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Village Features

Give up six things to save a deposit

Posted on March 29 2018 at 11:41:04

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There’s no need to rely on the ‘Bank of Mum and Dad’, writes Martin Pryor.

First-time buyers are vital to the housing market, but often need help getting on the property ladder. If the “bank of mum and dad” is not an option, then here are a few effective tips to help save for that deposit.

According to the Halifax, the average deposit for a first home has now crept up to £33,000. This prospect, for the often-debt-laden student, is a daunting one. It is no wonder that younger buyers are struggling to get on the property ladder.

Some first-time buyers rely on the “bank of mum and dad” and it is believed that 25% of first-time buyer purchases are funded this way. 

This still leaves 75% of buyers having to find that money themselves… It might not be easy, but it is possible for couples, who comprise 80% of first-time buyers, to save £33,000 by giving up just six things for five years.

The surprise, hopefully, is that some of these savings can be made with relatively small changes to lifestyle. 

Let’s start with coffee. While buying a latte is now part of our every-day routine, it is hitting us in the pocket. According to Buddy Loans, we’re paying on average up to £700 a year on coffee at outlets such as Costa.

For a couple that could mean a saving of £6,248 over five years – a massive step towards that deposit target.

Another huge contribution could come from giving up a gym membership. Before you consider this:  if you are a regular gym goer then your membership may represent good value for money – but according to adult training provider Be A Better You, the average person visits their gym 13.5 times a year.

The average cost of gym membership is £550 so this could save a couple a cool £5,500. 

When it comes to weekend escapes, according to travel search site Skyscanner, the typical cost of a city break is around £700 per couple, so you could save £3,500 over five years.

Be careful, though; staying at home can be even more expensive. Research from Voucher Codes reveals that we spend, on average, £110 a month – per person – on takeaways! After some quick calculations that amounts to £13,200 over five years. 

Meanwhile, the cost of scratch cards and playing the National Lottery is estimated to be £416 per head, so £4,160 over five years for a couple.

Finally, the cost of mobile phone upgrades calculated by Sell My Mobile is £770 over a five-year period.

Add all these savings together and you will have reached your target to buy your first home.

Finding the money for a first home is without doubt hard work, but if more young people are able to save for a deposit and enter the residential property market, the benefit will be felt by all homeowners as these buyers move up the property ladder. 

This article apologises to readers who own local coffee, gym, travel, and takeaway businesses who might not appreciate a generation of frugal first-time buyers – but just think of all those wealthy mums and dads relieved of their banking duties!

The six things a couple could give up for five years to save the average deposit of £33,000:

Takeaway coffee £6,248
Gym membership £5,500
Mini breaks (once a year) £3,500
Takeaways £13,200
Lottery ticket £4,360
Mobile upgrade £770

Total: £33,378

Sources: Buddy Loans, Be A Better You, Skyscanner, Voucher Codes, Voucher Code Pro, Sell My Mobile, The Deltic Group, Strutt & Parker.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it. Buy-to-let (pure) and commercial mortgages are not regulated by the FCA. Think carefully about securing other debts against your home.

* Contact Pryor Portfolio for more information and advice.
Tel: 07961 162818
.(JavaScript must be enabled to view this email address)
http://www.ppm-ifa.co.uk


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