How to get on the property ladder – experts share five ways to save while renting

Martin Roberts discusses getting on the property ladder

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Buying a property can seem like an impossible task for budding homeowners, with increasing living costs making it even harder to save while renting. Millennial and Gen-Z property seekers have come under fire for wasting potential savings on a “decadent” lifestyle filled with coffees, gym memberships and a Netflix subscription.

Location, Location, Location presenter Kirstie Allsopp says she feels “enraged” when she hears young people complain that they can’t afford a home of their own, and believes that a few simple sacrifices could be the key to getting on the property ladder.

Speaking to the Sunday Times, the 50-year-old TV star said: “When I bought my first property, going abroad, the EasyJet, coffee, gym, Netflix lifestyle didn’t exist. I know there are many who can’t afford to buy, but others are not willing to make the sacrifices.”

The jury is still out as to just how quickly a Netflix and gym-free lifestyle will secure first-time buyers a home of their own, as average house prices are now 65 times higher than in the 1970’s.

With a turbulent economy pricing millions of Brits out of buying, Express.co.uk spoke to the industry experts to find out the best ways to boost your property savings while renting.

How to save to save for a house while renting

While Kirsty’s advice on looking in cheaper areas is something to consider, the nationwide housing crisis can’t always be solved through a cost-cutting relocation.

Speaking exclusively to Express.co.uk, Alex Brown, Mortgage & Protection Adviser at Succession Advisory Services Ltd said: “While saving for a deposit is one of the biggest obstacles in getting onto the property ladder, you can take some practical steps to make the task a bit less daunting.

“Some of these changes will be easier than others, but if you stay committed to this transformation, you’ll end up with great money management skills that will serve you throughout your life — and in the meantime, you’ll have more money in your pocket.”

Make use of your ISA allowance

Few savers will be untouched by inflation in the near future, but you may be able to mitigate some of the effects by making sure your money is in the best place possible.

Using an ISA means you will be able to earn tax-free interest on your savings, reaping the benefits of inflation returns.

Alex said: “Generally, UK residents aged 18 and over can invest £20,000 per annum into a Stocks & Shares ISA; those under 18 can have £9,000 invested on their behalf, each year. “Those aged 16 or over can invest £20,000 per annum into a Cash ISA.”

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Track and identify how much you’re spending on non-essentials

If you consider your streaming subscription or gym membership essential, take a deeper look into other areas of your life where you could cut costs.

Dining, entertainment and excessive online shopping might be something you can reduce or limit your spending on.

Curb non-essential spending by sitting down with your bank statements and analysing where your pay goes each month, says Alex.

Costly branded products, grab-and-go snacks and replacing items which are easily repaired are all key areas that are often overlooked while trying to save.

Follow the 80/10/10 saving hack

It’s no secret that budgeting is the key to successful saving, and there is one foolproof formula to suit every budget.

No matter how your finances are impacted by rising living costs, the 80/10/10 saving hack is the best way to spread and save your income.

Speaking exclusively to Express.co.uk, accountant Gordon D’Silva from Gordon’s Knight Ltd said: “Live to the 80/10/10 rule, where you learn (and plan) to spend up to 80 percent of what you earn, save 10 percent for emergencies and 10 percent for a long-term goal (your house deposit).

Over the course of a year you could save:

  • £1000 on your daily coffee (average cost £3)
  • £2000 a year on lunches (£6 per day)
  • £1200 a year on takeaways (two per week at £12 each)

Learn to invest

While all investments come with a risk, learning to invest your savings safely could have a rewarding pay-off.

Gordon explained: “Taking your savings and investing it at a return of 10 percent per annum will double the value of your savings in around seven years! £1,000 becomes £2,000.£10,000 becomes £20,000.”

Calculated risks are the best way to reap the benefits of a high return.

Freeze your cards

If you are guilty of over-spending, set physical restraints on your bank account by limiting your ability to spend more than you can afford each week.

Allocate spending money every week using one debit card with one bank account, with the right money on it – (your 80 percent and your 10 percent funds).

Your 10 percent savings should not be touched, only invested and used for your deposit.

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