First Time Buyer
What’s the best way to save for your first home?

Getting your finances in order to save for a large house deposit, not to mention proving you’ll be able to make mortgage repayments, can feel considerably more overwhelming.

What’s the best way to save for your first home?

Saving for a home can feel very different from all the things that you’ve saved up for previously. After all, we’re not talking a few hundred pounds for a holiday or even a few thousand for a new car. Getting your finances in order to save for a large house deposit, not to mention proving you’ll be able to make mortgage repayments, can feel considerably more overwhelming.

That’s why we wanted to share our experience when it comes to saving up for your dream home.

How much money will you need to buy a house?

The first step towards reaching a savings goal is knowing what that goal is. That’s why you need to first calculate exactly how much you’ll need in the pot.

That will of course decide on what type of home you’re looking to buy, and perhaps even more importantly, where.

This list, provided by statista.com, provides a list of the average first-time buyer prices by region. And they’ve even done the maths for you, calculating how much a 5% deposit would be in each case. 

RegionAverage first-time buyer price5% deposit
North East£151,814£7,590.70
East Midlands£210,203£10,510.15
East of England£303,166£15,158.30
North West£189,588£9,479.40
South East£320,591£16,029.55
South West£252,263£12,613.15
West Midlands£209,270£10,463.50
Yorkshire and the Humber£177,683£8,884.15

You have the goal, now you need a plan

Once you know what you’re aiming for, you’ll need to sit down and think about exactly how you’ll get there. Saving for a house deposit is a long-term game. So it’s important you create a realistic plan, otherwise you’ll be setting yourself up to fail before you’ve even started.

Yes, we know you’re desperate to save up that money and buy that home, but you do have to live life in the meantime. This is one instance where slow and steady really does win the race.

Try a budgeting tool

There are tonnes of apps and budgeting tools available online, allowing you to see and keep track of all your incomings and outgoings. Sometimes the first step is simply understanding what your finances look like throughout each month.

If you have never set and stuck to a budget before, it might sound difficult and even a little bit boring. But keep the end goal in mind, treat this like an opportunity to start afresh and give it a go. When you sit down to look at what’s going out every month you might even find a few easy wins – that magazine subscription you’d forgotten about for example, or bills that you could consolidate and find a better rate. Get curious about what’s coming out and for each item ask, Do I need it? Could I be paying less? And you’ll soon find there is money there you didn’t even know you had.  

Save before you spend

If you found a bit extra in the step above, or even if you didn’t, consider committing to putting aside a small amount of money each month as soon as you’re paid. You could set up a direct debit into a savings account, so it’s gone before you even notice. This is a great trick to start mounting up a deposit without the temptation to spend it.

Consider making some lifestyle changes

Rather than making everything about money, try to reframe your thinking so it also benefits you in terms of health and fitness. You could start walking or cycling when you go out locally, rather than jumping into the car, for instance. Not only will you see a reduction in fuel costs, but you might see a reduction in your waistline too.

Why not replace those takeaways and meals out with healthier, and cheaper, store-bought meals instead? And get creative with some fun date night ideas at home, instead of always opting for an expensive night out on the town.

Rethink present buying

People will understand that when you’re saving for a house you have to prioritise spending. And very often you’ll find you’re not the only one who is keen to reduce their outgoings a little bit.

If you’re part of a group of friends who always splurges on gifts for one another, suggest a Secret Santa instead this Christmas, or propose going out for a shared meal and pay for the birthday guy or gal in lieu of pressies. Failing that, stick a limit on anything you’re buying. You’ll be surprised how creative you can get if you’re forced to find presents for under a fiver or a tenner.

And when it comes to presents for you, ask for practical things that you need – including clothes and shoes that you don’t want to spend money on yourself. People will be happy to help – and probably happy that they don’t have to come up with a present for you themselves. You’ll also reduce the number of unwanted presents you receive which counts as a win in our book. 

Ask for help when you need it!

Getting your finances in order is one of the biggest and most important steps towards buying your first home. That’s why it’s important to ask for help if you feel you need it.

Our mortgage advisers will be able to help you work out what you can afford and point you in the right direction when it comes to saving for your first home.

Your home may be repossessed if you do not keep up repayments on your mortgage.

By Michael Aldridge