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. Read our top tips for saving for a new home which will help you work towards getting the house of your dreams.
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 has been a very popular method for buyers moving into new build homes since it was first introduced in 2013. The first iteration of the scheme is to close in March 2021, however, from April 2021 to March 2023, a new Help to Buy scheme is being introduced in England, with an emphasis on supporting first-time buyers.
The new scheme will work on the same basis as the existing Help to Buy equity loan, where you can borrow an equity loan of up to 20 per cent (40 per cent in London) of the sale price of a new build home and only need to put down as little as a 5 per cent deposit. However, this will only be available to those taking their first steps onto the property ladder.
Another government-backed incentive is the Lifetime ISA, which allows 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.
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.
According to the latest data, the average property rent in the UK is £987 a month – a figure which drops to £828 a month, when London is excluded – and the increases in rental rates are showing no signs of slowing down.
With the costs of rent rising, 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.
Find the best savings account
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.
Reduce outgoings to boost your savings
Arguably the most basic principle of saving money is to cut back on your spending! By reducing your monthly outgoings, any extra money can instead be put towards a deposit for purchasing a home.
These don’t have to be drastic changes to your everyday lifestyle. Swapping supermarkets to a discount chain, cancelling your monthly gym membership or switching to a more cost-efficient tariff, or look at moving to a different utilities provider in your current property are all easy ways to help cut down your monthly expenditure.
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.
Are you ready to buy your next home? At Avant, we give you more home to begin, so find your dream home with us today: https://www.avanthomes.co.uk/find-your-new-home/