Saving to buy your first property or rental deposit can be daunting - but having a clear and realistic plan can make it feel much more achievable. Whether it's by denying yourself that £5 mocha latte once a week or putting off an exotic family holiday, everyone has their own way to save.
This Accent Housing blog is designed to help you discover that, save for a rental deposit together for a house, understand the options and help you have available and most importantly, how to manage your money to make the most of it.
What Is A Rental Deposit?
At the beginning of a tenancy, landlords usually demand an amount of money from the tenant to cover any future damage to the property or unpaid rent. The landlord should place the money in a deposit protection scheme, which ensures that it can be returned at the end of the tenancy agreement.
Here are 5 ways you can save a rental deposit:
1. Cut Back On Your Monthly Spend
Take a look at your monthly expenditure and analyse what you feel you can cut back on.
Ask yourself questions like - How much do you spend each month on luxuries like Starbucks coffee, or dinner when you’re at work?
Because you might be surprised by the total monthly figure on items you could probably do without.
A study by Nationwide revealed the average cost of working in an office was £7 per day – over a 261-day working year, that equates to a huge £1,827, with £230 of that spent on coffee, and tea and treats.
Making a switch to including these in a weekly shop and taking your own coffee and dinner could save you a lot of money. Putting that straight into your savings account will make a huge difference over a sustained period.
2. Eliminate Any Debt
Saving for your rental deposit can only start if you simply are square with your money. Carrying a burden of debt will make it that harder so focusing on eliminating any debt before you consider saving is crucial.
Add up how much you spend servicing your debt each month, and you'll quickly see. Once you're free from paying interest on your debt, that money can easily be put into savings. A personal line of credit is just one option for consolidating debt so you can better pay it off.
3. Consider A Savings/Budgeting App
Several apps will funnel away your spare cash, building up your funds for a deposit.
Some apps, such as Monzo and Oval, can round up you’re spending to the nearest pound and deposit the difference into a savings account.
Other apps, including Chip, Plum, and Cleo, use an algorithm to analyse your financial behaviour and decide how much you can afford to spend.
The downside of these apps is that they don't usually pay interest on the amount you're saving – so, once you’ve saved, you should transfer the funds to an account that does pay interest.
4. Do Things In Proportion
When you’re saving for something as big and important as moving out into your own property, your luxuries must be cut down. Things such as smoking and drinking especially.
At every stage of your life, you have to enjoy yourself but sometimes you have to cut back. Rather than going out every week with your friends, partner, or family you might have to say no and do things in proportion. So every other week might be more sensible, allowing you to save easier.
5. Look At Shared Ownership
Shared ownership schemes allow you to buy a share of a property (usually between 25% and 75%) and pay rent on the rest.
The main downsides are that getting a mortgage on a shared ownership property can be tricky and it’s hard to increase your share of the property’s value increases.
Shared Ownership Homes With Accent Housing
All our available shared ownership homes are available on homemadehomes.com/our-homes. Homemade is an experienced property sales team within Accent Housing.
We offer both new and resale shared ownership homes. Over the years, we’ve helped thousands of people fulfil their ambition of being homeowners with our shared ownership properties. Our team are experienced industry experts and proud of what we do. We would love to help you find your next home.