Rising house prices across the country have left many expert bodies forecasting the rise of 'Generation Rent', the 20-39 age group, of which more than half will be privately renting by 2025*. Today, first-time buyers are continually faced with the news that when it comes to buying homes not only are deposit prices higher, but it will take longer to save them. In the last week alone, we've seen stories of spiralling prices upping the average age of first-time buyers** and reports of a rise in the price of the typical first-time buyers property by almost 10 per cent***.
While this news can be unsettling for anyone who is looking to get on the property ladder we can also see positive reports of real-term wages on the rise and the addition of Help-to-Buy schemes and ISAs, showing that there are now a lot of options out there for first-time buyers to give them that extra helping hand.
Some of our latest research of 1,000 hopeful homeowners across England and Wales, or first time triers as we call them, suggests that one of the biggest struggles comes down to the very first step in the process- saving.
With a deposit being arguably the biggest expenditure of any saver's life to date, it goes without saying that first-time buyers have to be stricter than usual with their money to meet their monthly targets. By no means does this mean a drastic upheaval of outgoings, but rather tweaking round the edges of regular expenditures to save precious pounds. For the first-time buyers we surveyed a regular coffee-chain hit (55%) and beauty treatments (64%) were identified as 'necessary luxuries'. Seemingly these first-time buyers would rather keep their trips to the salon and stop by their favourite coffee shop every morning, instead of putting extra money aside for their first home.
Our survey found that first-time buyers across England and Wales are spending on average £218.38 on these perceived 'necessities' after putting money aside - which include regular eating out, nights out, gym memberships, and holidays - while they wait in vain for their own piece of the housing market. With people already saving £286.51 per month towards their house deposit a few extra tweaks could mean that people are reaching their savings goals that much sooner.
Many of us have become experts at tightening our purse strings to save money, but in a housing market which puts high demands on first-time buyers, small sacrifices might be the difference between settling in the dream home, and not.
Often first-time buyers are faced with the often-dreaded option of moving back in with their parents in order to save money - something we can all relate to at one point or another. In the quest for greater independence in owning their own property, moving in with parents or relatives can understandably seem a step back. Despite this, the majority of first-time buyers we surveyed either already have moved back home (11%), are still living at home (19%) or would move back if it meant saving money towards their own house (26%).
Whilst this isn't always a possibility it is encouraging to see that first-time buyers are clearly willing to make sacrifices in certain areas for the sake of their house deposit, it does beg the question why not make smaller lifestyle tweaks which will in turn help the pennies turn into pounds?
At the end of it all you could have a home to call your own.
To help this nation of first time triers Principality Building Society has launched First Time Trier, a toolkit aiming to break down the barriers and put the fun back into first time buying. You can check it out on the website www.principality.co.uk/FirstTimeTrier or on Twitter @FirstTimeTrier.
Notes to editors:
* http://www.pwc.co.uk/assets/pdf/ukeo-section3-housing-market-july-2015.pdf
** http://www.dailymail.co.uk/news/article-300163/First-time-buyer-crisis.html
*** https://www.estateagenttoday.co.uk/breaking-news/2015/9/huge-rise-in-deposits-means-first-time-buyers-priced-out-warns-agency