With property prices at an all time high, the thought of even trying to save for a deposit seems unimaginable. Halifax have recently stated that the average house price is £178,249 meaning you’d at least need around £17,000 for a deposit, so how do you even contemplate saving for such a sum of money?
The truth is, you’re going to have to start saving at some point, so why not make it now? It doesn’t mean that you’ll have to give up your social life, but with some slight alterations to your lifestyle you’ll be on that property ladder sooner than you think.
1. Targets Establish your targets before starting anything; consider where you want to live and what type of property you want to live in. This will give you an idea of house prices in the area and what sort of figure you’re aiming to save for. Remember to always monitor the house prices as they’re continually on the rise.
2. Planning Sit down and take the time to really assess all the ingoing’s and outgoings of your bank account, this will enable you to see how much realistically you can afford to save each month, once you have a figure in mind you can then determine how long it will take to save for a deposit. This could take years depending on your situation, but don’t let that put you off, everyone has to start somewhere, besides you never know what sort of surprises may arise to give you a helping hand along the way.
3. Quit the unnecessary spending
We all like to spend our hard earned cash on things we love but reducing the little things such as a regular morning Latté from Costa (which probably costs around £3.50 per day) could save you up to around £1200 a year! Other small things like, preparing food from home rather then eating out on your lunch will really save money, consider other things such as lowering your mobile phone contract to a cheaper tariff, because lets face it do we really use all 1000 minutes? Make sure you’re not paying more than you need to for your gas, electricity, broadband and various insurances. Going on comparison websites will present the cheapest options for you to choose from, it’s worth taking the time to look. It’s surprising to think how cutting out these small things we splurge our money on everyday can make so much difference to our savings
4. The Bank of Mum & Dad
The volume of first time buyers getting assistance from their parents is continuously on the rise; you could be lucky enough, and your parents will help give you a boost towards your deposit. However not everyone is this fortunate, but there is another option, a guarantor mortgage.
A guarantor mortgage is where a relative agrees to pay the mortgage if any defaults should occur. The great thing about this is the lender judges the guarantor’s income and not yours to cover the loan. Eventually, once your salary increases you’ll be able to take full responsibility for the mortgage, and the guarantor can be released from the commitment.
5. Government Schemes
There are many government schemes out there which aim to help people buy a home. One being the Help to Buy scheme, this enables you to buy properties with just a 5% deposit, there’s other schemes too such as part buy part rent, its so worth looking into all the different options.
6. Stop renting
Renting isn’t going to be in your favor if you want to speed up the process of getting a deposit, although having the independence and your own space is nice, the reality is, half your wages are going towards bills. Imagine the chunk of money you could save whilst living at home with your parents? If living back home isn’t an option there are others, you could live with a friend? Move into a house share, or rent somewhere that is slightly cheaper than your current location.
7. The right savings account
Picking the right the right bank account all comes down to how you plan to save. Do you plan to put a set amount aside each month? Or do you need more flexibility…have you contemplated an ISA? All these things need to be considered.
Constantly review your savings plan and the house prices in the area, for all you no the prices could come down allowing you to buy earlier than expected. Being patient is they key here, and if you follow these steps you’ll be well on your way to achieving your deposit and owning your dream home.