With record average house prices, it’s no secret that these days it’s harder than ever for first-time-buyers to get a foot on the property ladder. Recent research suggests that you need, on average, £33,000 for a house deposit in the UK. Would-be home owners are starting to really crunch the numbers budget-wise and save the pennies wherever possible.
So what can you cut out to get the deposit sooner? Obviously, one person’s luxury is another’s necessity. But we’ve focused on eight things we think you might be just about able to get by without for a while if you want to get to your property dreams sooner...
Eight “luxuries” to cut
- Weekday morning coffee fix.
- Weeknight “cheeky“ meal at a well-known chicken restaurant.
- Gym monthly membership.
- The annual cost of body "maintenance" treatments (any kind of pampering, and basically anything that involves the trimming, dyeing, shaping, or removal of any kind of hair.)
- Summer holiday abroad, including spending money.
- Nights out on the town every fortnight.
- Monthly smartphone contract (not accounting for the device itself, upgrades or accessories).
- Monthly cinema trips.
How we worked it out
When calculating potential savings to be had, we took a wide range of factors into consideration. We researched the average cost of those activities and compared it to the average house deposit cost (that magic £33,000). Prices used in calculations are accurate as of February 2017.
For simplicity, we based our calculations on the achievable savings for one single person …
(Apologies to mobile users - this table may not fit your screen very well. We'll keep working on it!)
|Estimated items per year (for one single person)||Cost||Total potential 1-year savings||1-year savings as a percentage of deposit on a house (£33,000)||In isolation, the number of items equivalent to deposit on a House (£33,000)||In isolation, the duration needed to save equivalent to deposit on a house (£33,000)|
|Weekday (252) coffees||£2.70 per coffee||£680||2.06%||12,223 coffees||>48.5 years|
|Weekly (52) meals out||£12.50 per meal||£650||1.97%||2,640 meals out||>50 years|
|Monthly (12) gym membership||£51 per month (+ one-off £15 joining fee)||£627||1.9%||647 months of membership||>52 years|
|Yearly body “maintenance”||£876 per year||£876||2.65%||37 years’ worth of treatments||>37 years|
|Summer holiday (1)||£327.50 + £227 spending money||£554.50||1.68%||60 summer holidays||60 years|
|Bi-monthly (26) night out||£58.48 per outing||£1,403.52||4.25%||565 nights out||>23.5 years|
|Monthly (12) smartphone contract||£45 per month||£540||1.64%||734 months of phone contract||61 years|
|Monthly (12) cinema trips||£8.49 per ticket||£101.88||0.3%||3,887 cinema visits||>323 years|
|Total 1-Year Combined Saving||£5,433.30||16.46%|
|6-Year Combined Saving||£32,599.80||98.79%|
What this means
If you can be good and say no to those eight drains on your income, you could save an impressive £5,433.30 a year. Keep it up, and in a little over six years you’d have enough for that deposit without needing to borrow or dip into any other savings!
We know ‘spend less, save more’ is hardly a revelation, but by consciously cutting out things you don't need, your new home fund can grow pretty quickly.
Can you really come up with a house deposit just by cutting out a few luxuries? Probably not. Life’s not that predictable. But the maths doesn’t lie. The simple calculations above show how much is possible and should be used as motivation more than anything. It’s probably still a good idea to put a chunk of your pay cheque into a savings account each month, though. Six years is a long time to grow your hair out!
This amount of lifestyle changes may sound drastic, but it's only a short-term sacrifice. And if you're buying with another person, you can get to your goal in half the time. Or, you could get a bigger deposit together.
As they say: “Look after the pennies, and the pounds will look after themselves. A mantra to stick by, if you ask us...
Ready to get on the property ladder? Want some saving motivation? Take a look at our properties for sale.