Abbey first-time buyer deposit research

1. Research by Abbey Mortgages has revealed first-time buyers (FTBs) have squandered £1.98 billion from their deposit nest eggs.

2. The study questioned 1,288 prospective property owners on their deposits.

3. Figures were based on the average estimated deposit size multiplied by the average deposit spent.

4. The study showed that 42 per cent of Britons saving for a deposit on their first home have spent a combined £1.9 billion from the saved cash.

5. This was almost four times the 11.2 per cent who did so last year.

6. The research suggested that deposits are being spent on a wide variety of items.

7. For 52 per cent, the money went on fashion items and gadgets.

8. 25 per cent, or 90,000, used it to buy new cars.

9. This was particularly the case for men, 69,000 of whom have raided their deposit savings to fund a car purchase.

10. Yet, day-to-day living costs were cited as a large factor by 53 per cent of potential FTBs.

11. Nevertheless, 50 per cent of those questioned confessed to using the money for holidays.

12. A further 4 per cent used the savings to fund weddings and other celebrations.

13. The average FTB estimated they needed to save £22,800 to get on the property ladder.

14. On average, FTBs believe this would be achievable within three-and-a-half years saving.

15. Yet, the report showed that regionally figures varied widely.

16. Those in Scotland need to save £13,000.

17. This was compared to the South East’s £35,000.

18. 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.”

19. However, she added that if FTBs remained single minded and set realistic savings target, it could get them on the property ladder sooner than thinking.

20. Audhlam-Gardiner commented: “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.”