how much you are able to save on a monthly basis. It can also be a great way to identify easy ways to cut out unnecessary spending. But more on that later.
Make the Most of Government Schemes
The Government offers a range of schemes to help you save money and assist first time buyers. They do this to encourage saving and to help young people get a foot on the property ladder.
One of these schemes is the Lifetime ISA. This allows you to save with a 25% bonus from the Government up until the age of 50. It can be used for either buying your first home or for retirement.
Another such scheme was the Help to Buy ISA. Whilst this has now closed to new applicants, it continues to run until November 2029. This was specifically for first-time buyers and offered a maximum bonus of £3,000.
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Finally the Government’s Help to Buy scheme helps new would-be homeowners get a foot on the property ladder by increasing the amount of 95% Loan to Value (LTV) mortgages available. This means that first-time buyers only require a 5% deposit to purchase a property. Getting that deposit can still be tricky though, so check out these pointers to help you get there.
Set up a Regular Payment to a Savings Account
There’s no getting around it, payday is also bill day. That means a significant proportion of your monthly income ends up getting siphoned straight out of your bank account. One way of saving consistently is to set up a standing order to go directly into a savings account that you don’t touch. This way you can consider the payment like a bill, and you won’t be tempted to use that money as part of your disposable income. Make sure that you have enough money in your account to make the payment each month though. You don’t want to end up going overdrawn! You can check out moneysupermarket.com for a great comparison of savings accounts. Some come with helpful rewards that will help you save for a house deposit.
Boost your Income
Taking steps to increase your income is a great way to boost your deposit savings. You can increase your income in a number of ways, you can set up an Etsy shop, sell old clothes you no longer wear on DePop, or declutter the house or garage and put those items on Ebay or Facebook Marketplace.
You can also have a conversation with your employer about a salary increase to help you save for a house deposit. The best time to have this discussion is during an annual performance review. Come prepared and lay out exactly how you’ve been performing and why you believe this performance warrants a salary increase. If you are able to secure a raise then you could end up with a significant increase in the amount that you’re able to save towards your deposit.
Rent out a Room in your House
If you have an extra bedroom in your apartment then renting it out can be an excellent way to generate more income. Put this money directly into your savings account and it can really boost your deposit savings pot. You can even do this with your entire apartment if you are away for the weekend. Sites like Airbnb allow you to flexibly rent your apartment and generate income.
Another great idea to generate additional income is renting out a parking space. If you live in an urban area where parking is a premium, and you have allocated parking that you’re not using, then you can rent out your parking space using an app like JustPark.
Cut down on your Bills
One of the quickest and easiest ways to save money and help you save for a house deposit is to reduce your bills. You can do this by switching energy bills to a cheaper tariff, finding the best deal on your mobile phone, making sure that you’re paying the correct amount of council tax, and cancelling any unused subscriptions. If you’re working from home, you can check out our guide on how to reduce bills from your home office.
Get Cash for your House
Unless you’re a first-time buyer, then you could sell your house fast for cash and become a cash buyer. A great way to do this is consider using a cash house buyer like SmoothSale. SmoothSale can buy your house for cash in as little as seven days. There are no fees to pay, and we’ll even appoint you a solicitor and cover your legal fees so the process is as smooth as possible. If you’d like to get cash for your house fast, then why not give us a call today on 0800 368 8952 or simply get a cash offer today!