What the FTBs think.

Ian_Griffiths_Halifax

From Mortgage Introducer magazine

Average FTB thinks they need a £19,100 deposit

23 September, 2008

New research carried out by The Co-operative Bank and Places for People has revealed that the average first time buyer currently feels they need to have saved £19,100 to enable them to buy a property.




Despite the current housing market outlook, the research conducted with 1,500 first time buyers shows that over half of those questioned still feel renting is ‘throwing money down the drain' (54%), with the majority estimating that it will take them up to two years to begin thinking about buying their first home.

As a result first time buyers are now making more sacrifices to enable them to save for a home. According to research conducted last year before the credit crunch over half of first time buyers (57%) were not prepared to make any sacrifices to get onto the property ladder, whereas now less than one in ten share this approach (9%). Also, the number of people who are prepared to forego their foreign holiday (50%) and eating out (53%) has doubled since last year.

Sacrifices made by first time buyers in decscending order are: Eating out 53% - Holidays abroad and weekends away 50% - New clothes 40% - Coffee and lunch from shops 39% - Reducing alcohol consumption 39% - Quitting smoking 27% - Delaying having children 22% - Getting married 20% - Owning a pet 14% - Car ownership 12%

The findings also highlight the actions that first time buyers are taking at the moment, which include lowering their expectations of the properties they are looking at (46%) and changing their shopping habits (36%). In addition, some first time buyers are even trading on eBay and at car boot sales (18%), reducing the amount of energy they use, amid rocketing fuel bills (19%) and taking a second job (11%) to save for a deposit.
When it comes to the choosing a property, the research also uncovers the main compromises first time buyers are prepared to make with the actual property itself. Almost half will be happy to have no extra bathrooms (49%) or a garage (48%) and over a third are prepared to make allowances for the size of the outdoor space (40%), or an extra bedroom (40%). However three quarters of people will not sacrifice a garden (78%) or compromise on room size or location (80%).

But only a quarter of first time buyers believe that the onus should be completely on them to reach the first rung of the ladder; with the majority feeling the Government should take more responsibility (53%). Only a fifth of buyers think the private sector should do more (19%). Interestingly less than 1 in 20 feel that it should be up to families to step in and provide the support needed.

Victoria Drummond, Operations Manager for Ownhome said: "This new research shows that the dream of owning a home is now out of reach for many first-time buyers, as they struggle to save for a deposit, against a backdrop of soaring household bills and the increased cost of living.
"As a result many more people are being entrepreneurial and making sacrifices in a bid to try and claw their way onto the property ladder including cutting down on eating out, holidaying in the UK rather than abroad, and swapping supermarkets to drive down their food bills.
"It is vital that the Government and the housing industry continue to offer simple, clear and innovative products that provide first-time buyers with the essential financial support needed to help them take their first steps onto the property ladder."

neverdespairgirl

It's weird how many more people delay having children than sell the car!

MrDT

I think some of us are delaying having children regardless of house prices though!

IveSeenTheLight

I wonder how many of those who say they would sacrifice drinking and smoking soon find on Friday they are off to the pub or after a couple of days are clawing at the shop to get a packet of fags

IveSeenTheLight

But only a quarter of first time buyers believe that the onus should be completely on them to reach the first rung of the ladder;

Sorry, but it seems to me that only a quarter are willing to get on with it and sort things out for themselves with three quarters expecting help from others.

Its sad but you see so many instances where people expect others assistance instead of taking responcibility for themselves.
**NOTE** Note starting another post argument about how unaffordable houses are

I know of at least 2 kids in real life and a few other I've seen on television documentaries with the attitude to their parents of "well you had me so you can pay for me".
Time for parents to have a stronger stance and parenting!!!!

neverdespairgirl

MrDT wrote: »

I think some of us are delaying having children regardless of house prices though!

I'm sure that's right. But this list of things was those people are doing in order to save money.

pickles110564

MrDT wrote: »

I think some of us are delaying having children regardless of house prices though!

Very sensible

hostman

The figure is spot on.

I'm a first time buyer, sale is going through right now and we have a deposit of £18,700, representing 15%.

wolfman

Living in London, I'll be saving more than £19k. I reckon around a £50k first payment and I'll be happy. The more the better.

Making sure I've got as many ways of cutting costs as possible. Got a few friends (solicitors) that can help reduce fee's when I do buy. Renting at the moment as cheap as possible, and eventually with the missus to halve the cost of renting. That way we'll hopefully be able to save into 4 figures each month.

Then it's just a matter of waiting. I'd rather keep paying rent (to a friend of mine) than to a random landlord, or buying. As the prices drop it just means I can get a flat that much closer to a rail link, and in a closer area to where I'd ideally like to live one day. Plus the longer I do wait, the smaller the mortgage I'll need (less to pay off).

I'll cut back on eating out, I've already cut back on drinking , I don't do coffee's. I won't let it affect my holiday budget though, always got to have one or two holidays a year to get away from it all.

