Wannabe homeowners move in with parents to save money
One in four of those saving for a deposit has moved back in with parents and 30% are not going on holiday, according to Nottingham Building Society.
The mutual found that around 61% of wannabe first-time buyers say they have cut back on socialising while 55% have cut general spending on themselves and loved ones.
Around one in 12 (8%) have even postponed starting a family or getting married while 7% have sold their car and now rely on public transport so they can maximise their savings.
Despite these sacrifices, aspiring first-time buyers are missing out on Government bonuses available through Lifetime ISAs and Help to Buy ISAs.
The lender’s research found one in three (32%) saving to buy their first home in the next five years have not heard of the accounts that can boost their savings and less than half (48%) have taken advantage of a Government scheme. Savers aged 18 to 24 are the least likely to know about financial benefits of ISAs that are available with 44% admitting they’re not aware.
Chief operating officer, Simon Taylor, said: “Our research shows people are making financial sacrifices to get on the ladder and they deserve some help. Thanks to the significant bonuses available, paying into a government-backed savings account, such as a Lifetime or Help-to-buy ISA, will enable first-time buyers to save a deposit more quickly or put down a larger deposit which can increase their options.
“The help isn’t just for there for first-time buyers either as the Lifetime ISAs can be used by savers wanting to boost their retirement savings also.”
What is a LISA?
The account was created for those aged 18-39, who are either saving for their first home or retirement. Account holders can save up to £4,000 every year, with a 25% state bonus being paid monthly, on funds deposited in the previous month, until the account holder turns 50, when they will no longer be able to make deposits, but interest will continue to accrue.
For example, an individual saving to buy a first home at £184,000 would need to save a 10% deposit of £18,400. After saving the maximum annual amount of £4,000 for four years a customer would have a balance of over £20,000 in their LISA. First-time buyers are eligible for up to £1,000 of cash bonuses every year and The Nottingham is one of just two providers to offer the Cash LISA. As well as the 25% bonus, the mutual will pay 1.00% AER interest tax free, on the savings balance every year.