Sophie Dwyer from West Brom Building Society shares some tips on how to save for a house deposit by breaking it down into six bitesize steps.
If you’re trying to save for your first home, you’re not alone and you’re definitely not the only one finding it tough. In fact, more than half of would-be homeowners say getting the deposit together is the biggest hurdle. So, if you’re staring at your bank account wondering how on earth you’ll get there, take a deep breath. There are several ways you can leverage your finances and start building up your savings without giving up everything you enjoy.
1. Set your goal
Before you start saving, you need a rough idea of how much you’ll need. Most first-time buyers aim to put down at least 5 –10 percent of the property price. For a £200,000 home, that’s between £10,000 and £20,000. It might sound like a lot, but once you’ve got a number in mind, you can break it into smaller chunks and plan how to get there.
2. Make the most of a Lifetime ISA
If you’re aged 18 to 39, a Lifetime ISA (or LISA) can give your savings a nice little boost. You can put in up to £4,000 a year, and the government will top it up with a 25% bonus, up to £1,000 a year, for free. Just make sure the money goes towards your first home, or you could lose the bonus.
3. Save straight after payday
One of the best things you can do is set up a standing order so that some of your wages go straight into savings as soon as you get paid. It doesn’t have to be a massive amount, just something regular. That way, you don’t miss it (or spend it) and your deposit pot starts to grow without you really noticing.
4. Cut back where it counts
Nobody wants to hear “stop buying coffee”, and honestly, it’s not about cutting out all the fun stuff. But most of us are spending money on things we don’t even use or enjoy. Start by checking your subscriptions, reducing food waste, or switching to own-brand groceries. A few small swaps can make a big difference over the year.
5. Sell what you don’t use
Most of us have stuff lying around that we’ve forgotten about such as old phones, clothes, even furniture. Selling it on sites like Vinted, eBay or Facebook Marketplace can give your deposit fund a quick boost. And if you’ve got a hobby or skill you could turn into a side hustle, even better.
6. Break your goal into mini targets
Saving up a big deposit can take time. So don’t just focus on the big number. Set smaller goals along the way and celebrate every £500 or £1,000 you save. You’ll feel like you’re making real progress.
Final thought…
Saving for your first home isn’t easy, especially when prices keep climbing. But it is possible, and every step you take, and every £1 you put away, brings you closer.
So don’t be put off by the size of the goal. Start small, stay consistent, and, remember – you’re not alone.
