First homes. Everybody wants them but obtaining them can be an extremely long and arduous process. As most first-time buyers are young, their salaries will reflect that which makes saving for a mortgage extremely tough. Saving for a house involves many sacrifices but in the end, will be worth it.
House prices have been rapidly rising over time and have reached an all-time high of £270,708 as of November 2021. This means people are having to save a larger deposit to get a mortgage and then their mortgage repayments will also be higher thus making first homes harder to gain access to.
Saving enough for a mortgage, however, is only getting more difficult thanks to the rising cost of living that the whole world is currently enduring. The UK itself is dealing with rising gas and electricity bills as well as higher tax payments.
With all of the negatives surrounding the cost of living and housing prices, it may seem like that first home is completely out of reach. However, when you use the right money-saving tactics, you’ll realise it’s not quite as far away as you initially thought.
Here are some useful tips for saving for your first home.
Set realistic expectations
Saving money is a long-term plan which is why you must be realistic with your goal setting. Ensure that you put aside an amount that you can consistently afford or you will be left disappointed should you not meet that target.
This disappointment can be extremely unmotivating to your saving plan and could lead to further saving errors down the line. Be strict with your saving but more importantly, be reasonable.
Cut down on everyday spending
One of the best ways to save is to simply cut down on your spending where possible. Think about buying cheaper alternatives, avoiding nipping out to the shops for a late-night snack, cooking at home more or purchasing fewer unnecessary items.
One other thing that can be done is cutting down on subscriptions. This could be a streaming service like Netflix which many people are beginning to do amid rising living costs.
Open a savings account
There are many different savings accounts that you can open and each of them offers benefits of its own. You could open an everyday savings account where money can be deposited and withdrawn as and when it is needed or you may opt for a tax-free ISA which is a great way to save money whilst earning tax-free interest.
This list only begins to scratch the surface of possible ways to save money for your first home. Be sure to follow these tips and get those keys sooner than expected.
