Millennials priced off the London housing ladder could save enough for a deposit in five years by giving up six “luxuries” ranging from phone upgrades to overseas mini-breaks, a city estate agent has claimed.
New analysis suggests that potential homeowners from “generation rent” could accumulate the £64,000 they need for an average London deposit, after help from parents, within half a decade by making “relatively small changes” to their lifestyles, the Evening Standard has reported.
According to the calculations from agents Strutt & Parker, giving up a night out once a week could save more than £6,000 a year, and cutting out takeaway meals would knock £2,640 off household spending.
Preparing lunch at home rather than buying sandwiches or salads saves £2,576 on average, and cutting out an annual foreign city-break could be worth another £700 a year.
Finally, Strutt & Parker suggests that the average annual Lottery habit, costing £832 a year, could be sacrificed.
A mobile upgrade typically takes up a further £154 annually.
Stephanie McMahon, head of research, said: “Affordability is a problem for every major city around the world.
“In London, it is raising the deposit that is a particular challenge.’
“Getting on the property ladder in London is harder than ever, and with an average deposit of £94,000, people are thinking, ‘What luxuries am I willing to forgo now that will pay off five years down the line?’
“Those lucky enough to have family that can help will receive an average of £29,400 towards their goal, but that still leaves £64,000 to find.
“Our research has shown that if a couple sacrifices six luxuries for at least five years, they can put away significant savings to help stretch up to that all-important first rung.”
Earlier this year Australian property mogul Tim Gurner urged millennials in Melbourne to stop buying avocado on toast and expensive coffees and save more towards a deposit.
Rates of home ownership among young Londoners have collapsed over the past 25 years as the spiralling market has lifted the bottom rung of the ladder out of reach.
Since 1990, the proportion of 25- to 34-year-olds in London owning has dropped from 57 per cent to 27, leading to claims that millennials have become “generation no hope”. It has also triggered a spike in young workers moving to the suburbs.