Over half of Brits cut spending when saving for first home

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Over half (58%) of British homeowners made tactical changes to their spending habits in order to save for their first home, MoneySuperMarket has found.

Nearly a quarter (23%) spent on a credit card and cleared the balance at the end of each month in order to improve their profile to potential lenders, while nearly a third (32%) actively paid off existing debts in the run up to their mortgage application.

Rachel Wait, consumer affairs spokesperson at MoneySuperMarket, said: “Buying a property is probably the most expensive purchase you’ll ever make, so every penny counts when you’re trying to build up a deposit on your first home.

“Whether it’s giving up your Netflix account, cutting back on eating out, or forgoing expensive holidays, these sacrifices can build up a significant amount of money to put towards a deposit.

“Once you’ve saved enough for a deposit, it’s definitely worth shopping around for the best possible rate on your mortgage.

“Doing so could mean that you save a significant amount of money over the mortgage term and ensure that all your hard-earned savings aren’t wiped out by paying over the odds on your mortgage.”

Some 9% also used cash more frequently during the run up to their mortgage application to ensure lenders couldn’t see everything that was being paid for.

Furthermore, 37% of people reduced eating out when trying to save money in the run up to buying their first home, followed by spending less on going on holiday (31%), ordering takeaway (31%) and buying clothes (30%).

Over a 10th also reduced their Netflix subscription (13%), going to festivals (15%) and seeing friends (12%) in order to ensure their finances were in the best possible state.

The average homeowner surveyed saved an extra £369 per month in a bid to get on the property ladder, with the average saved totalling £10,182.

It was 25-34-year-olds saved the most, £398 a month, or an average of £11,320, while over 55s saved the least (£308 per month, averaging £6,324).

The data also reveals that over a 10th (14%) of people are not aware that their credit score directly affects their ability to get a mortgage.

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Written by: Houseladder