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    How to save for a deposit

    Saving for a house deposit takes a degree of sacrifice and self-discipline, but owning your first home is worth it. This six-step guide covers where to start, what to change, and how small adjustments to the way you spend and earn build a deposit faster than you would think.

    See The Six Steps
    First-time buyers planning their savings towards a house deposit

    The short version

    Set the target, then change the habits.

    A deposit is built from lots of small decisions rather than one big one. Knowing what you are aiming for turns those decisions into progress you can actually measure.

    Know the target

    Before you start saving, work out how much you can borrow and how much you can realistically afford to repay each month. That figure sets the deposit you actually need.

    Six practical steps

    Reducing your bills, trimming everyday spending, earning on what you already buy, using a savings app, rethinking your rent and adding income all pull in the same direction.

    Small changes compound

    It takes a degree of sacrifice and self-discipline, but incremental changes made consistently add up to a deposit far faster than most people expect.

    Before you start

    Work out what you are saving towards.

    When deciding whether to buy a property, you should first understand how much you can borrow and how much you can afford to repay. Only then does the deposit become a number you can plan around.

    Work out what you can borrow

    Understanding how much a lender is likely to offer you is the first step. Online mortgage calculators give you a quick indication, and a mortgage adviser or independent mortgage broker can tell you what is realistic for your circumstances.

    Work out what you can repay

    Borrowing the maximum available is not the same as being able to live with the repayments. Look at what a monthly payment does to your budget alongside bills, travel and the running costs of the property itself.

    Then set the deposit figure

    Once you know the price bracket you are buying in, the deposit becomes a specific number rather than a vague ambition — and a specific number is far easier to save towards than a general intention to put money aside.

    Six steps

    How to build the deposit.

    Once you know how much you need to save, the question is where to start. These six steps work together — you do not have to adopt all of them at once, but each one shortens the timeline.

    Step 1

    Reduce your bills

    With the cost of living high, this is harder than it sounds — but shopping around and taking advantage of offers and discounted rates still cuts your outgoings.

    • Revisit your energy tariffs and ask your provider whether cheaper ones exist.
    • Shop around for cheaper mobile phone and broadband packages while you are at it.
    • Check your council tax statement — if you live alone, and in a few other circumstances, you are entitled to a 25% discount.
    • Cancel unused subscriptions: TV and music streaming, gyms, clubs, newspapers and magazines.

    Step 2

    Cut down on everyday spending

    Most people underestimate what leaves their account on autopilot. Reviewing three months of statements usually turns up more than trimming any single category ever would.

    • Check your bank statement and look honestly at where the money goes.
    • Use a banking app that breaks spending down into categories so patterns are visible.
    • Pick specific swaps — making coffee at home and taking a flask, or limiting yourself to one new clothing item a month.
    • Move what you save into the deposit fund rather than letting it sit in your current account.

    Step 3

    Earn points or discounts on what you already buy

    Loyalty cards build up discount points on the things you buy regularly, and a cashback credit card earns you a percentage of what you spend back as credit on your bill.

    • Use the cashback card for everyday spending to get the most from it.
    • Pay the balance off in full every month — otherwise the interest outweighs the cashback.
    • Used responsibly, a credit card also improves your credit score, which matters when you apply for a mortgage.
    • Points converted to cash can go towards a conveyancer, a Lifetime ISA, or a rental deposit if you are still renting.

    Step 4

    Consider a saving or budgeting app

    A number of apps funnel your spare cash away automatically, rounding up your spending to the nearest pound and depositing the difference into savings.

    • Automatic round-ups build a balance without any decision-making on your part.
    • The downside is that these accounts do not usually pay interest.
    • Transfer the balance periodically into an account that does pay interest.
    • Treat the app as a collection point, not as the final home for your deposit.

    Step 5

    Assess your renting situation

    A more dramatic step, but potentially the one that saves the most money, is changing your current living situation.

    • Moving back in with parents at below-market rent can save hundreds a month on rent, bills and food.
    • If you live alone, taking in a lodger can cut costs — check with your landlord first, as you may need a new tenancy agreement.
    • A flat share achieves much the same thing if you would rather not stay put.
    • Moving to a cheaper area works too, provided the extra commuting costs do not cancel out the saving on rent.

