With the average UK house costing around £200,000 now (although there are huge regional variations, of course), most first-time buyers will need a deposit of £20,000 to get on the property ladder.
This might seem like a huge sum, especially if you’re already paying a fairly high rent, but it is possible, you just have to mount a well-organised savings campaign. Starting with a budget.
Set your budget
From now on, you’re in a numbers game so you need to know what you’re dealing with. You need to use the Creditfix budget calculator so you have a clear idea of your income and outgoings. You should comb though it, looking for things to nix or reduce. The simplest things to reduce will be your household utilities as you won’t be depriving yourself of anything. Then you need to look for things to stop buying so often, or at all.
Eliminate money drains
That quick coffee and pastry on the way into work is a great little deal at £2.50, right? Well, yes; but if you’re taking advantage of this great deal four or five times a week, then you’re spending at least £10.00 a week, £40.00 a month. This could, over a year, total £500.00. That’s 2.5% of your £20,000 target and while that doesn’t seem like much in itself, you’ll have other, maybe even bigger drains on your income that you can live without. Think about it – do you need a new face scrub every time you go shopping? You could even make your own…
Earn some more money
Saving for a house deposit isn’t just about scrimping to make the most of your existing income; it’s about increasing your earnings too. If you have time to work a few shifts in a local pub, do some gardening, walk a few dogs or even go leafleting, then do it. Just make sure that your extra money does go into your deposit pot and not on exfoliators!
Make use of government help to buy schemes
There’s quite a few help to buy schemes out there, especially for first-time buyers, so see if any are suitable for you. The Help to Buy ISA is especially useful if there’s two of you saving for a deposit as you can both get one. The government will top up your savings with a further 25% (up to £3,000). There are eligibility criteria, but if you qualify, it can be a big help.
Move into a smaller place
If you’re renting, you’re almost certainly paying more in rent on the place than you would if you had a mortgage on it. Paying less rent each month is a sure-fire way to boost your savings up even faster. You can either move into a smaller place – maybe even your parents’ garden room – or you can move further out from the city. If this means you move nearer to your work then that’s even better, but if it means making your commute a bit longer, then just make sure it doesn’t cost more than you’re saving!