Saving for a house deposit can be a challenge, but one money expert has shared how prospective homeowners can add an impressive £2,615 to their deposit within a year with “minimal” effort, using five relatively easy tips.
As of July 2024, the average UK home costs £289,723, meaning first-time buyers need at least £14,400 for a 5% deposit or £28,900 for 10%.
With the cost of living still high and the average annual salary around £35,830 (or £689 weekly), prospective buyers need to be smart with their finances. According to Tom Blake from Money Saving Guru, this may be “easier” than many expect.
Mr Blake said: “From switching bank accounts to renting out your spare room or garage, small changes in your daily routine and smart financial decisions can really add up.
“You don’t have to completely sacrifice your lifestyle either, just be a bit more strategic with your money. Before you know it, you’ll have saved an extra £2,500 to put towards your deposit.”
Open a Lifetime ISA – £1,000
Firstly, the savings guru suggests opening a Lifetime ISA. A Lifetime ISA (LISA) allows people to save up to £4,000 each year, with the Government providing a 25 percent bonus on top.
This means people can save up to an extra £1,000 annually towards your deposit, or £2,000 if they’re buying with a partner or friend.
Mr Blake said: “[LISAs] are perfect for first-time buyers who want to maximise their savings without going to the effort of investing.”
Switch bank accounts for bonuses – £800
Mr Blake said: “Many banks offer cash incentives to switch your account, ranging on average between £100 to £200.
“By switching accounts every new season you can easily accumulate up to £800 in cash bonuses, as well as any other perks like cashback or insurance.”
However, he warned: “Just make sure you meet all the requirements for each switch and avoid excessive credit checks too close to when you want to look at a new home as this can impact your mortgage application.”
Ditch some of the brands – £240
According to research gathered from the Office of National Statistics, the average Briton spends £1,628 on food at home.
However, Mr Blake said: “Swapping just half of your groceries to an own brand version could save you 15%. That means swapping your Kellogg’s for Tesco Cornflakes but keeping your Kenco coffee could net you an extra £240 a year.”
Cut meal deals, takeaways and dinners out in half – £275
In the UK, people spend on average £11 a week on eating out, including takeaways, meal deals and going to restaurants.
Mr Blake said: “That adds up to over £550 a year. However, you don’t have to go completely cold turkey – just half the amount of Starbucks or takeaways you get each month. You won’t miss out completely, but still reap the rewards, saving around £275 per year.”
Sign up for cashback sites or apps – £300
When looking to buy something online, Mr Blake urges people to check cashback sites or apps like TopCashback, Quidco or Airtime Rewards.
He explained: “These sites and apps offer you a percentage back on your online purchases, such as 2%on your online Boots order, or 4% at Morrisons. The amounts might seem small, but they can add up over the year with some users able to earn as much as £300 or more.”
Mr Blake added: “With just a few simple changes and without sacrificing all of life’s joys, you can easily make a sizable dent in your deposit with little to no effort. Combine your efforts with a partner or a friend and you could easily save up for a £15,000 deposit in just three years.”
