Top tips to save for a new home

Saving for a home

Saving a deposit to buy a new home can be a daunting prospect for many people, particularly first-time buyers.

By taking a few simple steps you will be able to build up the nest egg needed to get onto the property ladder.

Think about rental costs

Taking some time to consider the amount of money you are spending to rent a property may well lead to some helpful conclusions and ways of saving money relatively quickly.

With the costs of rent rising regularly, affording a rented flat or shared house leaves a lot of hopeful house buyers with very little spare income to contribute to a deposit savings pot. Thinking about your living situation may help with this and it could be the case that you can move into a smaller property for a short period, freeing up some money that can be put towards a deposit.

Of course, for first-time buyers there is always the option of giving up the rental property altogether and moving back home with parents, or with siblings who may already be on the property ladder. The likelihood is that any rent charged by your family will be at a much-reduced rate.

Each of these options will provide an opportunity to save some of your income and build the amount required for a deposit for a new home.

Make your money work for you

Any money you do manage to save can always be working harder for you and there are a lot of options available for people looking to save quickly and get onto the property ladder. Finding a savings account with a good interest rate is a great start and it will help you reach your required deposit much quicker.

Opening an ISA and maximising the money you move into it will provide significant advantage. Setting up an ISA is easy and the product means you will pay less tax on your savings, with every little bit helping you to fulfil your dream of owning a property.

Take advantage of government initiatives

There are a wide range of government schemes and initiatives available to help people take their first step into property ownership.

Help to Buy was launched in 2013 and it is still a very popular method for first-time buyers to buy their first property some four years later. The initiative offers mortgages for buyers with only a five to ten per cent deposit, meaning the amount required as a deposit is significantly reduced.

The Lifetime ISA was recently introduced to enable individuals to save up to £4,000 a year, either as a lump sum or by putting in cash throughout the year. This will then be supplemented with a 25 per cent bonus from the government, so those able to save the full allowance will end up with £5,000 before interest and growth is applied.

By following these simple tips, you will be able to significantly increase the amount of money you are saving and ensure that you make that step onto the property ladder and into a new home.