Saving up for a deposit is one of the main hurdles when it comes to getting on the property ladder. A study published by Hamptons International identifies that it takes on average 7.5 years for a couple to raise the deposit they need to buy a home in London, rising to 15.5 years if you’re a single buyer.
Helping first-time buyers reach their deposit goal, the government has backed various saving schemes. Whilst the deadline to open a Help to Buy ISA passed in November, the Lifetime ISA allows you to save up to £4,000 a year, with the government boosting this with a 25% bonus, when you’re ready to buy a home.*
However, it’s not just bank accounts that can help you save – small lifestyle changes can help you put away a few pennies every month, until you have enough for a deposit. Our on-site sales team explain their top 5 tips for saving up.
- Get budgeting
Jodie: “Dividing up a budget every month, and crucially sticking to it, is a simple way to make sure you’re saving each month. Allocating money for the outgoings that are non-negotiable, and minimising all other spending, means you can save a regular amount each month, which quickly adds up to a surprisingly large pot of cash.
There are tonnes of mobile apps which can help you stick to a budget – some of my favourites are Money Dashboard, PocketGuard and Bean.”
- Swap out the little luxuries for budget-friendly alternatives
Mona: “Whilst it can be tough to resist splashing out on the little things when you know you have the money in your bank account, if you’re serious about saving, then you have to make some tough decisions. That doesn’t mean a dramatic lifestyle change; just make some small adaptations to help your purse strings. For instance, if you want to start each weekend with a curry night, then buy a supermarket version rather than ordering in takeaway. Or when your phone reaches the end of its contract, rather than upgrading, move to a SIM-only option. It takes some willpower, but the results can be great!”
- Reduce your rent
Anna: “If you know you want to get on the ladder in the near future, then compromising on where you currently rent can save you hundreds a month. According to the BBC, the typical Londoner spends an average of 49% of their wage on rent, way above the national average. Whether moving a few tube stops further away from work, or moving back into a house share, compromising on your home in the short term, can seriously pay off in the long term.”
- Cut your commuting costs
Etienne: “The cost of an annual travelcard from zone 1 – 3 is an astonishing £1,648 – money which could make a significant contribution to a deposit. Rather than getting on to a packed tube or late-running bus, why not take to the roads on two wheels, and cycle to work? You would not just be saving money, but enjoying some exercise and fresh air, and lowering your carbon footprint.”
- Pick an attainable goal
Alanis: “The average first-time buyer London deposit is almost £115,000 – an eye-wateringly high amount of money to save to get on the property ladder. Thankfully, Help to Buy and Shared Ownership mean you can buy a home with a considerably smaller deposit. Through London Help to Buy, you only need to put down a 5% deposit, which equates to between £12,000–£15,000 at Barking Riverside for a one-bedroom apartment. Shared Ownership means you can purchase a home with an even smaller deposit, requiring you to put down 10% of the value of the portion you are buying – just over £6,000 at Barking Riverside.”
*For more information on the Lifetime ISA, visit: https://www.gov.uk/lifetime-isa