Five tips to help you save for a house deposit
Saving a deposit for your first home can seem like an impossible task, but getting onto the property ladder is super easy with Gleeson and you probably don’t need as big a deposit as you might think.
From setting yourself realistic goals, being savvier with your money to the benefits of opening a Lifetime ISA, our latest blog shares some handy tips to help you save money towards your house deposit and make your dreams of owning a home a reality.
1. Set a realistic savings goal
The first thing to do when saving for a deposit is to set yourself a goal. It will also be helpful to figure out an approximate amount you might be able to borrow (so that you can figure out the deposit you’ll need). For help with this, online mortgage calculators are an easy way to broadly find out how much you can afford to borrow. Once you have that figure, you can start to work out your options for a deposit. Most new house builders will require a minimum deposit of at least 5% based on mortgage requirements.
2. Set-up a standing order to your savings
Making smarter choices with your money and finances is one of the best and easiest ways to save towards your deposit. To do this, you can set up a standing order to go straight into your savings account as soon as you get paid. This way you don’t need to think about it, and there is no risk of forgetting either.
Automatically transferring the money for your deposit into a savings account as soon as you get paid will make it much less likely for you to overspend each month and will make sure you stay on track with how much you want to save after each pay day.
3. Open a Lifetime ISA (Individual Savings Account)
The Government’s Lifetime ISA (Individual Savings Account) scheme is a valuable tool to help boost your savings towards buying your first home.
If you are under 40 you can save up to £4,000 each year, until you are 50 and you must make your first payment into your ISA before you are 40. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year.
There is no charge to withdraw the funds if you are using them to buy your first home, but other terms and conditions apply. To find out the full terms and conditions and examples of savings, please visit https://www.gov.uk/lifetime-isa or speak to an independent financial advisor.
4. Sell those items you no longer use
Set aside some time to go through your wardrobe and clear out any items you no longer wear or use. Facebook Marketplace, Depop and Vinted are quick and easy to use platforms available to you at the click of a button to sell your unwanted items. Second-hand selling is a sustainable and straightforward way to generate more cash to transfer into your savings account – every penny counts towards your deposit. Plus, it will also mean less items to move with you into your new home!
Please note, depending on the amount of additional income you make from selling second-hand items, there might be a requirement for you to declare this with the HMRC, or be liable to pay tax. Before choosing to sell any unwanted items via a third-party platform, we recommend you visit the UK government’s website for guidance and information.
5. Speak with an expert
Talking to a mortgage advisor as early in the process as possible could help give you the information and inspiration you need to build the right savings plan. Plus, by seeking advice with a specialist, you’ll have a contact available once you’re ready to start the application for a mortgage.
At Gleeson we work with new build mortgage specialists Meridian Mortgages and the Mortgage Advice Bureau, who can give you advise on the right mortgage for you. Whether you decide to use them or not, having a mortgage advisor will be incredibly helpful, particularly if you’re a first-time buyer, as they will consider things such as mortgage terms, interest rates, and mortgage types, helping to make the journey seem less daunting from the offset.
Over to you!
We hope our deposit saving tips help you save efficiently as you embark on a new and exciting chapter. Remember, buying a home is much simpler than you might think and with the help of our buying schemes, you might even be able to move sooner than you expect!
Find your closest Gleeson development and start your search for a new home today: https://gleesonhomes.co.uk/find-your-home/
