How To Save For A First Home Deposit

For first-time buyers, taking that first step onto the property ladder can be difficult and there are many practicalities you’ll need to prioritise on the property investment journey.

Before the fun of house-hunting can begin, you need to know what sort of home you’re able to afford, taking into account current salary as this will dictate the affordability of your monthly mortgage repayments.

Once you have an idea of affordable property prices that align with your circumstances, you will be able to work out the size of deposit you’ll need. From there, you can put together an action plan to help you save up. 

Remember that, typically, a deposit of between five and ten per cent of the house price is needed before lenders will consider you for a mortgage.

This can seem like the most difficult part of buying a house, but it’s entirely achievable if you put your mind to it. Here are some top tips from the BR Needham team to help you get started.

1. Devise a savings plan

Look at your salary and be realistic about what you’ll be able to comfortably save each month. Set up a standing order so that your set amount goes straight into your savings account the day after you’re paid each month so you don’t even have to think about it.

2. Set up a Lifetime ISA

A Lifetime ISA is designed specifically to help people buy their first home or set up a retirement fund (or both!).

The government will pay in a 25 per cent bonus on whatever you save, up to £1,000 per tax year. You can pay in up to £4,000 in a year, so can save up to £5,000 with the government bonus on top.

3. Reduce your outgoings

Go through your bank statements and see what areas you can quickly cut back on to save more each month. Are there any direct debits you’ve forgotten about, for example? Do you eat a lot of takeaways? Do you go out socialising several times a week?

Being strict with your lifestyle and making a few changes here and there will quickly mean greater savings add up over time.

4. Consider current living arrangements

Renting will naturally take a big chunk out of your monthly budget, so consider if there are other options available to you, such as moving in with a friend or moving home to cut back on rental expenses.

5. Sell surplus belongings

Have a good spring clean and declutter your home, selling items that you no longer have use for. This is a great way to raise a little extra cash, all of which can go straight into your savings account.

Find out about first-time buyer mortgages…

Buying your first property can be tricky and understanding your mortgage options can be overwhelming. For help, guidance and advice throughout the process, give the BR Needham team a call today.