Saving for your first home can seem a daunting prospect. If you’re a first-time buyer using a scheme such as Help-to-Buy or part-buy part-rent, it’s recommended that you save at least 5% of your desired property value as a deposit. If you aren’t using one of these schemes you should aim to save at least 10% for a deposit.
These can sound like scary figures, especially if you’re currently renting. But it’s actually more achievable than you might think. Here are 5 top tips to help you save for your first home.
Set a target
Work out how much you need to save and when you want to reach your savings goal. For example, if you want to buy a home costing £200,000 in 3 years, for a 5% deposit you’ll need to save £277 per month and £555 per month for a 10% deposit.
Open a Help-to-Buy ISA
You can put up to £200 per month into a Help-to-Buy ISA and will receive an extra 25% from the government on a maximum of £12,000 savings. If you’re buying with another first-time buyer, they can also open a Help-to-Buy ISA and get the same benefits too.
Reduce your bills
Shop around for better deals on your household outgoings. Use comparison websites to check how much other service providers charge for outgoings like phone contracts, insurance, energy, TV and internet, and you could end up saving a lot of money.
Create a budget so you know how much to spend on leisure activities such as eating out and going to the cinema. If you’re not careful these kinds of things can all add up, so by limiting how much you spend on them you can still enjoy yourself while saving.
Ask for help
A lot of first-time buyers ask for help from their family to buy their first home. According to the Council of Mortgage Lenders, 80% of people under 30 ask their parents for help with their deposit.