The ultimate guide to getting mortgage ready
Follow our comprehensive guide to start moving your first steps on the property ladder
It's not a huge surprise that while 75% of renters want to own their first home, a similar number have no plans to do anything about it.
They face a mountain of paperwork, rising house prices, the need to sort out their credit score as well as the deep pockets to stump up a motgage deposit.
And on the face of it 5% of a propety's value doesn't sound too much, does it? But on average it's just under £10,800 at the moment, based on the Land Registry's average UIK house price of £215,848. And if you're looking to buy a flat in London, for example, it will be £25,000 based on Rightmove's average price of £508,200.
If none of this freaks you out and you're getting ready to save up for a deposit, here's a few pointers on how to get ready.
Saving for a house deposit isn't easy and when you look at the final figure you need it can be intimidating. But by breaking down the total figure into smaller, more achievable targets, you will find the process easier. So commit to saving a set amount per month by setting up a standing order to a savings account - or even maybe a Help to Buy ISA - and top it up with other savings when you can. Ideally, transfer the money over the day after you're paid.
I know, I know. It's all very well saying you need to put money away but, when you are spending up to 50% of your income on rent, how is it possible to save anything? Raising the cash for a deposit will, for most of us, be a long-term process and you will need disciipline and patience to build up your cash reserves.But even if it's a couple of quid a month, it will begin to amass quicker than you might think.
You'll need all the help you can get so be savvy about where you amass your mortgage deposit. Shop around and find the best deals (some savings accounts offer switch bonuses, for example) and the best interest rates. One of the best and most popular ways is to use a Help to Buy ISA which the government tops up for you as you save.
But there are other options - to find out more visit http://www.moneysavingexpert.com.
Not as ridiculous as it sounds and no, I'm not advocating you withhold a few pounds from your rent payment every month.
But, you should look around and see if you can find a similar home at a lower rent nearby. Could you downsize in to a smaller place? Find another rental in another location still within commuting distance of your employment? If you can, the difference between rents can be put into your saving account.And remember, if local rents are going down, which they often do from time to time and you're due for a contract renewal, remember it's not unusual to rengotiate a reduction.
But don't forget to factor in any fees you would have to pay if moving into a new property.
If your tenancy agreement allows it, why not sub-let your spare bedroom. This is a good way to bring in extra cash which can be added to your savings, and it's tax-free up to £7,500 a year through the 'Rent-a-Room' scheme.,
The government want to encourage home ownership and have various schemes which can help you get on the property ladder.
The gov.uk website has details of these schemes including First Buy and Help to Buy including the Help to Buy ISA which can help you save for your deposit.
Click here for more information on all the current government schemes.
Now you are on the way to raising your deposit don't forget to register for CreditLadder. It's the easiest way for you to improve your credit score without taking on additional debt or paying any fees. For more information see our FAQs.