To save enough for a house deposit, aim for a sizeable amount that shows you can budget and meet mortgage payments; this typically takes time depending on your income and savings rate. While the article doesn't specify exact sums or timeframes, it emphasises the importance of consistent saving to demonstrate financial stability to lenders, helping you get on the property ladder sooner.
The upside to saving is not only will you have a sizeable deposit when you come to buying your house, but you will also be able to demonstrate to lenders that you are able to budget and save and are therefore more likely to meet your monthly mortgage repayments.
While it may feel impossible to save up enough for a deposit, there are various things you can do to ensure you get on the property ladder sooner than you think.
Whether you have just started saving or are ready to buy your first home, our mortgage advisers can search over 11,000 products from more than 90 lenders to find the right mortgage to suit you and your circumstances. A mortgage adviser will be able to explain all the options available to you and will look at your income and outgoings to establish how much you can afford to borrow and how much you need to save.
Learn more about Resi Finance.
Budgeting your money and controlling your income against your outgoings can help you keep on top of your finances and discover where you can make cutbacks to help save towards your deposit.
It is important with your budget to consider unexpected costs that may occur and be sensible in your estimates. For example, if you’re feeding a family of four, a budget of £100 a month on food is unlikely to be achievable and it would be better to overestimate your food bill, leaving you with some extra food money for the following month.
Making cutbacks doesn’t have to be painful. The easiest way to save is to make sure you’re not overpaying on your gas, electric and various insurances.
Changing your provider and finding better deals can help you save up to £200* a year towards your deposit and speed up the process of getting on the property ladder. Whilst you might not think you spend a lot on going out, cutting back here and thereby reducing the number of times you eat out, you may start to see the savings pile up.
The government has introduced a number of different Help to Buy schemes you may be able to take advantage of, all of them aimed at those struggling to get to where they want to be on the property ladder:
Help to Buy Equity Loan: if you are a first-time buyer and interested in a new build, the government will lend you up to 20% of the cost of your new build home in which you will only have to find the minimum 5% cash deposit.
Lifetime ISA: if you’re a first-time buyer, the Lifetime ISA acts as a savings account with a few added benefits. You can pay up to £4,000 each year into your account and receive a 25% bonus (£1,000 maximum) from the government.
Borrowing money from your parents can be a quick way to help buy your own home years earlier than you would without their help. If your parents are willing to help you financially, just be aware that there’s a set procedure to follow, as this money must be officially gifted.
You might also consider a ‘guarantor mortgage’, which is a popular option with first-time buyers. If your parents (or close family member) is willing, they can use this mortgage type to act as your guarantor and promise to the bank that they’ll cover any repayments, should you be unable to.
Still feeling lost about getting on the property ladder? Please don’t hesitate to get in touch if you need help buying your first house.
*according to Department of Energy and Climate Change Government Statistics
Copyright © 2022 Resi Design Ltd.
Resi Design Ltd. trading as 'Resi' | Company No: 10471125
We are proud to employ architects registered with the Architects Registration Board and were awarded the mark for The Mayor's Good Work Standard for fair pay & conditions, wellbeing, skills, progression, diversity and recruitment.