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5 steps toward saving up for your first house

Posted On Thursday, 09 June 2022 21:05
5 steps toward saving up for your first house

Getting on the property ladder these days is a tricky affair. In fact, it may sometimes feel as if getting together the funds for that all-important deposit is simply not possible. But there are several ways you can significantly shrink those concerns and get yourself climbing that housing ladder faster than you imagined. 

You don’t need to have instant access to a vast vault of cash to make these initial steps. However, you will need some patience, dedication, and a few saver-savvy tricks to begin growing your future deposit amount. 

There are long-term investment opportunities to open tax-efficient ISAs to help you achieve these financial goals, which you can find more information about here. But in the meantime, here are 5 steps toward getting your financial goals up and running. 

Calculate your deposit amount 

The standard UK deposit for a first-home buy is approximately 20% of the property, which means you’re looking at a savings goal of at least £20,000. Understandably, this isn’t an amount most people have lying around in their bank accounts, so it’s time to set a savings plan and put it to work.

First of all, search for mortgages with a slightly lower than average deposit amount of around 15%. It may take some time to locate them, but they’re there if you dig around long enough.

Make a long-term savings or investment plan

Five-year plans are popular for a reason - they tend to work best. Regular savings will get you to your deposit amount, and those five years will go by before you even know it. 

Set yourself a goal of a specific deposit amount, then divide that amount over five years into monthly payments that you can use as a point of reference. Automated banking aides like standing orders will help keep you on track here. 

Yes, small but regular payments into your deposit funds take time, but without a sensible and doable monthly plan, you’re setting yourself up for failure before you even begin. 

Look into equity loans and government schemes 

While you’re saving, put some effort into digging around the various help to buy ISAs, equity loans and government home-buying initiatives that are available to you.

Depending on where you reside in the UK and your circumstances in life, you may be entitled to some additional financial assistance or tax breaks. 

Identify your largest expenditures 

List out your expenditures and put them into essential and non-essential categories. Keep a keen eye on your outgoings. There’s always a way to save a little bit extra. 

Most people who do this find that they’ve completely overlooked a monthly outgoing that they don’t even want or use anymore.  

Embrace co-living for now and save for the future 

Look into shared spaces for rent or spend a few extra years at home with your parents. Keep motivated and money-savvy. 

You’ll be surprised how fast the first few years of your five-year plan go by, and in no time, you’ll be making that deposit and beginning the next chapter of your life.

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