How to Save for a New Home While Renting

How to Save for a New Home While Renting

May 22, 2017

How to Save for a New Home While RentingWhile it has become more difficult in recent years, many of us still dream of owning our own property. If you are currently renting and trying to raise a deposit to buy a home, there are plenty of ways to save money and build up those finances for the future.

  1. Choose the Right Rental Property

The biggest outlay that most of us have is either a mortgage or the monthly rent we pay. With the average rent across the UK now over £800 per month, it’s imperative that you find the right property that gives you the leeway to save. Obviously, this will depend on your location and who will be contributing to paying the rent but keeping the costs down as much as possible is going to be key. That includes accounting for all the other aspects of daily living including bills and travel expenses.

  1. Commit to Saving

It might sound simple, but you need to commit to saving for the deposit for your home. This is a substantial amount of money and, in many cases amounts to 10% of the value of the property that you may be considering. To be successful, you need to be focused on achieving your goal – that means you must know how long it’s going to take and what hardships you might face as you start to save.

  1. Review Your Finances

The next step is to review your current finances and how you are managing your money. There are plenty of online resources you can use to get a clearer picture of what you have coming in and, more importantly, what’s going out. If you want a cheaper option, a simple spreadsheet will do. A review of your finances and your spending habits will give you an idea of what is possible. It will also help you to spot saving opportunities and change.

  1. Be Realistic

The key to saving well is to be realistic. Pulling together the deposit for a home is a significant undertaking and will undoubtedly take longer than you think. The key is to find ways to save money and put it away for the future – something that not everyone is good at. Be certain that you can meet your monthly target. One good idea is to open a savings account where you can deposit the money and keep it out the way of your main spending.

  1. Finding Ways to Save

There could be plenty of ways to save money if you look at your current spending habits. Some of these are small, others are quite big. The key is to find every opportunity to save and maximise your finances.

  • Be frugal with your weekly shop. Most of us tend to spend too much when we go to the supermarket. Set a budget and plan your meals rather than going to the store without an idea of what you are going to buy.
  • Swap utilities and services such as TV subscriptions to get cheaper deals and you could save hundreds of pounds a year.
  • How do you travel to work? Do you live close to work? Travel expenses are another big outlay that we have to deal with. A review of how you get around can bring good savings.
  • Pay off any existing credit cards or loans so that they are not a factor in your savings plan and don’t get in the way.
  • Invest in a Lifetime ISA. This is a new government initiative which enables you to save and get a 25% bonus if you are saving for a new home.

Northwood is one of the largest and most recognised estate agents in the U.K. and the leading supplier of Guaranteed Rent

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