Chris shares his top tips for those looking to get onto the property ladder:
Have a realistic savings goal
A house is one of the biggest financial commitments you can make. You’ll need to know what you’re aiming for to hit your goal. It’s therefore important you know what you can afford to buy, the size of deposit you’ll need, and importantly what timeframe you have to save for it. From there you can set yourself a realistic savings goal.
Save regularly
Standing orders aren’t just for bills. They can also be used to save for your new home by transferring funds from one account into a savings account. Setting up a regular standing order into your savings account, on the day you are paid, means that you are adding to your savings every month. If you are prone to temptation, moving the money to a separate account (and possibly even one you can’t access readily like a fixed term saver) can help you avoid the urge to dip into it.
Build your credit score
Having a higher credit score can help increase your chances of mortgage approval from a lender. Not only does it show that you’re a reliable borrower, but it could mean higher borrowing potential too. Making sure you’re on the electoral roll is one way to boost your credit score, as well as paying your bills or credit card balances on time.
Establish how much your deposit is
As a house buyer, you’ll likely need to put down at least a 5% deposit (although this may vary depending on the lender). For a house costing the UK average of £269,000*, this would mean a minimum deposit of £13,450. Even if buying a house isn’t on your priority list yet, starting to save as early as you can will give you a head start, and could help you save more. Larger deposits mean your interest rates and mortgage payments are likely to be lower, so if you can save more than 5%, it could pay off for you in the long term.
Think about the extras
Buying a home comes with costs beyond just the deposit. To avoid any financial surprises along the way, make sure to also factor in any additional costs like stamp duty, legal and valuation fees, as well as any moving costs. This will help paint a more realistic picture of how much you need to save.
Chris Henderson, Savings Director at Tesco Bank, comments: “Buying your first home is a huge life milestone, but the thought of saving for one can be daunting. Our research shows nearly 1 in 5 Brits (19%) are saving for a home in 2025, but it can be tricky to prioritise a long-term savings goal with shorter term needs like saving for a holiday or new car. However, even small amounts of money accumulate over time, so the sooner you can start the more you’ll see your savings grow.”
