9 ways to reduce spending and save for a deposit
- Credit: Alertr/PA
The UK’s housing market has been booming in recent weeks. According to Office for National Statistics (ONS) figures, the average UK house price leapt by £20,000 in the year to February.
According to Zoopla, nearly £150 billion-worth of home sales took place across the UK in the first 15 weeks of this year – a significant increase compared with 2020 and 2019.
And according to NAEA (National Association of Estate Agents) Propertymark, 16 per cent of homes sold in March went for over the original asking price – the highest proportion since 2014.
While this may be great news for existing homeowners, it makes life tougher if you’re trying to get on the property ladder. Although encouragingly, over a quarter (27 per cent) of sales in March were made to first-time buyers – the highest figure since June 2020, according to NAEA Propertymark.
And to give first-time buyers a new lifeline, a range of new 5 per cent deposit mortgages have just been launched by several big high-street lenders, as part of a Government-backed scheme.
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If you’re facing the challenge of buying a home and need to cut back on your outgoings, here are some suggestions from Andy Barr, personal finance expert and co-founder of online price tracking website alertr.co.uk…
1. Stick to a budget
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It can be hard, but try to stick to a budget each month by working out what you can live on, and then save the rest. If you put the money you want to save into a separate account straight away, you can act as if it was never there – so what you are left with is what you have for the month and that’s it.
It will also be good practice for when you get your own place and adjust to paying regular mortgage payments and other bills, as well as household maintenance.
2. Buy what you need, not what you want
Next time you go to buy something, ask yourself if you really need it, or if you just want it. Don’t waste your money on purchases you’ll regret later.
3. Walk, don’t drive, when you can
This is not only good for the environment but it will save you a lot of petrol money and will give you a free workout.
4. Ditch holiday plans for now
While it’s tempting to book something to look forward to, think about putting the money towards your new home instead. Once you are settled in, you can book a holiday to celebrate.
5. Make small spending sacrifices
These only have to be temporary, until you’ve saved the money you need. Little savings will really help to boost your savings, and it will all be worth it in the long run if it means reaching that goal quicker.
6. Shop around for cheaper deals on your current bills
If you are renting somewhere or already paying bills, make sure you are shopping around for the best deals. Sometimes it’s easier to stay with the same provider, but savings can always be made so it’s worth comparing prices.
7. Write a list for your weekly food shop and replace branded items
When you do your weekly food shop, make sure you write a list, rather than trying to wing it. Check in your kitchen cupboards to see what you might be low on and only buy what is on the list. Try and also eat before you leave, as going shopping whilst hungry will only lead to you buying unnecessary food along the way. If you can, also try to buy unbranded items and this will save you a lot of money in the long run.
8. Consider moving back home, if you can
If you’re renting and your savings aren’t growing, it may be worth considering moving back into the family home for a while, if that’s an option for you. Hopefully your parents won’t charge you the same that you’d normally pay to rent!
9. Find free things to do
Saving money doesn’t mean you have to be bored all day. Think about activities that won’t cost you anything, whether that’s walks, picnics or bike rides. There may also be online groups and activities you’re interested in.
You could also look up any upcoming free events and activities – and you might be surprised about how much has been going on in your community this whole time.