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Buying a house in 2024 is looking increasingly less likely for a majority of prospective first-time buyers, as mortgage rates remain punishingly high alongside property values. While the stage is set for a price crash, the conditions are still hostile for those without the funds to clear a significant amount of their ideal home’s list price.
Of course, this doesn’t put house-buying completely off-limits. With all the big numbers swirling around, it can be easy to forget that all you need to take that first step is a sizeable enough deposit. But still, at at least 5% of a property’s value, getting that deposit can pose some difficulty! What are some key tips for raising that deposit?
First and foremost, any of your prospective savings need to have a home themselves. Trying to amass deposit savings in your daily spending account is a recipe for disaster, and can see you accidentally spending what you had mentally earmarked as savings.
If you are a first-time buyer, you would be a fool not to avail of government subsidy via a Lifetime ISA, or LISA. These offer a 25% bonus on top of savings up to £4000 per tax year. Of course, you’ll be saving more than this annually in an ideal scenario, making it also important that you have a more general savings repository to additionally benefit from bank interest rates. Between these two accounts, you’ll be racing towards your deposit goal!
Of course, the trick is in sourcing your savings. This is where the budgeting comes in; with a clear idea of what you’re earning and what you’re saving each month, you can isolate your disposable income, and hence areas where you are spending too much. One major area for overspending is household bills, particularly energy. With energy prices having cooled somewhat since the crisis of 2021-22, it is again possible to hunt for better tariffs between suppliers. This could free up hundreds a year for your deposit fund!
Saving isn’t not just a matter of savvy decision-making; it can also be smart. Here, though, ‘smart’ is referring more to your phone than your intuition! There are dozens, if not hundreds, of useful apps that can assist your savings efforts. Alternative banks can automatically siphon away cash for savings, such as ‘piggy bank’ systems where your card expenditures are automatically rounded up, with the change placed in another account. Budgeting apps, too, can make organising your savings efforts a trifling matter.
