First-time buyers are cutting back on Netflix and Amazon Prime to help save for a house deposit, says Rightmove

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  • First-time subscription buyers cancel their subscription to save on the deposit.
  • First-time shoppers are also cutting back on going out and spending on food.
  • Only 16% of first-time buyers said they received financial assistance from a family.

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First-time buyers are ditching subscription services like Netflix and Amazon Prime and cutting back on travel to save more on buying their own home.

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Rightmove said these shoppers are also using less gas and electricity at home and are even cutting back on the amount they spend at the grocery store.

The study outlines the most common ways new buyers cut their spending to save more on deposit.

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Wallet tightening: New shoppers are canceling subscription services like Netflix and Amazon Prime to save more on deposit, Rightmove research says.

Lifestyle changes that allow new shoppers to save more of their income include spending less on holidays.

Only 16% of new buyers said that all of their deposit will be raised with the help of family and friends.

Mark Harris of mortgage broker SPF Private Clients said: “Deposit has long been a major barrier to home ownership for new buyers, especially those in London and the South East where property prices are very high. No wonder so many people seek financial help from Mom and Dad Bank.

“It’s also not surprising that potential buyers are cutting bills where they can and saving money on deposit, especially with the cost of living skyrocketing.

“As rents also rise, areas where savings can be made are targeted, such as energy and food bills and going out.”

Actions to reduce costs and save on deposit First time buyers
I have reduced travel and eating out expenses. 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 essentials 48%
I’m canceling subscriptions like Netflix, Prime, Disney+ 35%
i go shopping more 32%
I sell the things that I have 27%
Take on extra work 24%
I use more credit than usual fifteen%
Moved back to my parents 7%
Source: rightmove

Rightmove’s research went on to show that it usually takes five years for a first time buyer to accumulate their deposit.

Meanwhile, the average monthly mortgage payment for a new buyer taking out a two-year fixed mortgage with a 10 percent deposit is now £1,324.

That’s 41% higher than the average monthly rent of £940 after the mortgage interest rate hike, Rightmove said.

The average monthly mortgage payment for new buyers taking out a mortgage with a 25% deposit is £1,082, 15% higher than the equivalent average monthly rental payment, highlighting the difference in monthly payments for those who can afford it . to accumulate a larger deposit.

Do it alone: ​​Only 16% of new buyers said they would raise their entire deposit with the help of family and friends.

Do it alone: ​​Only 16% of new buyers said they would raise their entire deposit with the help of family and friends.

The study also looked at what is most important to first-time buyers purchasing their first home.

A three-bedroom semi-detached house is the most popular type of property buyers are looking to buy outside of London, while London-based buyers have set their sights on a two-bedroom apartment.

While first-time buyers and more experienced buyers appreciate similar features in a home, new buyers are placing more emphasis on energy costs, spare room, and work-from-home space.

Experienced buyers preferred the garden more than the novice buyers, as well as the parking space and garage.

home function Importance for new buyers Important for experienced buyers
There is a garden 26% 31%
There is a parking space fifteen% 16%
Energy consumption of the object fourteen% ten%
There is a free room 13% ten%
Space to work from home 12% 9%
There is a utility room 7% eight%
Pets allowed in the house 7% 7%
There is a garage 6% ten%
Source: rightmove

Demand in the new buyers sector is down 26% compared to last year’s hot real estate market.

However, new buyer demand is still 4% higher than in 2019, up two and a half years of market frenzy.

Tim Bannister of Rightmove said: “The sudden rise in mortgage rates has meant that first-time homebuyers have had to reassess their position very quickly.

“For example, those who already had a mortgage offer are trying to rush into a purchase in order to keep a lower rate.

“Many of those who have not yet received an offer and found that the monthly payments they will pay on the mortgage were much more expensive than planned, or had to budget for additional expenses, look for cheaper properties and borrow less, or not at all. put your plans on hold.

“Now that mortgage rates have started to stabilize, new buyers will be hoping there are no surprises in today’s fall budget and they can start getting long-term confidence and financial confidence after what has been a tumultuous and very two months of uncertainty.

“Despite the many major challenges that new buyers are currently facing, the fact that demand in this sector is still exceeding the last normal market of 2019 shows that right now there are many motivated new buyers who are still determined to get into the market. stairs.’

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