If you want to buy a home in London, you’re going to have to save a deposit. Most people try to pay at least 10% of the value of the home they want to buy, which equates to tens of thousands of pounds.
It’s a tall order, but one that you will have to meet if you want to buy your own home. Here we are going to offer you some useful tips so that you can get your deposit saved faster.
Stop Renting
Yes, it can be tough. Moving back in with your parents after living on your own always feels like a step backwards. There are no two ways around it.
However, there’s also an old saying that goes something along the lines of “sometimes you have to take a step back to take two steps forward.” That’s what’s happening here. Moving back home means that all of the money you used to spend on rent can instead go into a savings account. That money will soon build up, to the point where you could easily find yourself with over £10,000 saved by the end of the year.
Yes, you’re going to have to grin and bear it for a couple of years when you move back home. But it will be worth it in the end.
Cut Out Unneeded Expenditures
This seems like such an obvious tip, but you would be surprised to find out how much you spend on things you don’t really need.
Collect every receipt for what you spend your money on over the course of a month, then make a list of these expenditures. From that list, you can decide which ones you really need to be spending money on.
That gym membership that you never use? That can go. The same goes for any other clubs or associations that you maintain membership to but never visit. They may seem like little things on their own, but you’ll soon find that the money you save starts to build up.
Take on a Tenant
What if you already have a home and you want to save money for a new one. The equity in your current home may not yet be high enough to cover the deposit because you’re making a significant upgrade.
If that’s the case, you can consider taking on a tenant. You’d be surprised how much people will pay for a bedroom and access to the rest of the property. In fact, you may find the money covers most of your current mortgage, which allows you to save more each month.
Use the Help to Buy ISA
We’ll get this out of the way and confirm that the Help to Buy ISA will only be relevant to you if you haven’t bought a property before.
Assuming that’s you, there’s no reason why you should use it. Not only do you get a higher interest rate than you will with most other ISAs, but you can also access up to £3,000 from the government, depending on how much you save.
