While the UK property market may have experienced a slowdown in recent times, annual growth levels remain buoyant. The number of new listings for sale increased by 23.3% year-on-year during February, for example, while the number of properties actively sold rose by 37.6%. The cost of real estate also continues to rise, forcing some aspiring home-owners to abandon their short-term dreams of successfully investing in property.
How Far Would You Go to Save for your Own Home?
Despite this, new research carried out by online estate agent Hatched suggests that such a goal can be achieved simply by cutting out the unnecessary, modern luxuries that shape our daily existence.
This in itself represents a sacrifice, however, so the question that remains is whether aspiring home-owners are willing to give up these luxuries in order to save a deposit for a piece of real estate?
To put this into context, let's take a look at these luxuries in close detail and determine how a few simple sacrifices can help you to achieve your objectives: -
1. Your Daily Caffeine Fix
Let's start with your morning cup of coffee, which for many provides a kick-start to their working day. Buying a single cup each day equates to 252 beverages during a single year, however, which at an average price of £2.70 drives a total, annual spend of £680.000.
Over a period of six years, this creates total savings of £4080, which in turn represents a significant contribution for your deposit. Would this be incentive enough to give up your morning caffeine hit, however, or do you consider this to represent a step too far?
2. The Summer Holiday
This mat well be the big one for some, but sacrificing your summer holiday represents an excellent way of building your deposit over time.
Even if we operate at the lower end of the scale, the amount of money saved by such a measure can have a significant impact on your efforts. Let's assume that your average summer trip, including spending money, delivers a total spend of £554.50. This gives us an estimated, six-year saving of £3,327, while this will rise considerably if you are used to more lavish holidays.
So while this is a huge sacrifice, it is a short-term one that can deliver huge returns.
3. Forgo Your Gym Membership and Body Maintenance Tasks
This may seem counter-productive to some, particular as your gym membership remains central to maintaining a healthy form. It is possible to stay in shape without paying a monthly membership fee, however, while other body maintenance measures can also be considered as unnecessary for a short period of time.
On average, the average annual gym membership fee is £627 (including your signing-up fee), while the typical UK citizen spends up to £876 per annum on spa and beauty treatments. This is a total, annual spend of £1503, and by eliminating these over the course of six years you can save a quite staggering £9,018.
Initially this may seem like a drastic sacrifice, but the fact that it equates to more than 30% of a £30,000 house deposit cannot be ignored.
The luxuries listed here may be part of our everyday lives, but they are not fundamental expenses and sacrificing can help you to accumulate significant savings. The ideas referenced here alone amount to a six year saving of 316,425, which by itself is a huge contribution towards a house deposit. In the full infographic produced by Hatched, the eight measures mentioned totaled even more impressive savings of £32,599, which can of course be added to any existing savings contributions that you already make.
So there you have it; they key to building a deposit in the modern age lies with living a more modest lifestyle. This only question is whether you are willing to do this to achieve the goal of home-ownership?