The Alliance & Leicester Mortgages study looks at how much and for how long first-time buyers plan to save for their deposit.
On average they want to save a deposit of £11,710 – about 8 per cent of the average first-time buyer house price. However, potential buyers are looking to put away £270 a month for two years, which with interest gives a total saved of £6,570, leaving a shortfall of over £5,000.
To achieve what they want potential buyers will have to put aside nearly £500 a month.
Richard Taylor, head of mortgages at Alliance & Leicester says: “There is a clear mismatch between how much and for how long first-time buyers are willing to save and their ideal target deposit to buy their property.”
However, it seems that aspiring first-time buyers are not saving as much as they could. The study reveals that they spend £136 a month on extras like socialising, eating out and other leisure activities. Aspiring first-time buyers currently spend £1,639 a year on leisure, with Londoners spending the most at £2,204.
“To turn dreams into reality it’s a good idea to plan and budget carefully – trying to cut back on luxury expenditure, like takeaways and expensive nights out, will all help to achieve their dream more quickly,” says Taylor.
He suggests cutting back on leisure spending by half – this amounts to £68 a month – and adding this extra money to their savings. This would mean that the ideal target deposit of £11,710 could be reached in two years and eight months.
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