Saving for your first home deposit is something to celebrate, but doing it while balancing a job, paying rent and maintaining a social calendar can feel challenging. The good news is that it’s not impossible. If you want to achieve homeownership quickly, we’ve put together some easy tips which could help you speed up saving your first home deposit.
Open a Lifetime ISA
Using government schemes is a simple way to expedite your savings as it reduces the pressure to save for a large deposit by yourself. A Lifetime ISA (LISA) is specifically designed to help first-time buyers save.
With a Moneybox LISA, you can deposit up to £4,000 and receive a free 25% added government bonus of up to £1,000 each tax year, completely tax-free! Over 227,600 first-time buyers have bought using a LISA and those with Moneybox LISA were able to buy over a year sooner than the average first-time buyer.¹
Govt. withdrawal charge may apply. ISA and tax rules apply. For Stocks & Shares LISA, capital at risk.
Consider Shared Ownership
Shared Ownership is another government scheme to help first-time buyers. A 2022-23 Gov.UK report showed that 30% of Shared Ownership buyers were aged 30 or younger, and 35% of Shared Ownership buyers are between 30 – 39 years old,² indicating that it’s now one of the most popular ways for young professionals to become homeowners.
Under Shared Ownership, you buy a percentage of the property, normally between 25 – 75%, and only take a mortgage on that share – think ‘part rent, part buy’. You still have to pay rent to a landlord on the percentage that you don’t own, and you need to check if your income qualifies for it, but it’s a viable option if you can’t afford full homeownership as you can get on the property ladder faster with a low deposit. Over time, you can buy more shares in your home through a process known as ‘staircasing’.
While this can help you get on the property ladder faster, it’s worth noting that paying a mortgage on your share and rent on the landlord’s share can be expensive.
Maximise regular savings
Once you’ve maxed out a Lifetime ISA, it’s worth exploring other high-interest savings accounts to boost your regular savings. We offer a range of accounts including tax-free ISAs and regular access savings accounts. Having another account can also help save for other aspects of the home-buying journey like solicitor fees or furniture.
ISA and tax rules may apply. Account T&Cs may apply.
Implement smart saving habits
Budgeting and sticking to a regular saving plan is a tried-and-true method to help increase your savings. We make it easy to save with your Lifetime ISA in a way that suits you. You can set up a weekly deposit, payday boost, make a one-off payment or turn on round-ups to save your spare change! Remember, you get the 25% government bonus on all savings.
There are plenty of realistic ways you can reduce daily outgoings – if you need to take public transport to work, then you can cut costs by bringing in homemade meals and coffee. Small switches can really reduce overall spendings.
You’ve got this!
By following these steps and making smart financial decisions, you could significantly accelerate your journey towards homeownership. Remember, every step counts, so start today and watch your savings grow. With dedication and the right strategies, you could be celebrating the keys to your first home in no time.
A 25% government penalty applies if you withdraw money from a Lifetime ISA for any reason other than buying your first home (up to £450,000) or for retirement, and you may get back less than you paid into your Lifetime ISA
Tax treatment depends on individual circumstances and may be subject to change in the future.
Remember: if you opt for the Stocks & Shares LISA, you’ll be investing, so your capital is at risk. All investing should be regarded as long term. The value of your investments can go up and down, and you may get back less than you invest.
¹Source: Moneybox research, Censuswide, August 2024.
²Source: Gov UK Social Housing Sales and Demolitions 2022-23: Shared Ownership report, June 2024.
