You need £17,000 for a first home - here's how to save it - BBC News
By Kevin Peachey, Cost of living correspondent
If buying your first home is the finishing line, then saving up the money to get there is a marathon. The "Your First Home" scheme, announced on Saturday, aims to help first-time buyers in England get on the housing ladder with a small deposit.
Currently, a 5% deposit on the average UK house price of £272,000 plus moving costs and legal fees - will set you back about £16,850, according to financial information service Moneyfacts. That's daunting, but here are four ways that experts say you can at least make a start on saving for a deposit:
-
Make saving like a bill: Depositing an amount you can afford into a regular savers account the day after you are paid is a good way to start, suggests Anna Bowes, savings expert at financial advisers The Private Office. "It becomes like another bill, but one that you can benefit from in the future," she says.
-
You could get £1,000 a year: You can save up to £4,000 a year in a Lifetime Individual Savings Account (LISA) and the government guarantees a 25% bonus. So, if you put the full amount in then the government will add £1,000 a year. But there is a catch; has left some people out of pocket.
-
Start early: The earlier you start saving the more you can build up thanks to the magic of compound interest. In short, interest is added on a larger and larger pot as time goes by. Bowes says that saving £50 a month from the age of 20 would give you about £41,000 in 30 years' time when you hit 50, assuming interest of 5% is paid annually.
-
Save less: An increasing number of lenders are offering mortgage deals with little or no deposit required. David Hollingworth, from L&C, points to mortgages that have deposits starting from £5,000 and allow people to borrow up to 98% or 99% of the property purchase price.