No, we are not barking mad when we thought of that title. It is true; you can save enough money whilst living in London to get on the property ladder. If you are reading this on Stooly.com then you should be aware that we are foreigners ourselves and we do own property now. We came to live in London with a few hundred pounds which was sucked up by living expenses in the first three months, struggled with debt for two years and then got our act together to start saving for a mortgage in London.

I am not going to big this article up by saying it was easy. We made a few sacrifices along the way but it was well worth it as we were saving for a deposit to get a mortgage. The media is all talk about how young people can not get onto the mortgage market. It is a possibility if you do your homework and put in the effort, much like everything around. The breakdown of our story should put you well on your path to start saving for a mortgage in London.

Eliminate your Debt

This has to be your top priority in your quest to own a home in London. The interest on debt in the United Kingdom far outweighs the interest you will make on any savings account. Financial experts will tell you the same thing.

Cash ISA Allowance

The Government in the United Kingdom allows each person to save a certain amount of money each year tax-free. This means that all interest earned on money in a Cash ISA is yours to keep. The Government do charge tax on interest earned on all other savings accounts. The tax-free Cash ISA allowance limit do get raised every couple of years and any bank will tell you the limit when you apply for an account. Remember that you are only allowed to have one Cash ISA account during the financial year. The financial year runs from April to April.

Regular Savers Accounts

These savings accounts tend to demand a minimum of £50 per month every month for a year; in return they will pay a larger amount of interest than standard instant access savings accounts.

By this point you are probably thinking that you are never going to save up enough money to get on to the property ladder in London. Do not even think of that as it will discourage you from your goal. This path will not be easy but you got to stick to it and not give up. We felt like it was never going to happen for us but it did and we are now here to share our experiences with you.

Pick your Sacrifices

I have probably got you scared with that topic but it is the harsh reality of it all. You have to pick what you are willing to sacrifice on and what not. Our sacrifices included cutting down on some brands of food, less trips abroad or not buying that new DVD. Tesco made their millions by making every penny count, adopt that same thinking. Please do not cut out all your enjoyment each month as you will become depressed and give up. Draw up a mini budget and set aside a bit of money we would like to call crazy money which you can spend during the month on anything you like without feeling guilty about it.

You could always use some of our sacrifice experiences to help you in deciding what you want to give up or cut down on. When we did go to the cinema we chose the days such as Tuesdays or Orange Wednesdays. Taking snacks with you saves a fortune as food in cinemas can be quite expensive. Fresh fruit and vegetables are a lot cheaper if you go to the market, supermarkets can be a lot more expensive. London is flooded with voucher codes and vouchers as shops and restaurants compete for business, make use of that. If you see money on the pavement, even if it is a penny, pick it up. Cut down on your heating and electricity bill by switching appliances off or using an extra blanket. Take leftovers with to work or make your own sandwiches.

I work in Central London, which is known as Zone 1. Anyone living in London will be able to tell you that it is damn expensive travelling into Zone 1 for work and many wish they could avoid it but majority are too lazy to do something about it. Now I can not stand to part with my hard earned money on something which has no value to me such as transportation. I used to take the bus all the way from West Norwood to Waterloo, which saved me a fortune. Colleagues of mine pay at least £90 to £150 a month for the luxury whilst my travel cost me £60. Think about travelling to Zone 2 and taking a bus into Zone 1, you will see how much you can actually save. Elephant & Castle and Vauxhall Station are on the cusp meaning you can go into the station with a Zone 2 travel card or Zone 1 travel card. Both stations is about 10 minutes away on the bus from Central London, you can even walk it if you do not want to stop every 100m’s.

As you can see, it is the simple things that will help you save.  Yes, it is extra effort but keep on thinking of the end goal and it will be easier. You have to be your own coach and mentor throughout this whole process. Bite the bullet for a little while and you will soon have enough money for a deposit.

Up your Income

To reach your goal quicker, you will need to think of ways of how you could potentially increase the amount of money you receive each month. You could have the opportunity to pick up a few extra shifts at work or get a Saturday job. There are a lot of things to do if you are willing to compromise and take what is available. Whatever you decide to do, keep one day of the week open to relax and do something fun. No use you work like a donkey and feel stressed all the time, you will burn out and become depressed again.

Everything you do will contribute to your savings to own a home in London. Be proud of each step you have accomplished as not everyone will have the determination and willpower to save for a mortgage. There will be embarrassing moments but bite through it and you will come out smiling in the end.

Get comfortable with Ebay and Gumtree to sell some of your old stuff. You would be amazed at how much you can make from your old junk. Old mobile phones, old DVD’s and some people will even buy your old clothes.

Loyalty Cards

Laugh now but this is how I saved a lot of hard earned money doing things I wanted to do. Loyalty cards are issued to customers by a lot of businesses in London. The card either collects points on stamps according to what you spend with them. Do not go out and spend money just to get the points, be smart about it. Only spend money in those stores if it is cheaper and you need it.

Examples of loyalty cards : Sainsbury’s Nectar Card, Tesco Club Card, Boots Advantage Card, McDonalds Coffee, Costa Coffee, Café Nero, Nando’s Restaurants, HMV and Game Card.

There are plenty of stores in London who offer some sort of loyalty programme, make use of it. You are spending the money in their stores so why not take the reward?

When I said you could save for a mortgage in London I did not mean Central London. You need to earn some serious money to afford that each month. I am talking about saving money to afford a home in London for the average Joe. There are plenty of homes on the market for less than £200 000 which is affordable if you put in the time and effort.

If you need some support or extra motivation and tips, then leave a comment and I will do my best to get back to you. This should not be an impossible task!