How to save a house deposit fast
The UK property market is certainly very buoyant at the moment. Many buyers have taken advantage of Chancellor Rishi Sunak’s Stamp Duty Holiday and other government incentives. It is certainly a good time to buy because house prices are going up, but the first hurdle for many, is saving enough money for the deposit quickly. It is true that saving quickly needs good discipline, great determination and an effective plan. We bring you some great ideas to make it happen!
1. Work out exactly how much money you need
Before you start the hard work of saving; you do need to know exactly how much money you need for your deposit. Get yourself clued up on the various government schemes that could help:
- Help to Buy Scheme – an equity loan scheme (5% deposit needed)
- Right to Buy (Council and Housing Association tenants buy the property they live in)
- Shared Ownership (Tenants buy a share of the property from their landlord – usually the Council or Housing Association)
More information is available on https://www.ownyourhome.gov.uk/
Also check the different types of mortgages being offered by the main money lenders as many of them have signed up to the government’s 95% mortgage scheme which will continue until 2023.
Do you have relatives who would be prepared to lend you some money towards the deposit so that you can buy quickly? If the answer is yes, make sure that pay back arrangements are written down formally so everyone knows where they stand. It is important to know that if they are lending you a sum of money, it will have to have been in your account for three months before you use it – best to double check this with your bank or building society.
Another idea is to buy the house with a relative if they do not need somewhere to live – they pay half the deposit and legally own half the house as an investment. This scheme can work really well, but does need discussion about when you would all agree to sell the property.
2. On pay day bank your savings separately!
“Buy my house” property experts Housebuyers recommend keeping your savings separate!
As soon as you get paid, make sure that you move the amount you are saving into a savings account – well away from your current account! This is definitely how to save a house deposit fast! If you try and budget so that the amount you want to save is left in your account at the end of the month, it will never be there! It is far better to remove the money on the day you are paid. If you are buying your first house with your partner, check that they are doing the same – it is really important to work together as a team.
3. Be thrifty with your shopping
You do not have to live on baked beans and pasta, but you do have to shop wisely! Buy cheaper brands of your favourite foods and better still, shop in the discount food stores like Aldi and Lidl – you will soon discover why they are so popular! Get to know when your supermarket reduces its foods as you can get some great bargains! Buy your fruit and vegetables in your local market as prices are often lower.
Every time you save money buying a certain product that is a different brand to your usual one, pop the difference in price in a giant piggy bank or large jar – you will be amazed how quickly it fills! Also pop all loos change under 10p in the jar – this is a fun way to save for your house deposit fast.
4. Can you cut your rent?
This is no doubt your largest expense each month and definitely worth reconsidering. Can you move somewhere cheaper? If you need to be in the area then this will probably mean downsizing, but if you are likely to be working from home for many months to come, it is worth renting somewhere out of town. If you decide to do this, check any potential lets have good fast internet. Cutting your rent will definitely help save for a house deposit fast.
5. How economical is your car?
Cars are a major expense and their value represents a huge chunk of your deposit! Many couples have two cars – do you? Are both cars essential? If you can make do with one, sell the other and buy a bike. If you need two cars, can you downsize and buy smaller, reliable cars that are more economical to run? This may sound painful, but it is a temporary situation and you will be able to upgrade again soon!
6. Sell your unwanted kit
It is amazing how quickly unwanted kit accumulates! If you have an old PC, old mobiles, unwanted clothes etc., why not sell them online? Ebay is the perfect way to do this and you will be amazed how quickly things go! Weekends are the busiest time for the site. Gumtree and Facebook Marketplace are good alternatives.
7. Buy second-hand
Although you have pledged not to buy any luxuries while you save hard, it is inevitable that something could go wrong with something as important as your laptop or you maybe you need a piece of furniture. To lower your financial outlay, consider buying second-hand as this makes everything far more affordable. There are companies specialising in reconditioned laptops and mobiles, which they sell for good prices and often with a warranty. Furniture and home appliances can be bought at prices 50% less than if they were brand new and you will be able to sell them for what you paid for them in the future. Charity shops PAP Test all electrical appliances for safety before they put them on sale.
8. Earn some extra money
To help reach your goal sooner, consider getting a second job for the short term. Your skills are needed by others! You can work as a freelancer doing what you do as your main job. Check your contract to ensure that your employer has not stated that you cannot do the same work outside of their company – such as a car mechanic for example. There are many other second jobs you can do including working in a supermarket, in a pub or restaurant or writing and editing. Before you commit yourself, calculate whether your extra earnings will affect the amount you currently pay in tax.
9. Consider climbing on the property ladder on a lower rung!
Although in your heart of hearts, you want a certain type of property in a certain location, it may well be worth buying a smaller, more modest property if it means that you can get on the property ladder sooner. Don’t discount this idea straight away, because it could work to your benefit – especially if you can find a cheaper property that needs doing up. If this is something you could do, you would then be able to sell it at a profit and this would enable you to buy the house of your dreams.
10. Award yourself a holiday!
This might sound crazy, but it isn’t really! Saving hard can be hard work and stressful- especially if you have curbed your leisure spending. After endless months of lockdown, most people are wanting to escape and travel. You can do so too, but on a strict budget! Holidays in the UK are fun (weather permitting!) and camping, caravans and small cottages can all be cheap to rent. Flights abroad are at bargain prices this year because of travel restrictions. If you can pick up tickets for somewhere cheap and book some self-catering, you will be able to buy food in the local markets and this can be cheap and great fun.
Hopefully, our suggestions have encouraged and inspired you to save for a house deposit fast. There is nothing quite like stretching out on the sofa and proudly saying ‘this in OUR home, happy saving!
