I'm a mortgage expert - here are my 10 top budgeting tips to save for your first home deposit

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Inflationā€™s rising, but with smart planning, your dream is closer than you think šŸ”
  • Buying a home is a significant financial milestone requiring discipline and determination
  • Inflation at 2.3% adds pressure to everyday expenses for aspiring first-time buyers
  • The average deposit for first homes in the UK is Ā£53,414, with most relying on savings
  • Couples without children make up 40% of first-time buyers, according to a 2024 report
  • Research shows women are more likely than men to forgo luxuries to save for a deposit
  • Mortgage expert Jo Pocklington offers insights to help buyers achieve their homeownership goals

Buying a home is one of the most significant financial commitments many Brits will make in their lifetime.

But saving for that crucial deposit requires both discipline and determination.

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With inflation climbing to 2.3%, managing everyday expenses remains a constant struggle for the hundreds of thousands of Brits striving to take their first step onto the property ladder.

According to a 2024 report, two in five (40%) first-time buyers in the UK are couples without children, with the average deposit for their first home reaching approximately Ā£53,414.

The report also found that the majority (87%) of first-time buyers relied on personal savings as their primary source of funding for deposits on the 748,000 homes purchased between 2022 and 2023.

Interestingly, new research from Purplebricks Mortgages suggests women are more willing than men to sacrifice luxuries to save for a deposit.

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Mortgage expert Jo Pocklington, who has 23 years of experience helping aspiring homeowners secure their dream homes, shares her top 10 tips to help house-hunters move closer to achieving their goals.

(Photo: Pexels)(Photo: Pexels)
(Photo: Pexels) | Pexels

Budget planner

ā€œA great way to keep on top of your spending is to use a budget planner to see where all of your monthly spending goes and review each item separately.

ā€œThis will give you a clear insight into your outgoings and how much you have to save, plus any areas where you could reduce your spending.ā€

Reduce your rent

ā€œThis is likely to be the single biggest outgoing each month. Could you downsize? Move back in with your parents? Take in a lodger? Or take a room in a house or flat share?

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ā€œRemember it is temporary, and to keep your ultimate goal of buying a house in mind.ā€

Review subscriptions

ā€œIt is all too easy to sign up for free trials and it is even easier to forget to cancel them within the timeframe.

ā€œIt might have been something people were very keen on at the time, but now may not use it enough to warrant the fee, which if you donā€™t keep a close eye, is also likely to increase every year, without you being aware.

ā€œA simple way to do this is to use online banking or contact your bank to review your direct debits and standing orders.

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ā€œBoth Apple and Android phones allow you to review the subscriptions youā€™ve made through your device - remember, these can be taken from whichever card is associated with your phone, not necessarily the debit card linked to your bank account.ā€

Open a Lifetime ISA

ā€œThe government's Lifetime ISA scheme is a good way to save money and get more back than you put in. You can pay in up to Ā£4,000 a year. The government will add 25% to your savings, up to Ā£1,000 a year.

ā€œYou need to be between 18 and 39 to apply for a Lifetime ISA, but you can keep saving until you buy your home or until you're 50. Lifetime ISAs are available through most high-street banks.ā€

Review your debts

ā€œWhile it might seem easier to pay off the smallest debt to have one less to worry about, itā€™s important to review all credit commitments and pay off those with higher interest rates first.

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ā€œEven a small contribution to a debt with a higher interest rate, rather than paying off all of one with a smaller rate will help to reduce your ongoing debt costs.ā€

Shop around

ā€œUse supermarket loyalty schemes for discounts on your weekly shop, could you save by shopping at Aldi or Lidl?

ā€œCould buying in bulk keep costs down, using tinned or frozen produce rather than fresh? Another great way to reduce your supermarket spending is to plan your daily meals and only have on your list what is needed for the meals for the week.ā€

Set spending caps

ā€œWhen you are trying to budget it is easy to feel guilty when you have friends and family to buy birthday and Christmas presents for, but remember your end goal and agree on a spending cap.

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ā€œYour loved ones will understand, and they may be feeling the same way so they could equally be happy to agree on a present spending cap.ā€

30 day rule

ā€œSometimes the simplest ideas are the most effective. And changing your daily spending habits is key to saving for that all elusive deposit.

ā€œOne way I have found to be effective is something I call the 30-day rule. Before buying something non essential, ask yourself is it really necessary? If you held on for 30 days would you still want it?

ā€œBy giving yourself that time to potentially cool off, you will know if itā€™s something you really want, or if it was a momentary temptation that has passed, and instead you can put the money into your long term savings pot.ā€

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The 100 envelope challenge

ā€œDidnā€™t think saving money could actually be fun ? The 100 envelope challenge gamifies saving and if you stick to it, Iā€™ve found it can be a really effective money saver.

ā€œTake 100 envelopes and write the number 1 to 100 on them. This number is the number of pounds youā€™ll need to add to the envelope.

ā€œEach week, pick out two envelopes at random and put the amount shown on the front into them. In 50 weeks, you will have saved Ā£5,050. Make sure you deposit the money into your savings account regularly to avoid spending!

ā€œIf this seems too much to save in a year, you can number the envelopes from 1 to 25 instead.ā€

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Use a budgeting app

ā€œThere are now some great budgeting apps out there to help you manage your savings. And, some show you where you could be saving even more to achieve your personalised targets.

ā€œSome apps allow you to set spending limits such as Monzo or Starling, whilst AI powered money-saving app Nous, helps save you money on household bills.ā€

Weā€™d love to hear from you! What challenges have you faced while saving for your first home, and what strategies have worked for you? Share your thoughts, experiences and any tips you might have in the comments section.

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