Raising a deposit to get on the property ladder can feel like a monumental task – particularly as official statistics show the average UK house price in September was £234,000.
And one stepping stone for first-time buyers – the Help to Buy Isa – has now closed to new savers.
Existing account holders can keep on saving into them until autumn 2029, however. The accounts also offer savers a bonus, which must be claimed by December 1, 2030.
Sam Mitchell, chief executive of online estate agent Housesimple.com, says: “The Help to Buy Isa provided a great stepping stone for first-time buyers looking to start saving.
“While aspiring home owners could now instead opt for the newer Lifetime Isa savings product, those serious about buying in the not too distant future will need to consider sticking to a strict savings plan.”
If you, or your grown-up children or grandchildren, are looking for other ways to potentially build a deposit faster, here are Mitchell’s tips…
Make saving a regular habit
Breaking down what you need to save into more achievable goals will make it feel more realistic. Rather than just saying you need to save over £20,000, for example, aim to save in bite-size chunks each month – or break it down further and save weekly.
Micro-saving lets you put money away without even noticing it’s gone. Several savings apps specialise in round-ups, meaning every time you spend, they round up to the nearest pound (or however much you want) and put it straight into your savings.
Cutting back on some spending habits could help. Look through your regular subscriptions and decide if you are really making use of them. Cutting back doesn’t have to mean missing out on life’s little luxuries either – for example, switching to a cheaper energy supplier or phone company are ‘pain free’ ways to save money.
Sell, sell sell
In the run-up to Christmas, sell any of your unwanted items.
Cut your rental costs
Renting on your own can make it very difficult to save for a deposit. If you could survive moving elsewhere or sharing with housemates, even if it’s for just six to 12 months, it might help you reach that final goal sooner.
If moving back home is an option, it could really boost your savings.
A few other points…
In addition to Mitchell’s tips, first-time buyers, whose parents have some spare cash they’d be willing to tie up in a savings account for a while, may be able to get a “no deposit” mortgage.
Barclays’ “family springboard” mortgage allows parents to put 10% of the property purchase price into a savings account, which is then returned after five years, with interest which tracks at a margin of 1.5% above the Bank of England base rate.
Lloyds Bank has a similar “lend a hand” mortgage, with 10% of the price put into a savings account for three years, with 2.5% fixed interest.
Lifetime Isas also carry a Government bonus. But with Lifetime Isas, a 25% charge may apply if you withdraw cash for a reason other than buying your first home or your retirement.
For more information about the Lifetime Isa, see gov.uk/lifetime-isa