Saving up for a deposit on a home is hard to do, and it can be a real struggle. According to research from Aviva, people planning to buy a home in the UK save for an average of four years to afford the deposit – and 27% believe that they will never be able to save enough for a deposit.
Here are some ideas for getting your saving off to a great start so you can get on the property ladder sooner.
Save in an ISA
Save the maximum amount you can afford in an ISA (at the time of writing, you can save up to £15,240 every tax year). This is a great way to save because you won't have to pay tax on the interest you accrue.
Save into a High-Interest Account
As well as an ISA, open a savings account and put money into it regularly. You could even set up a standing order to send a certain amount of money each month into your account, and this will help you to be strict.
Make sure you compare accounts to find the best savings account you can. Spend some time searching, and don't just go with your own bank account because you may be able to find a better deal.
Reduce Your Spending
The most obvious tip is to cut back on your spending as much as you can and in every way you can. Cut back on treats, such as that coffee you buy every day, and save the money away to go towards your deposit.
Save on Your Rent
If you are spending more than you feel you can afford on rent, it might be a good idea to cut back. You may find that moving to a smaller property or to an area with cheaper rents is a good idea. It might not be as comfortable, but you have the comfort of knowing that you are saving more each month to buy your own place.
Start as Early as Possible
It really is never too early to start when it comes to saving for a deposit, so start now. And don't worry about starting small: even if you can only save a bit each month, it will get you into the habit of saving.
Have a Target
The minimum you will often need to save is 5% for a deposit, but it could be much more. Typically, the more you save, the better mortgage deal you should be able to get.
It's always good to have an idea in mind of what you need to save. If the average house costs about £180,000 in your area, a 5% deposit would cost you just over £9,000.
By having a goal in mind, this can help you to work towards it when saving becomes tough.
Check Out Government Schemes
There are various government schemes that can make buying a home easier. The Help to Buy ISA can help with your deposit, in which the government tops up your savings with 25% up to a maximum of £3,000.
Or you may want to find out more about the Help to Buy Equity Loan, which is a low-interest loan that is put towards your deposit.
So check these out and see if you can get some help towards saving.
Start Saving for Your Deposit
Saving for a deposit can be tough, but it may be more possible than you think. Don't give up the dream of owning a home, and start taking some steps towards saving for a deposit – soon you may have enough saved away to get onto the property ladder.