First-time buyers cut costs to get on the ladder
Over half (58%) of British homeowners say they made tactical changes to their spending habits in order to save for their first home, said Moneysupermarket.
The price comparison site found that nearly a quarter (23%) spent on a credit card and cleared the balance at the end of each month in order to improve their creidt profile for potential lenders, while nearly a third (32%) actively paid off existing debts in the run up to their mortgage application.
Nearly one in 10 (9%) admitted they used cash more frequently to ensure lenders couldn’t see everything that was being paid for.
The spending that buyers most restricted was eating out (37%), going on holiday (31%), ordering takeaway (31%) and buying clothes (30%). Over a tenth also reduced their Netflix subscription (13%), going to festivals (15%) and seeing friends (12%) in order to ensure their finances were in the best possible state.
The average homeowner surveyed saved an extra £369 per month in a bid to get on the property ladder, with the average saved totalling £10,182. 25-34-year-olds saved the most (£398 a month, or an average of £11,320), while over 55s saved the least (£308 per month, averaging £6,324).
Rachel Wait, spokesperson at MoneySuperMarket, said: “Buying a property is probably the most expensive purchase you’ll ever make, so every penny counts when you’re trying to build up a deposit on your first home. Whether it’s giving up your Netflix account, cutting back on eating out, or forgoing expensive holidays, these sacrifices can build up a significant amount of money to put towards a deposit.
“Once you’ve saved enough for a deposit, it’s definitely worth shopping around for the best possible rate on your mortgage. Doing so could mean that you save a significant amount of money over the mortgage term and ensure that all your hard-earned savings aren’t wiped out by paying over the odds on your mortgage.”