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New buyers are canceling subscription services like Netflix and Amazon Prime, while also cutting back on going out in an effort to save more to buy their own home.
Rightmove said these buyers also used less gas and electricity at home and even cut back on the amount they spent on a grocery store.
The study outlined the most common ways first-time buyers cut spending to save more for a down payment.
Tightening the wallet: New buyers are canceling subscription services like Netflix and Amazon Prime to save more for a down payment, says Rightmove research
The lifestyle changes that allow first-time buyers to save more of their income include spending less on vacations.
Only 16 percent of first-time buyers said part of their down payment would be raised with help from family and friends.
Mark Harris, from mortgage broker SPF Private Clients, said: ‘The down payment has long been the main barrier to entry up the housing ladder for first-time buyers, particularly those living in London and the South East where property prices are so high. It is no surprise that so many turn to the Bank of Mum and Dad for financial help.
It’s also not surprising that aspiring first-time buyers are cutting their bills where they can and putting the money saved into the down payment, especially as the cost of living is skyrocketing.
“With rents also rising, those areas that can be cut back are targeted, such as energy and food bills and going out.”
| Action to reduce expenses and save more for a down payment | First time buyers who have taken this action |
|---|---|
| I spent less on clubbing or eating out | 72% |
| I use less energy at home such as gas or electricity | 55% |
| I spend less on holidays | 49% |
| I spend less on food and supplies | 48% |
| I cancel subscriptions, such as Netflix, Prime, Disney+ | 35% |
| I’m shopping more | 32% |
| I sell things I own | 27% |
| Take on an extra job | 24% |
| I use more credit than usual | 15% |
| Moved back in with my parents | 7% |
| Source: Rightmove |
Rightmove’s research also found that it typically takes a first-time buyer five years to save up their down payment.
Meanwhile, the average monthly mortgage payment for a new starter taking out a two-year fixed mortgage with a 10 per cent down payment is now £1,324.
It’s 41 per cent higher than the average monthly rent payment of £940 after mortgage rates rise, Rightmove said.
The average monthly mortgage payment for first-time buyers who take out a mortgage with a 25 per cent down payment is £1,082, which is 15 per cent higher than the equivalent average monthly rental payment, highlighting the difference in monthly payments for those who can afford to pay a . to save a larger deposit.
Going it alone: Only 16 percent of first-time buyers said part of their down payment would be raised with help from family and friends
The survey also looked at what first-time buyers find most important when purchasing their first home.
A three-bedroom semi-detached house is the most popular type of property starters hope to buy outside London, while first-time buyers in London have set their sights on a two-bedroom apartment.
While first-time buyers and more experienced buyers value similar features in a home, first-time buyers put more emphasis on energy costs, a guest room and space to work from home.
Experienced buyers prioritized a garden over starters, as well as a parking space and garage.
| Home function | Importance for starters | Interest to experienced buyers |
|---|---|---|
| Has a garden | 26% | 31% |
| Has a parking space | 15% | 16% |
| Energy costs of the home | 14% | 10% |
| Has a spare room | 13% | 10% |
| Space to work from home | 12% | 9% |
| Has a utility room | 7% | 8% |
| The house is pet friendly | 7% | 7% |
| Has a garage | 6% | 10% |
| Source: Rightmove |
Demand in the starter sector is down 26 percent compared to last year’s hot real estate market.
However, demand from new buyers is still 4 percent higher than in 2019, before two and a half years of intense market frenzy.
Tim Bannister, of Rightmove, said: ‘The sudden nature of the rise in mortgage rates has meant that first-time buyers have had to rethink their position very quickly.
“Those who already had a mortgage offer, for example, try to rush their purchase to keep their lower rate.
“Many of those who had not yet received an offer and found that monthly mortgage payments were a lot more expensive than planned, either had to budget for the extra costs, look for a cheaper home and borrow less, or put their plans on hold altogether.
“With mortgage rates falling, new buyers are hoping there are no surprises in today’s fall budget and can gain longer-term security and financial security after what has been a turbulent and very difficult period. uncertain two months.
“Despite the many major challenges that start-ups are currently facing, the fact that demand in the sector is still above the last normal market of 2019 shows that there are currently many motivated start-ups who are still determined to to step into the ladder.’