First time buyers squander £1.98 billion from nest eggs

Two fifths (42 per cent) of Britons that are currently saving up to own their first home have blown a combined £1.9 billion from money saved towards a deposit, according to new research from Abbey Mortgages. That’s almost four times the 11.2 per cent who did so last year.

Indeed Abbey Mortgages findings suggest that deposits are being spent on a wide variety of items. 190,000 (52 per cent) are finding the lure of the latest fashion items or shiny new gadgets too much to bear. Cars are also a big distraction to 90,000 (25 per cent), in particular men - 69,000 of whom have raided their nest egg to fund a new motor.

The day-to-day cost of living was also cited as big factor by 192,000 people (53 per cent). Despite this, 183,000 (50 per cent) of those questioned confessed that they had dipped into their property pot for a holiday, while 13,000 (4 per cent) did so to fund weddings and other celebrations.

The average first time buyer estimated that they would need to save up just under £23,000 (including associated fees) to put them in a position to buy a property. And they felt this was achievable within three-and-a-half years. However regional figures varied dramatically, with those in the South East estimating they would need as much as £35,000 compared to £13,000 in Scotland.

Nici Audhlam-Gardiner, Director of Abbey Mortgages, commented: “Saving £23,000 or more for a deposit is no mean feat, particularly if you let distractions get in your way. But if you’re single minded and set yourself a realistic savings target then you could find yourself making an offer on a house sooner than you think.

“First time buyers may be more tempted to dip into their deposit savings this year because of the uncertainty in the market and prospect of falling house prices. However there are still very good reasons for people to get on the housing ladder, as property continues to be a good investment for the longer term.

“Abbey Mortgages provides mortgage advice for first time buyers and special mortgage deals for those entering the property market, including great rates, lower deposit requirements, free valuations and cashback towards legal costs.”