    Step 6

    Make extra money

    Increasing your income is the other side of the equation, and there are countless ways to do it alongside your main job.

    • Freelancing in your spare time, or setting up a shop selling something you make.
    • Renting out items you own but rarely use.
    • Selling things you no longer need on resale sites and marketplaces.
    • Remember that extra income may mean submitting a self-assessment tax return and paying income tax on it.
    Couple reviewing their budget while saving towards a first home

    Worth avoiding

    The mistakes that slow
    a deposit down.

    Saving steadily is only half of it. These are the habits that quietly undo the progress made everywhere else.

    Saving without a target

    Putting money aside with no figure in mind makes it easy to dip back into. Fix the deposit amount first so you can measure progress and know when you have arrived.

    Forgetting the costs around the deposit

    The deposit is not the only sum you need at completion. Stamp Duty, conveyancing, searches, lender fees, removals and a survey all fall due around the same time, so budget for them alongside it.

    Leaving savings where they earn nothing

    Money sitting in a current account or a round-up pot loses value against inflation. Once a balance builds up, move it somewhere that pays interest and still lets you access it when you need it.

    Making an informed decision

    Protect the deposit you have built.

    When you are making such a significant investment, it is important to have a full picture of the condition of the property before you commit to it.

    A deposit is only part of the decision

    When you are making an investment of this size, it matters just as much that you have a full picture of the condition of the property you are buying — not only that you can fund the purchase.

    A survey protects what you have saved

    An independent survey identifies defects before you commit, so the money you have worked hard to put aside is not immediately absorbed by repairs nobody warned you about.

    Findings you can act on

    Our reports set out condition, severity and priority in plain language, so you can budget for what needs doing, sequence the work sensibly, and negotiate with the facts in front of you.

    Common questions

    Saving for a deposit, at a glance.

    How much deposit do I need to buy a house?

    It depends on the price of the property and what your lender will offer. Start by working out how much you can borrow and how much you can afford to repay each month — mortgage calculators, a mortgage adviser or an independent broker will help. Once you know the price bracket, the deposit becomes a specific figure to save towards.

    What is the fastest way to save for a deposit?

    Changing your living situation usually has the biggest single effect — moving back in with family, taking in a lodger, moving into a flat share or relocating to a cheaper area. Alongside that, reducing bills, cutting everyday spending and adding income all shorten the timeline.

    Can I reduce my council tax while saving?

    If you live alone you are entitled to a 25% discount, and there are a few other circumstances in which a reduction applies. Check your council tax statement to make sure you are not paying more than you need to.

    Are cashback credit cards worth it when saving for a deposit?

    They can be, provided you pay the balance off in full every month. Otherwise the interest charged will outweigh the cashback earned. Used responsibly, a credit card also helps improve your credit score, which matters when you come to apply for a mortgage.

    Do round-up savings apps pay interest?

    Usually not. Apps that round your spending up to the nearest pound are good at building a balance without any effort, but you should transfer the money into an account that pays interest once it has accumulated.

    Do I have to pay tax on money I make on the side?

    You may need to submit a self-assessment tax return and pay income tax on additional earnings from freelancing, selling items or renting things out. Factor that in so the extra income you are counting on is not smaller than you expect.

    What costs come after the deposit?

    Stamp Duty where it applies, conveyancing fees, searches, the lender's valuation and arrangement fees, removals and a survey — followed by decorating, repairs and higher running costs once you have moved in. Keep a contingency alongside the deposit itself.

    Should I still pay for a survey if money is tight?

    Yes. A survey is the one piece of spending that tells you what the rest of the bill is likely to be. Knowing a property's condition before you commit lets you budget realistically and protects the deposit you have spent years building.

    Any questions?

    Ready to buy? Know the property before you spend the deposit.

    Our surveys are carried out by Professionally qualified surveyors and give buyers a clear picture of a property's condition. Findings help you budget realistically, prioritise the repairs that matter, and negotiate with the facts in front of you.

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