Five ways to save for a deposit on a home
Wondering how to get on the property ladder? From micro-savings to Lifetime Isas and even having a selling spree, Vicky Shaw looks at the options
Raising a deposit to get on the property ladder can feel like a monumental task, particularly as official statistics show the average UK house price in September was £234,000.
One stepping stone for first-time buyers, the Help to Buy Isa, is set to close to new savers from the end of this week.
Some deals are even closing for new applications before the official November 30 deadline.
Existing account holders can keep on saving into them until autumn 2029, however.
The accounts also offer savers a bonus which must be claimed by December 1, 2030.
Sam Mitchell, chief executive of online estate agent Housesimple.com, says: "The Help to Buy Isa provided a great stepping stone for first-time buyers looking to start saving.
"While aspiring home owners could now instead opt for the newer Lifetime Isa savings product, those serious about buying in the not too distant future will need to consider sticking to a strict savings plan."
If you think a Help to Buy Isa might be for you, you'd better grab one fast.
However, if you miss the boat with a Help to Buy Isa, or you're looking for other ways to potentially build a deposit faster, here are Mitchell's tips...
1. Make saving towards your goal a regular habit
Breaking down what you need to save into more achievable goals will make it feel more realistic. Rather than just saying you need to save more than £20,000, for example, aim to save in bite-size chunks each month, or break it down further and save weekly. When you see your savings grow, it's easier to keep going.
2. Embrace 'micro-saving'
Micro-saving lets you put money away without even noticing that it's gone.
Several savings apps specialise in round-ups, meaning every time you spend, they automatically round up to the nearest pound (or however much you want) and put it straight into your savings.
3. Cut back
While your cravings for flat whites from your local coffee shop may not be the single reason you're not yet on the property ladder, cutting back on some spending habits could help.
Use budgeting apps to see where you could be making savings.
Look through your regular subscriptions and decide whether you are really making use of that gym membership, for example.
Cutting back doesn't even have to mean totally missing out on life's little luxuries either. For example, switching to a cheaper energy supplier or phone company are pain-free ways to save money.
4. Sell, sell, sell
In the run-up to Christmas, look to sell any of your unwanted items, as lots of people will be browsing the internet for items to buy.
An added bonus is that you'll have less to move when you do eventually buy - and some of the cash could go towards decorating your new place.
5. Cut your rental costs
Renting on your lonesome can make it very difficult to save for a deposit.
If you could survive moving elsewhere or sharing, even if it's for just six to 12 months, it might help you reach that final goal sooner.
If moving back home is an option, it could really boost the amount you are saving. It is worth discussing whether your family would agree to you paying mates' rates on rent and helping out on bills and chores.
- For more information about the Lifetime Isa, see gov.uk/lifetime-isa