MrDT

Here's my take on the points listed:

First of all the sacrifices:

I eat out a fair bit, maybe once a week or so. Still, you gotta eat, and it's cheaper going out for a meal than going out and getting horribly drunk. It's also far more pleasant, and doesn't ruin the next day (or two). If I needed to save the extra money I'd drop the meals out, but I don't have to, so I don't. It's not like we eat out at expensive places, more often than not it's a nice pub meal.

Holidays abroad and weekends away, hmm. Just been on holiday, and considering going away for a short break for New Year. A weekend away in the UK is nice every once in a while too, but more often than not will involve sofa surfing with mates or a cheap deal like one of those £1 hotel dealios. I could live without, but would rather not if I can help it.

New clothes... Bought a pair of trainers for £15 a few weeks ago, and spent £30 on three pairs of shorts and three tshirts around the same time. Don't think I bought any other clothes this year. I tend to get a load at Christmas time, and they last. I don't do clothes shopping, definitely something I can live without. Shopping is NOT a substitute for a hobby lol!

Coffee and lunch. Don't do coffee. Lunch, I try to sort a packed lunch, sometimes I eat at the canteen (if I'm lazy), it doesn't cost the earth - though if I got my act together and needed to save every penny I'd cut this out and just have a packed lunch every day.

Reducing alcohol consumption, check. Maybe a 'proper' night out once a month, a 'pint or two' maybe once a week/fortnight, and 'a can' at home maybe once a week. I don't spend anywhere near as much as I used to on beer!

Quitting smoking. Yep. I wanted to do this for other reasons, but money was the #1 factor really. I still have a smoke or two in sociable situations, but at least it's now more like two or three a week as opposed to the previous twenty a day

Delaying having children - ha! As my previous reply may have hinted at, this is something I'll be doing for some time I hope. This has nothing to do with house prices, I just don't want kids for a while. A long while if I can help it

Getting married, ditto the kids thing. No ta, no rush, nothing to do with houses

Owning a pet, don't want one, so uh, not really a sacrifice.

Car ownership, yep, I ditched the car. I might get another one soon though, bit more of a hassle than anticipated. Even though I've not got the car now, I'd list this as low on my list of 'willing to sacrifice', because although I have sacrificed it, I feel the need to replace it thus undoing said sacrifice!


General moneysaving:

Lowering expectations of the property - quite the opposite. Instead of tiny two bed I'm looking at larger property that would still be affordable.

Changing shopping habits - I try to plan shopping out in advance (lists etc) not a major change to habits though, maybe this applies more to those that go out clothes /gadget shopping on a saturday because they're bored, that's not my idea of fun.

Trading on ebay - I should, I have junk to get rid of, but I can't be bothered with the hassle.

Reducing the amount of energy used - I try to keep the bills down but there's not an awful lot I can do really; switch stuff off when not in use, warm clothes as opposed to heating cranked to the max, that's about all I can think of.

Taking a second job - that's a step too far for me, and probably wouldn't go down too well at work anyway.


Regarding the property:

No extra bathrooms - never thought to look at properties wih more than one bathroom, not much of a compromise then.

No garage - didn't expect a garage, again, no compromise.

Outdoor space - I want a yard, a small one, no garden, no work. Shouldn't be an issue, I wouldn't go for no outside space at all though, won't compromise on that (bbq!)

Extra bedroom - I need a bedroom, and an office would be nice. The fact that I'm looking at 3/4 beds as opposed to 2 beds suggests that I wouldn't compromise here, no way. Extra bedrooms would be split condom insurance lol!

Garden - don't want one, not a sacrifice. Garden suggests work and hassle.

Size and location - definitely won't compromise, I'm selective on location especially. Size, well the way things are any house I'd buy needs to have 'room to grow' (I see extra bedrooms and large living areas as futureproofing).

harbinger13

neverdespairgirl wrote: »

It's weird how many more people delay having children than sell the car!

Very true - people wait and wait and then get into expensive/complicated procedures to give birth. On most occasions the child is born with defects - though the external procedures claim that their success rate is high - it is still an experiment and it goes wrong. The argument that birth defects are possible even when conceived naturally holds true - but human pshyce is to blame the experiment or the process more - rather than what happens naturally. Unfortunately a sick/child with birth defects costs more - first of all emotionally and then even the expenditure is higher - nanny, constant care - lost earnings etc. I do apologize for evaluating love to money, but sorry, we live in Financial Times.

BTW 19.5K will get what type of house? If this is 20% deposit - assuming these FTB's are responsible buyers - it would mean the house price should be 100K. Hmm what does 100K get us in London? Garage in Kensington.

Outside London, if my memory serves right, the average house is 150K-160K (or is it 180K)? So this 20K seems to be short of the required 20%

So my conclusion is either the house values are STILL BLOATED or there is no make-enough-downpayment syndrome in our FTB's yet.