With the government’s development of the Help to Buy scheme, the prospect of owning a home is a slightly more feasible prospect for many people looking to invest in their first property.
Whilst no longer throwing money away on rent and instead paying off a mortgage of your own is a satisfying step for most people, getting there can be a long, frustrating process. Trying to save for a house deposit whilst still paying your existing rent to keep a roof over your head is draining on your bank balance to say the least, but there are ways to make it easier.
Help to Buy ISA
Alongside the Help to Buy scheme, the government has released a Help to Buy ISA (Internet Savings Account) to help you save for a deposit. It’s available through banks and building societies and when you use the savings you’ve collected in the ISA to buy your first house through Help to Buy, you’ll receive 25% of the money you’ve saved, plus any interest you’ve collected. More information can be found in this guide from House Network.
Cash Gifts
Rather than receiving physical gifts for occassions like birthdays and Christmas, it’s a good idea to ask family and friends to contribute the equivalent in cash to your mortgage deposit fund. They’ll be contributing to your future home rather than gifting you items that you don’t really need at this time in your life. This is especially helpful if you’re paying rent and finding it hard to save a large chunk of money each month.
Direct Debit to Your Savings Account
On the day that your salary goes into your bank account, set up a direct debit to transfer a set amount into your savings account each month (no matter how large or small). This means that your mortgage deposit savings will come out of your salary each month before you even get chance to see them, and you’ll eventually just come to see this deduciton as a monthly necessity, much like tax or rent.
Max Your Savings Account
If you’re not eligible for a Help to Buy ISA, then ensuring your savings account is adding as much interest as possible to your money is incredibly important, and can help you see your savings grow a little more quickly than they would otherwise. Whilst interest rates on bank accounts aren’t what they used to be, there are some savings accounts out there that are better than others. Check out Money Saving Expert for the most up-to-date interest rates on UK bank accounts to ensure you open the right one.
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