How to Save for a House Deposit Whilst Renting

If you are renting a home, then it’s likely that your rent payments will be your single highest outgoing each month. It’s natural to feel like saving for a house deposit whilst renting is difficult – but we’re here to help. Because with Newcastle Building Society, getting onto the property ladder and buying your first home may be so much easier than you think.

Rent prices in the North East may be among the lowest in the UK at an average of £495 per month, but making the leap from renting to buying can still feel a little intimidating. In this blog we’re going to guide you through our simple steps to start saving for a house deposit – so you can begin your exciting journey towards becoming a first time buyer.

Step 1 – Getting started

It’s pretty tricky to save for a deposit when you don’t know how much you need to save. So, to get the ball rolling, you should work out what your house deposit savings goal should be. This doesn’t need to be an exact figure – you can get a good idea through conducting research into the average house prices for the area in which you’d like to buy.

A required deposit for a new home can start from just 5%, but don’t forget that you’ll need some extra money on top of this to cover the other costs of buying a home such as solicitor’s fees and homebuyer surveys. So, it’s important to do your research and have savings targets in place. This way you can make sure you’re always on track.

Step 2 – Cutting back to save more

Cutting back on your spending in order to save money is never an appealing prospect. But in the long term it’s well worth it, and it certainly doesn’t need to mean making dramatic changes to your lifestyle. So where could you begin?

  • Reduce unnecessary daily spending by taking your own lunch to work as often as possible – try prepping your meals for the week ahead on your day off, if you have time. Occasionally, swap a night out for a cosy night in and save the money that you would have spent.
  • If this is an option for you at this time, your living costs can be dramatically reduced by renting in a shared house, moving in with your parents, or relocating to a cheaper area. We appreciate this isn’t always feasible, so if you can, try reducing your grocery shopping spends, and limiting your energy usage to cut back on bills.
  • Get a hold of some extra cash by selling some of your unwanted belongings – after all, when was the last time you cleared out your wardrobe? Perhaps you could also find some part-time or freelance work to do in your free time, too, if your skills are suitable.

We understand that budgeting to save money is challenging. But over time you’ll soon find it to be a rewarding process, particularly when you’re putting away money for a house deposit! For more advice on saving money, why not read our blog post on budget planning to help you effectively manage your finances.

Step 3 – Saving Options

There are plenty of savings accounts designed to support prospective buyers as they make the initial steps towards owning their first home. Here at Newcastle Building Society we offer the Newcastle Help to Buy: ISA, with which you’ll receive a tax-free bonus of 25% (of up to £3,000) from the government when you use your savings to buy your first home.

We also offer the Newcastle First Home Saver, which rewards first time buyers by providing a bonus of up to £1,000 when you go on to take out a mortgage with the Newcastle Building Society.

 

Making the leap from renting to buying is a big challenge, but it’s definitely worth it! We hope you found this blog post useful, but for more advice on making the first step onto the property ladder, take a look around our First Time Buyers Hub. Should you have any questions about savings accounts with Newcastle Building Society, then one of our qualified Savings advisors would be pleased to speak with you. Call us now on 0345 734 4345, or book an appointment at your local branch.