First-time buyers are cancelling subscription services such as Netflix and Amazon Prime while also cutting back on going out in a bid to save more to buy their own home.
Rightmove said these buyers were also using less gas and electricity at home, and were even cutting back on the amount that they spend on a food shop.
The study outlined the most common ways that first-time buyers are reducing their spending to save more towards a deposit.
Tightening the purse strings: First-time buyers are cancelling subscription services such as Netflix and Amazon Prime to save more for a deposit, says Rightmove study
The lifestyle changes that are allowing first-time buyers to save more of their income include spending less on holidays.
Only 16 per cent of first-time buyers said all of part of their deposit would be raised with help from family and friends.
Mark Harris, of mortgage brokers SPF Private Clients, said: ‘The deposit has long been the main barrier to getting on 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 assistance.
‘It’s also not surprising that would-be first-time buyers are cutting bills where they can and putting money saved towards the deposit, particularly as the cost of living is soaring.
‘With rents also rising, those areas where economies can be made are the ones being targeted, such as energy and food bills and going out.’
| Action to reduce spending and save more towards a deposit | First-time buyers who took this action |
|---|---|
| I’ve reduced spending on going out or eating out | 72% |
| I’m using less energy such as gas or electricity at home | 55% |
| I’m spending less on holidays | 49% |
| I’m spending less on food and essentials | 48% |
| I’m cancelling subscriptions i.e. Netflix, Prime, Disney+ | 35% |
| I’m shopping around more | 32% |
| I’m selling things I own | 27% |
| Taking on additional job | 24% |
| I am using credit more than usual | 15% |
| Moved back in with my parents | 7% |
| Source: Rightmove |
The Rightmove study went on to reveal that it is typically taking a first-time buyer five years to save up their deposit.
Meanwhile, the average monthly mortgage payment for a new first-time buyer taking out a two-year fixed mortgage with a 10 per cent deposit is now £1,324.
It is 41 per cent higher than the average monthly rental payment of £940 following mortgage interest rate rises, Rightmove said.
The average monthly mortgage payment for new first-time buyers taking out a mortgage with a 25 per cent deposit is £1,082, which is 15 per cent higher than the equivalent average monthly rental payment, highlighting the difference in monthly payments for those that can afford to save up a bigger deposit.
Going it alone: Only 16 per cent of first-time buyers said all of part of their deposit would be raised with help from family and friends
The study also looked at what is most important to first-time buyers when purchasing their first home.
A three-bedroom semi-detached house is the most popular property type that first-time buyers are hoping to buy outside of London, while London first-time buyers have their sights set on a two-bedroom flat.
While first-time buyers and more experienced buyers value similar features in a home, first-time buyers placed more emphasis on energy costs, a spare room and space to work from home.
Experienced buyers prioritised a garden more than first-time buyers, as well as a parking space and garage.
| Home feature | Importance to first-time buyers | Importance to experienced buyers |
|---|---|---|
| Has a garden | 26% | 31% |
| Has a parking space | 15% | 16% |
| Energy costs of the property | 14% | 10% |
| Has a spare room | 13% | 10% |
| Space to work from home | 12% | 9% |
| Has a utility room | 7% | 8% |
| The home is pet friendly | 7% | 7% |
| Has a garage | 6% | 10% |
| Source: Rightmove |
Demand in the first-time buyer sector is down 26 per cent compared to the hot property market of last year.
However, first-time buyer demand is still 4 per cent higher than 2019, before two and a half years of a market frenzy.
Tim Bannister, of Rightmove, said: ‘The sudden nature of mortgage interest rate increases has meant that first-time buyers have had to very quickly reassess their position.
‘For example, those who already had a mortgage offer in place are trying to rush through their purchase to keep their lower rate.
‘Many of those who had not yet secured an offer and found that the monthly repayments they would pay on a mortgage were a lot more expensive than planned, either had to budget for the extra costs, look for a cheaper property and borrow less, or pause their plans altogether.
‘Now that mortgage rates have started to settle down, first-time buyers will be hoping that there are no surprises in today’s Autumn budget, and they can begin to get some longer-term assurance and financial certainty after what has been a turbulent and very uncertain two months.
‘Despite the many significant challenges facing first-time buyers at the moment, the fact that demand in the sector is still above the last normal market of 2019 shows that there are many motivated first-time buyers right now who are still determined to get onto the ladder.’
