Finding enough money for a housing deposit can seem daunting and for many people it will be the most expensive transaction of their lives. Saving isn’t easy, especially in times when the cost of living is rising, but there could still be ways you can save for a deposit so you can get yourself onto the property ladder. To get you started, here are 5 tips for first-time buyers that are saving for a deposit.
Start saving early
The earlier you can start saving, the more time you have to build up a deposit. It doesn’t matter if it’s only a small amount of money as it all counts in the end. So even if you start saving small and can gradually increase the amount of money you save over time, it enables you to become used to the savers mentality of keeping a tight reign on your finances. You may not be planning on buying a house in the immediate future, but if it is your end goal then saving early can really make a difference.
Cut down on luxuries
We all enjoy life’s little luxuries but if you can cut down some of your spending in this area it can help you gather the deposit you need for a house. Maybe look at your TV package to see if there is a more economical option available. Try to lower your spending on outdoor entertainment such as bars and restaurants – you don’t have to stay locked indoors day after day but managing your spending here can really help.
Sell unused items
We all have items laying around the house that we no longer use. Whether it’s old DVDs, CDs, books or clothes, you could earn a tidy sum of money if you sell them at a car boot sale or on second hand sites like eBay or Depop. While you won’t get a huge amount for these types of items, added to other savings it will all add up in the end.
Consider downsizing
If it is an option, you could consider downsizing your accommodation to save on rent. This could add up to significant savings and go a long way to building up your savings for a deposit. Maybe you have unused bedrooms and could live in a smaller property, or think about moving to an area that is less expensive to live in. You could even consider renting out unused rooms in your house to earn extra money each month, which can then be added to your savings pot.
Open a lifetime ISA
By opening a Lifetime ISA (LISA) you benefit from tax free interest accruing on your money. If you are aged between 18-40 and save no more than £4,000 per year, you’ll also access the 25% government bonus, which means you will receive an extra £1,000 for free to put towards your deposit. There are a number of cash LISAs available on the market and you can see the full list here.