- Santander Mortgages identifies three tribes of first-time buyer, each with a bold approach to saving for a property deposit
- Alternatives: Over 40 per cent of first-time buyers turn to alternative finance to fund their deposit, including crowdfunding, selling raffle tickets and 鈥榖onds鈥
- Boomerangers: More than a third (38 per cent) of first-time buyers opt to move back home for two years to save for a deposit, with a further 15 per cent willing to stay up to five years to save more
- Minimalists: Almost two million Brits planning to buy a property are willing to switch nutritious meals for pot noodles in a desperate bid to save funds
New research1听from Santander Mortgages reveals the different strategies first-time buyers are adopting to save up a home deposit, identifying three clear tribes: the 鈥榓lternatives鈥, 鈥榖oomerangers鈥 and 鈥榤inimalists鈥.听
More than 40 per cent of first-time buyers are considering alternative finance options to raise their house deposit. Of these 鈥榓lternatives,鈥 one in five (22 per cent) is considering selling shares in the property offering a potential capital return when the home is sold. A further 19 per cent are planning to embrace crowdfunding to raise their deposit, while nine per cent are planning on selling a 鈥榖ond鈥 to investors offering a guaranteed interest payment. Of those considering alternative finance options, eight per cent would explore selling raffle tickets for an equity share in the property after the deposit total is reached.
To save money for deposits, 38 per cent of first-time buyers would consider becoming a 鈥榖oomeranger鈥 and moving in with their parents or partner鈥檚 parents. Those willing to move back home would be open to staying for an average of two years, with 15 per cent willing to live with them for more than five years. A further 10 per cent of those planning to buy their first property, either expect to, or will move back in with their parents after completing university, while 12 per cent have had to move home after completing their course to save for a deposit.
The research shows 鈥榤inimalists鈥 are happy to downsize their lifestyles to save for a house deposit. Almost two million Brits are willing to switch nutritious meals for pot noodles in a desperate bid to save money, while 21 per cent will give up alcohol to raise funds. More than one in ten (11 per cent) would sacrifice their fitness and quit the gym to cut back their expenditure and boost their savings.
Those looking to buy anticipate needing to save on average 拢20,478 for a deposit. With the average UK wage sitting at 拢26,0012听hopeful first-time buyers are choosing to eliminate all but the most essential purchases to save enough money. The findings reveal 17 per cent of Brits are looking to buy their first home within the next five years. Those planning to get a foot on the housing ladder have been saving towards a deposit for an average of 21 months and have typically raised 拢10,379 so far, equating to a monthly saving of 拢492.58. Meaning they have around another 20 months left of saving for a deposit.
Perhaps unsurprisingly, those looking to buy within the next year have adopted a more aggressive savings plan putting away 拢744.22 a month on average. This compares to those who are not planning to buy for at least another five years, who manage to save an average of 拢352.56 per month.
Miguel Sard, Managing Director of Mortgages at Santander UK, said:听鈥淲e know that getting a foot on the housing ladder is tough and our research suggests first-time buyers are taking some quite serious measures to make that first step. They are showing incredible levels of resilience, determination and ingenuity to save for a deposit and exploring all available options to maximise their savings.
鈥淚t is important that those considering alternative finance routes to raise funds read up on all the relevant regulations to avoid potential prosecution or huge legal fees. We would urge them to apply the same dedication to choosing the right mortgage and to talk to prospective lenders to see what support is on offer.鈥
ENDS
The information contained in our press releases is intended solely for journalists and should not be used by consumers to make financial decisions.
Notes to Editors听
1)听Research carried out online by Opinium from 02鈥05 February 2018 amongst a nationally representative sample of 2,002 UK adults.
2)听
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