Renting is very expensive, especially in the UK, and it typically is the largest expense you will face in your lifetime. Add that to the average cost of running a house and we can say that it is a large hole to climb out of.
I also believe it is fair to say that no one wants to be renting forever, paying off someone else’s mortgage. More so if you had to delve into your savings last year to pay rent, eating away at your deposit pot.
“20% of households had to use savings to pay their rent or mortgage in 2021, with renters being more likely to use it than homeowners”English Housing Survey, 2020-21
Within this article, we will give you 11 of the best ways to save for a house deposit, tried and tested by us! We used many of these tips to save and buy our own house back in 2017! 4 years later and we are looking to remortgage mid- 2022
Before starting to save money for a mortgage deposit, you must ask yourself the following –
- How much money do you have saved currently?
- What is the minimum mortgage deposit you need?
- Do you know all the associated costs of buying a house?
- Do you have a set timeframe to buy a house?
- Have you asked yourself whether you should even rent or buy?
Best ways to save for a house deposit
Once you have the answers to the above, you can start to craft your savings plan with the below tips:
1. Say no to parties
Research has shown that an adult of Britain spends an average of £65 on a night out. Combine that with the total number of nights out a typical UK adult attends (i.e. 1,975), you get £118,500! That’s a considerable amount of money where you could even buy a property for that alone in certain parts of the UK.
If you want to save for that deposit, this is a big one to hit. You should at least cut back if you can’t say no completely.
2. Cancel holiday plans
After the past two years that we have had, this may either be an easy one or a hard one. If like me, you have now become OK with not going on holiday multiple times a year, you will find it very easy to save money on your holidays. But if you are like my partner and are it itching for holiday normality, it will be tough.
£3,000 is a substantial amount of money and is 12% of a deposit for a house, based on the UK average of £268,000.
3. Sell unused/unwanted items
Go through the garage, shed, loft, drawers with weird bits in, your closet, and any other crevice in your home and sort the things that you need and still use. Everything else you should consider selling and adding that to your mortgage deposit. There are so many sites that you can use too, such as eBay, Gumtree, Depop, Facebook Marketplace, Preloved, etc, so you will certainly find a buyer for all your unwanted bits.
4. Rent a smaller flat
As mentioned at the beginning of this post, the rent you pay is likely your largest expense. Therefore, if you are looking to save over a couple of years, you should consider renting a smaller flat or house. You will have to adjust and manage things for a while, but it will be worth it. Before you do so, consider the fees you will need to pay when moving (e.g. rent in advance, agency fees, etc) to ensure it is worth it.
If you can’t find a cheaper place or are already in a small flat, you should consider this next point.
5. Move in with family/friends
If can’t rent a smaller place or can’t find any cheaper locations, consider moving in with family or friends if you can. I moved in with my partner’s parents for two years and managed to save 80% of the deposit needed.
I know it is a tough thing to do, but I promise it is the best way to save fast. Just keep in mind that it will likely only be for 1 – 2 years and focus on the end goal – Your own place.
6. Sell your car
Working from home is a growing trend across many sectors. If you are in the fortunate position to take advantage of this, you certainly should. And if you have a car and used it mostly for commuting, you should consider selling it. Not only will you get money from selling your car, but you also save money on the car running costs, such as full servicing, fuel, car insurance, or any finance payments.
However, should you rely on your car, then we would suggest skipping this.
7. Push for a promotion at work or switch jobs for a higher salary
One way to save more money is to have more money, right? Ask your manager or HR department if there are any promotional opportunities within your company. Be it if you can move departments or if you can take a step up in your current, it is always worthwhile asking.
If you can’t get a pay raise at work, consider looking for a job at a different company.
8. Ask for money instead of a gift
We often get asked by family and friends “what do you want for your birthday/ Christmas?”, and we always seem to say nothing or give ideas on things we don’t even need. Let them know that you are trying to save for a deposit and ask them to give you the money instead.
And if your family and friends feel weird about giving you money in hand, ask them to transfer it directly into your savings account.
9. Cut down expenses
The average UK household wastes £9,000 a year on expenditures that they do not need. And if you are one of these average households, it’s time to cut these wasted expenses. You should list all your outgoings and then start trimming those you do not need.
We have listed several ways you can cut expenses and reduce your monthly outgoings here.
10. Put together a list before you go shopping
If you are anything like me, I tend to forget to write a list before I go shopping and end up putting many things into the trolley. We often buy things that we don’t need just because it is there or you think you need it, but actually don’t! So, before you go shopping, rummage through the cupboards and fridge and see what you need? You should also look into the different times that supermarkets reduce their prices.
Read next: How to save money on groceries.
11. Do a part-time/ freelance
You can also start doing some part-time work like babysitting, social work, teaching, etc. There are so many ways to make money in your spare time. The money you will earn by doing freelancing or part-time work can be put into your house deposit pot.
By following the above, you will have your mortgage deposit in no time!
James Banerjee is a Senior Account Manager who graduated from the University of Kent in 2014. He works in SEO on clients such as HSBC UK and Nestle and he has a keen interest in personal finances and money-saving advice.