Experts have shared 12 money saving hacks that can help you save thousands of pounds for a house deposit. For many people, saving for their first house can be very overwhelming, with many obstacles to overcome along the way.
According to Zoopla the average UK house price is £264,900, which means even saving a 10% deposit seems like a big mountain to climb. However, online mortgage broker Mojo Mortgages has compiled 12 clever hacks that can help save you up to £7,130 towards your house deposit.
The money-saving hacks go beyond the 'obvious', with each "designed to help boost your deposit fund and fast-track your journey to becoming a first-time buyer'.
The strategies could save you an additional £7,130 per year on top of any direct savings that you set aside. It's important to note that the savings mentioned are potential estimates and may vary on individual circumstances.
While not every tip may suit your lifestyle, implementing even a few could make a difference in building up that deposit as a first-time buyer. In order of the biggest financial savings to the least:
12 hacks that can save you £7,130 towards your house deposit
Work from home two days per week - save up to £1,006 per year
According to Mojo Mortgages, a study conducted by business comparison website, Bionic, found that the average full-time office worker spends £95.48 per week commuting to the office and eating out during their lunch break. However, for those who work a hybrid role (2-3 days in the office), this figure reduces to £76.12, a saving of £19.36.
Over a year, this is a saving of £1,006. So, if you have the option of working from home a few days per week, this could help your deposit grow much quicker.
Set up a Lifetime ISA and receive up to £1,000 per year
A Lifetime Individual Savings Account (LISA) is a tax-free savings account in the UK that allows individuals aged 18-39 to save up to £4,000 per year towards their first home or retirement. The government provides a 25% bonus on the amount saved each year, up to a maximum of £1,000 annually - meaning if you save the maximum of £4,000, you’ll get an extra £1,000 from the government.
Switch your bank account to gain up to £1,000 for free
Many banks frequently offer cash bonuses of £100-£200 (or sometimes even more) to entice new customers to switch their current accounts. Money.co.uk will even do it all for you for free through its Current Account Switch Service.
There is no limit to how many times you can switch accounts and claim these cash bonuses. Bare in mind you just need to meet each bank's specific requirements like setting up direct debits, paying in a minimum amount, etc.
You should not that if you’re planning to purchase a property in the next six months, you should refrain from switching bank accounts during this period as multiple applications within a short timeframe may raise concerns with potential mortgage lenders.
Cut your eating habits in half to save up to £610 per year
According to Nimblefins, the average UK household spends £1,220 on eating out each year, which includes takeaways and dining at restaurants. Cutting this expense in half could save you up to £610 per year without having to give it up entirely.
Start a rotating dog walking service with your neighbours to save up to £585 per year. Many pet owners have to hire a professional dog walking service whilst they work, which costs an average of £11.25 per walk. Over a year, this amounts to £585 per year for one walk per week.
To eliminate this cost, you could consider speaking to your dog-owner neighbours and ask if they’d partake in a rotating dog walking service, where you take it in turns to walk each other's dogs, saving you the cost of hiring a dog walker.
Avoid branded food to save up to £538 per year
Did you know that switching from branded food items to generic or shop-own items could save you up to 30% of your food shopping bill? Given that the average person spends £1,793 on grocery shopping each year, a 30% saving would amount to £538.
Sell your unwanted goods to make an extra £341
Research by PayPal found that the average adult has an estimated £341 worth of unwanted items gathering dust around the home that could be sold for profit. Why not spend an upcoming day off work uploading your unwanted items onto a second-hand selling website.
Switch to a sim-only phone deal to save up to £321 per year
The mobile phone comparison experts at Uswitch uncovered that switching from a mobile and SIM deal to a SIM-only deal at the end of your contract could save you an average of £321 per year. The savings come from avoiding the higher monthly costs of paying off a new device as part of a traditional contract - so if your handset is working and you don’t feel the need to upgrade it to the latest phone, you could make a big saving.
Make a packed lunch to save up to £320 per year
Research by the job and recruitment website Reed found that the average person spends around £10.77 per week on a meal deal. However, making a homemade version of the same sandwich with crisps and a drink costs just £4.60. While a weekly saving of £6.17 may not seem like a lot, it amounts to an overall saving of £320.84 per year.
Use cashback websites to earn an average of £300 per year
If you're making a purchase, make sure to check whether the website is on a cashback website such as TopCashback or Quidco. TopCashback states that its average user earns over £300 per year in cashback on their regular online purchases.
Pay for your car insurance annually to save an average of £59 per year
If you can afford to pay for your car insurance annually, instead of monthly, this can save you an average of £59 per year. The savings come from avoiding the interest charges for paying in instalments.
Previous research also shows that the optimum time to buy your car insurance is 20-26 days beforehand so set a calendar reminder to do this to get the best deal too.
Install a smart meter to save up to £50 per year
According to research by The Behavioural Insights Team, a smart reader can save an average of 3.4% of electricity consumption, and 3.0% of gas consumption. For a medium-sized house (3-4 bedrooms), the average household spends £1,690 on electricity and gas bills per year. Therefore, using a smart meter - which is free to install - would save a household £50 per year.
