FTBs reveal real cost of homeownership
Six in 10 first-time buyers say getting onto the property ladder came at the expense of their quality of life
From holidays and hobbies to careers and starting a family, first-time buyers reveal the true cost of homeownership
New research by Yopa has revealed that 61% of first-time buyers say saving for their first home had a negative impact on their quality of life, with many sacrificing far more than everyday luxuries in pursuit of homeownership.
Yopa surveyed first-time buyers who have purchased their first property within the last two years, looking at the financial and personal sacrifices made to get onto the property ladder, how long they spent saving and, ultimately, whether they believe it was worth it.
More than just cutting back on luxuries
The research found that first-time buyers commonly sacrificed meals out and takeaways, holidays abroad and nights out with friends in order to save for their deposit.
Other sacrifices included clothes shopping, concerts and festivals, gym memberships and even hobbies and sporting activities, highlighting the extent to which prospective homeowners have been forced to prioritise saving over their everyday lifestyles.
In fact, 61% of those surveyed stated that saving for their first home had negatively impacted their quality of life. Some 13% reported a significant negative impact, while 24% said the impact was moderate and a further 24% experienced a minor negative impact.
Major life milestones put on hold
However, Yopa’s research also found that the sacrifices made by first-time buyers extend far beyond holidays, hobbies and socialising, with major life decisions also being put on hold.
Changing jobs or pursuing a different career was the most commonly cited life decision delayed, followed by having children or expanding a family, moving out of the parental home and getting married.
Others delayed getting a pet, further education or professional training, or even starting their own business, demonstrating how the pursuit of homeownership can influence wider personal and professional ambitions.
The research also found that first-time buyers went to considerable lengths to boost their savings, most commonly working overtime or additional shifts, relying on financial gifts from family or friends, or selling personal possessions.
Years spent saving for a first home
For many first-time buyers, the road to homeownership was a lengthy one.
Almost three-quarters (73%) spent at least three years actively saving towards their first property, with 23% taking between five and six years, 16% between seven and 10 years and 17% spending more than a decade building their savings.
The research also found that 46% committed more than 20% of their monthly disposable income towards their first home, with 9% putting aside more than half.
Even after making these sacrifices, many buyers were forced to compromise on their eventual purchase, most commonly accepting a smaller property, a less desirable location or a home requiring more work than originally planned.
But was it all worth it?
Despite the personal and financial sacrifices made, the overwhelming majority of first-time buyers believe their efforts were worthwhile.
Yopa found that 88% of those surveyed believe the sacrifices they made to purchase their first home were worth it.
Just 12% felt that the sacrifices they had made were not entirely, or not at all, worth it.
Government support must address supply, not just demand
The findings come ahead of the Autumn Budget, when the Government is expected to confirm further details of its proposed Your First Home scheme, allowing eligible first-time buyers to purchase qualifying new-build properties with deposits as low as 2.5%, supported by a 20% Government-backed equity loan.
However, while such initiatives could help reduce the upfront costs associated with purchasing a home, questions remain over whether increasing purchasing power without sufficiently addressing housing supply risks further inflating property prices.
CEO of Yopa, Verona Frankish, commented:
“It’s clear that first-time buyers need help getting onto the property ladder, and our research demonstrates the extraordinary lengths people are willing to go to in order to achieve that ambition. For many, it’s not simply a case of sacrificing holidays or nights out, but putting major life milestones on hold, delaying career progression and spending years saving every spare penny.
“The fact that the overwhelming majority believe those sacrifices were worth it shows just how important homeownership remains. However, the reality is that years of initiatives designed to stimulate buyer demand have failed to resolve the underlying affordability challenge and, in some cases, have contributed to higher house prices.
“So while it’s encouraging that the Government recognises the need to support first-time buyers, there is a very real danger of repeating the mistakes of the past. Schemes that increase purchasing power without delivering sufficient additional housing risk pushing prices higher, while those buying with very small deposits could find themselves particularly exposed to negative equity should property values fall, especially where new-build premiums are involved.
“What we really need to see is meaningful action to increase the supply of homes that first-time buyers can genuinely afford, rather than another initiative that primarily fuels demand. Helping people onto the ladder is important, but ensuring they can purchase a suitable home at a sustainable price is just as crucial.”
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