Prospective homebuyers often feel daunted as they attempt to save enough for a house deposit, particularly amid Britain’s competitive property market. With soaring living costs, stagnant wage growth, and interest rate uncertainty, it can seem as though the dream of owning a home is slipping further out of reach.
According to one industry authority, there are strategic ways to not only bolster your savings, but also present a stronger financial profile to lenders.
Eamonn Turley, CEO and Insurance Expert at Multi Quote Time, an insurance comparison website connecting customers with a shortlist of UK brokers, has spent over a decade guiding clients through property investment and financial planning. He believes that refining the way we save is key to accelerating the journey to homeownership.
Speaking on the importance of focused saving, Mr Turley told The London Property News, “It calls for strategically saving money rather than just piling it all up in one place. The most important factor is setting a proper savings plan and having a laser-focused budget that mercilessly Tracks every pound to know exactly where to cut to avoid being deprived.”
This advice aligns well with the current challenges many would-be homeowners face.
Property prices have remained robust across much of the UK, and while opportunities exist—particularly for first-time buyers willing to look beyond traditional property hotspots—an inflated deposit can often be the difference between securing a suitable mortgage or being turned away.
By closely tracking spending habits, individuals can identify unnecessary outgoings, diverting these funds towards a high-interest savings account instead.
Power of savings automation
Automating monthly contributions to a dedicated savings pot can dramatically reduce the temptation to spend.
Beyond simply avoiding impulse buys, this approach can help show lenders that applicants are consistent and disciplined in their finances.
Emphasising this approach, Mr Turley shared, “Savings automation can really change the game for anyone who wants to be a homeowner. You set up a separate high-interest savings account, arrange automatic monthly transfers, and thus eliminate the temptation to spend. I recommend saving at least 20% of your monthly income, which, in addition to helping build your deposit faster, demonstrates financial discipline to potential mortgage lenders.”
This disciplined approach can also help mitigate the impact of rising interest rates.
As many first-time buyers know, a larger deposit can improve mortgage terms, potentially securing more favourable interest rates and reducing long-term repayments.
Looking beyond the headline mortgage rate
While initial interest rates are often the first factor buyers consider, other elements—such as arrangement fees, the flexibility of overpayments, or potential early repayment charges—can significantly affect the total cost of borrowing.
Highlighting the bigger picture, Mr Turley told us,“Look at things like arrangement fees, overpayment options, and early repayment charges. Sometimes, a slightly higher interest rate with more flexible terms can save you money in the long run.”
Due to the current economy and inflation, most consumers realise every penny counts, prospective homeowners who dedicate themselves to strategic saving and careful mortgage comparisons stand a better chance of achieving their goal sooner.
By taking a closer look at monthly expenses, streamlining their budgets, and choosing the right mortgage terms, they can make the dream of getting onto the property ladder feel not only achievable but also far less stressful.