Saving for a deposit for your own home may seem like a hopeless task. The cost of living is rising and so are the prices of houses, making it harder to get on the property ladder.
If you’re serious about saving for a deposit, you must first set some targets. Consider the type of property you desire and its location. Determine your budget for monthly mortgage payments and use online mortgage calculators to estimate your borrowing capacity.
Below are some tips which may help you save up a deposit.
Reduce Everyday Spending
Review your monthly expenses by tracking both your income and expenditures. Identify areas where you can reduce spending. For instance, consider preparing coffee at home in a Thermos flask instead of purchasing it daily on your commute. Additionally, limit social outings to once a month rather than every weekend to save money.
Manage your bills
Before applying for a mortgage, it’s a good idea to organise your finances. Clearing any outstanding debts and renegotiating bills and contracts can potentially increase your borrowing capacity. While the difference may seem small, every bit counts.
For those interested in learning about a Deed of Assignment, consider contacting a specialist such as https://www.parachutelaw.co.uk/deed-of-assignment.
Earn Extra Income
According to Financial Reporter, there are many ways to increase your monthly income to help with a deposit. Maybe try taking up a weekend bartending job, offering babysitting or gardening services, or decluttering and selling unwanted items on platforms like Facebook Marketplace or eBay.
Consider Shared Ownership
For first-time buyers, shared ownership offers the chance to purchase a portion of a property while renting the remainder. The deposit required is typically a fraction of what’s needed in the open market, as it’s only based on the share of the property you’re buying.
Deposit amounts vary depending on the development but usually range between 5 and 10 per cent. For instance, if you’re acquiring a 25 per cent share of a £300,000 property, your share is valued at £75,000, requiring a deposit of £3,750 at 5 per cent.
Consider Assistance from your Family
Research by property group Savills indicates that nearly half of all first-time buyer transactions this year have been funded with help from family members. If you’re fortunate enough to have parents, relatives, or family friends who can provide financial assistance, it’s an excellent opportunity to step onto the housing ladder.
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