Saving for a deposit on a house? Cut out these 'luxuries'

Published on 24 February, 2017

Today, many people, especially of the younger generation, are increasingly struggling to get a foot onto the property ladder.

Recent research suggests that you need, on average, £33,000 for a deposit on a house in the UK, and so people are increasingly starting to really crunch the numbers, budget and save the pennies wherever possible.

By focussing on eight "modern day luxuries", we have looked at simple savings that could be made to get a bit of extra cash in the piggy bank, helping people get a foot onto the property ladder through some choice (but relatively easy) lifestyle changes.

The 8 “Luxuries” We Focussed On

Methodology

When working out the potential savings to be had, we took a wide range of factors into consideration. These included researching the average cost of eight different activities, and then comparing these to the average cost of a house deposit in the UK (£33,000). For the purpose of consistency, the research and time-frames visualised in the graphic and table below are based on the cost of one single person, and prices used in calculations are accurate as of February 2017. 

Summary

(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
Fortnightly (26) night out £58.48 per outing £1,403.52 4.25% 565 nights out >23.5 years
Monthly (12) iPhone 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% 324 cinema visits >27 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 abstain from all eight examples of these "luxuries" at once, you would save an impressive £5,433.30 in a year. If you can keep this up, in six years you could have saved almost enough for a deposit (£32,599.80), without needing any other savings at all.

The formula is simple – spend less and save more – but we know this can be easier said than done. By consciously cutting out things that you don't need, you can substantially add to your pot of savings towards a deposit on a new home.

In isolation, these specific sacrifices won't be enough, and so you'd have to be committed and willing to cut out multiple luxuries to make a real impact. But remember - when it comes to saving for a deposit on a house, making sure to put a chunk from your pay-check into a savings account each month is still as important as it ever was.

This amount of lifestyle changes that we are suggesting might be difficult for some people to implement in their everyday lives, but it's only a short-term sacrifice in the long run, and if you're looking to buy a property with another person, say a partner, then you can get to your goal twice as quick.

With our advice, prospective homeowners can sooner be in better financial positions to get themselves onto the property ladder. As they say, “Look after the pennies, and the pounds will look after themselves”. A mantra to stick by, if you ask us...

If you’re looking to get onto the property ladder, take a look at some of our current properties for sale.

The Equivalent Cost of Saving £33,000 for a House Deposit. 12,223 Morning Coffees. 2,640 'Cheeky' Meals Out647 Months of Gym Membership. 37 Years' Worth of Body Treatments. 565 Nights Out. 60 Holidays.61 Years' Worth of Mobile Phone Contracts. 27 Years of Cinema Trips. If you can abstain from all these luxuries at once, you'd save £5433.30 a year. £32,599.80 over 6 years.

Sources

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