by Lea Emery on Invalid date
When you want to save for your first flat or house, it can be difficult to know where to start. It's totally natural to feel overwhelmed because saving for a house deposit is a huge undertaking — especially if you've never saved a large sum of money before. According to the Land Registry, the average house price is currently £228,903, though this can vary wildly depending on where you want to live. But as you normally have to save around a 10 per cent for a deposit, we’re talking around £22,890.30 — which is a serious amount of money.
If that feels totally unachievable, try to take a deep breath — because there are ways to get there if you’re willing to prioritise it and commit. Of course, some people will get there faster than others and it may be that you want to find a cheaper property in your area. But, no matter what your deposit goal is, it all starts with saving. Here’s what you need to know.
If you’re a first-time buyer, a Help To Buy ISA can help your savings grow faster with free top-ups from the government. Basically, the way that it works is that however much you save the government will give you a 25 per cent boost up to a total of £3,000. When you think that £3,000 is over 10 per cent of the average deposit, that's a significant addition to your savings.
There’s a Help To Buy ISA websitewith all of the details but they’re offered by most major banks. Websites like Money Saving Expert let you compare different Help To Buy ISAs to see which one is best for you.
It’s also worth looking at the first time buyer Stamp Duty relief scheme, which applies to many new buyers and will help with the taxes you have to pay when you purchase a home.
When it comes to investing, every little bit helps. Micro-saving lets you put money away without even noticing that it's gone. Apps like Moneybox and Monzo specialize in round-ups, where every time you spend they round up to the nearest pound (or however much you suggest) and put it into your savings. Another choice is Plum, which analyzes your spending and puts money away for you when they know you won’t miss it. It's all of the savings, without the stress.
It might seem like savings is all about whether you have the money or you don't, but psychology actually plays a big role. Rather than just saying that you’re going to try to save over £20,000, say you’re going to save £300 or £500 a month — or break it down even further and say you’ll save £50 or £100 a week, even £10 a day.
Why? Financial experts agree pretty unanimously that when we start to see that money compiling, it’s easier to have the motivation to keep going. The sooner you start seeing it grow — even if it’s just a little bit per week — the more satisfying it becomes and the more realistic your goal seems. Once that happens, it’s easier to stop yourself ordering that Deliveroo or buying that top and put the money in your savings instead.
There are still so many ways to be a savvy shopper. There are plenty of apps to help your savvy-ness, for example, TopCashback gives you cash back on things you would buy anyway, and Honey for all of the voucher codes or deals that could apply to you. But, be careful to not be tempted into spending more just because it seems like a good deal — and if you know you can’t be trusted with a credit card, then it doesn’t matter how great the rewards are.
Another good rule? Unsubscribe from all of those sites who are constantly sending you updates about sales and offers. And any purchase, wait 24 hours and see if you still want it. So often, we just get caught up in the moment and click “Buy” — the wait will make you see if it’s really worth it.
We aren't going to tell you that avocados are the reason you don't have a house deposit saved yet or that flat whites are single-handedly holding you off of the property ladder — it would take a lot of coffees (around 10,000) to save up an average house deposit.
That being said, you can find some ways to cut back. Look through subscriptions that come out of your account every month, because you might find that you’re not actually using Spotify premium that much or that you can share Netflix with your housemate. Don’t be afraid to switch energy suppliers or phone companies for a better deal — it’s easier than you think. And little things, like packing lunches and skipping Wednesday night drinks, do add up, so make sure to see where you can cut back.
6. Sell, sell, sell
There's a saying - one mans trash is another man's treasure and you could be sitting on a goldmine. There are plenty of options for selling your unwanted items like eBay, Depop, Facebook Marketplace and, if you can brave the British weather, car boot sales. Also, an added bonus is that you'll have less to move when you do buy your new home.
Saving for a house deposit can seem like a daunting, overwhelming experience — but you have to start somewhere. If you make small changes, know where you can find incentives and freebies, and, most importantly, start seeing that money build, it might be easier than you think. It’s all about taking the first step.
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