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Top Tips for Saving for Your First Home Deposit

Posted on April 30, 2019

According to a recent study, it now takes the average first-time buyer eight years to save a deposit to purchase a home. Low wages and interest rates aren’t making things any easier, and if you’re renting while saving, your wait could be even longer. Taking that first step onto the property ladder is no doubt difficult but buying your first home is just the beginning of a rewarding and enjoyable journey.

Buying a property is a better investment than renting, it’s also far cheaper. The right investment could make you a profit in the long run with your monthly repayments taking you one step closer to outright ownership, instead of going into a landlord’s pocket. Saving for your first home deposit is possible, here we share our top tips for saving to help you on your way…

Live with family

If it’s possible, stopping renting and lodging with family members is a great option that will free up essential funds to put towards your deposit. A period of 6 to 12 months is what most recommend. If you don’t like the thought of not having your own space, shopping around for a cheaper rental or even a spare room to let could provide the boost you need.

Take in a lodger

Please note, you must seek your landlord’s permission before sub-letting your rental property. If your landlord agrees, any rent you charge your lodger could give you the extra money to put towards your deposit. Some landlords may agree to the sub-let if they can advertise the room directly. Either way, it will lower your rent, which is a win-win for your home deposit.

Use a government scheme

There are a number of government incentives and schemes that first time buyers should be aware of. The Help to Buy scheme is the most well-known and is offered by many lenders for the purchase of a new build property in England. The scheme provides an equity loan, which means you can buy your first home with as little as a 5% deposit.

A Lifetime ISA (LISA) is another option. With this ISA you can save up to £4,000 tax-free each year. You’ll also receive a 25% government top up, which means a free annual boost of £1,000 if you save the full £4,000. With this extra boost, you’ll have your deposit in no time!

Get budgeting

Setting, and sticking to, a realistic budget is the key to saving all you can. Calculate your monthly incomings and outgoings and determine which areas you can cut back on. Looking at the cost of your current bills and shopping around for better deals will also help you save more money towards your deposit.