How to save for your first home

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WITH prices higher than ever before, it’s incredibly difficult to buy a property for the first time. According to the November 2022 House Price Index, houses in the UK have seen an annual price rise of 10.9% and now sit at £315,073 on average. 

Not only are these price points inaccessible to many working individuals, but they’re also higher than the minimum prices covered by certain savings initiatives. With a long wait expected for prices to fall, prospective first-time buyers must focus on finding effective ways to save for a deposit.

Saving for a deposit: Our top tips

Cut your daily expenses

Even if you’re privately renting, it’s still possible to save on a day-to-day basis. For example, if you usually feel inclined to go and buy a hot drink from your favourite high street chain, why not consider making one at home instead? Spread across a working week, this simple reduction could save you at least £50 each month.

Be a savvy saver

If you’re trying to save for a house, it’s important to take it seriously. Your first step should be setting up a savings account and making sure that you don’t dip into it whenever you feel like buying something new. For example, a cash ISA could help you to start saving more and earn tax-free interest at the same time. 

Use helper apps

Another useful way to keep a closer eye on your income and spending habits is to install and use a purpose-built budgeting app. Even though signing up does mean giving your details to a third party, they can utilise it in several ways to give you a clearer view of your finances and help you to organise them effectively. 

One of the most popular choices is Emma, an app that provides spending summaries, analytics, and budgeting graphics too. 

Keep your bills low

Despite the ongoing cost-of-living crisis, it’s still possible to save money on your energy bills. Try not to use appliances for longer than you need to, and if you think you’re not getting the best value for money, it might be worth comparing tariffs to see if you could get a better deal from a different energy provider.

Check if you’re eligible for support

Did you know that it’s possible to find government grants provided specifically for those struggling with a low income? Whether you’re in between jobs or you’re facing other difficult circumstances, you might be eligible for a financial contribution to help you. 

For example, if you’re a full-time student and another adult depends on you financially, you could receive an annual grant that does not need to be paid back.

Consider new living arrangements

Moving into a shared house could be the most economical option. Generally, utility bills like gas, electricity, Wi-Fi, and council tax should be included in the monthly rent, helping you to save a few hundred pounds every month.

Ultimately, being able to live alone or with your partner could be the most sustainable living arrangement for you. However, if you’re willing to try something different, you could save more than you’d think.

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