Research from MoneySuperMarket has revealed that 58% of British homeowners made tactical changes to their spending habits in order to save for their first home.
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 32% actively paid off existing debts in the run up to their mortgage application.
9% also used cash more frequently during this timeframe to ensure lenders couldn’t see everything that was being paid for.
The study spoke to over 4,000 UK adults, of whom 1,387 currently have a mortgage, to reveal the spending behaviours they curtailed in the run up to buying their first home. The spending they most restricted was eating out (37%), going on holiday (31%), ordering takeaway (31%) and buying clothes (30%).
Over a tenth 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. 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).
Meanwhile, 14% of people are not aware that their credit score directly affects their ability to get a mortgage.
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.”
