"Getting on the property ladder in London is a real challenge for first-time buyers, and it’s not surprising to us that many are having to look beyond their main source of income to save the amount needed for a deposit"
- Diana Alam - NHG Homes
Young people in London are taking on second jobs to get onto the property ladder, new research has shown.
Market analysis from NHG Homes has found that 81% of first-time buyers in London from all age groups surveyed do not have access to a deposit of over £40,000 – the 10 per cent you may need to buy an average one-bedroom home on the capital’s open market. The research found that the average deposit held by potential buyers surveyed is just £22,963.
NHG Homes, part of the housing association Notting Hill Genesis, partnered with Opinium to survey 500 adults in London who were looking to buy their first home. The research looked to understand the key considerations of first-time buyers, including perceived barriers and key motivations for home ownership.
Family providing a helping hand
In search of alternative ways to save, many first-time buyers have been turning to family for financial support, and it’s not just the ‘Bank of Mum and Dad’.
Nearly one in five (18%) buyers surveyed aged 18-34 say they’re planning on using money from family members who aren’t their parents to help with housing. Similarly, a quarter of respondents aged 45-54 are planning on using inheritance money as a way to fund their deposit.
Mum and dad are still a key source of support for some though, with a quarter of respondents aged 35-44 saying they’re relying on money from their parents to fund the amount needed for a deposit. Just under a quarter (23%) of those in relationships also plan on using mum and dad to help finance their first home.
NHG Homes’ research revealed that nearly half of first-time buyers surveyed (48%) said they would consider using a Shared Ownership scheme if it meant they could purchase a property in London. For those struggling to save, Shared Ownership can offer a more accessible route to home ownership, with the amount required for a deposit being much smaller than buying on the open market – it can be as low as four figures.
Different priorities for stages of life
In addition to revealing how different age demographics are saving for a deposit, the research also showed how the things people would be willing to sacrifice to get on the property ladder vary by stage of life.
While two-fifths (43%) of 18-24-year-olds would be willing to hold off on having children to buy their first home in London, less than a quarter of those aged over 25 would be happy to make the same sacrifice.
But when it comes to growing the family with a cat or dog, less than 20 per cent of 18-24-year-olds (19%) would postpone getting a pet to finance a home, and a third of 25-34-year-olds (33%) would be happy to make the sacrifice if it got their foot on the property ladder.
TikTok versus tradition
NHG Homes found that word-of-mouth is still key to purchasing decisions, with the most common place that first-time buyers go for financial advice being their friends or family – nearly half of those surveyed (49%) say they phone home to ask about money. This rises to over two-thirds of 18-24-year-olds (69%).
Research also shows that while social media is becoming the holy grail for younger generations looking for financial advice, money-saving experts are the preferred choice for first-time buyers aged 25-54 in London.
The most popular source of knowledge for 18-24-year-olds outside of friends and family is social media, with a third (33%) saying they get their money tips from platforms like Instagram and TikTok. In contrast, less than 20% of respondents aged 25-34 use social media as a source of financial advice – this figure falls to 12% for those aged 35-44 and drops further still for those aged over 45 to 7%.
Money-saving experts like Martin Lewis are used by a third (32%) of those aged 25-54, while this resource is only used by 14% of 18-24 year olds.
Diana Alam, director of sales and marketing at NHG Homes, explains: “Getting on the property ladder in London is a real challenge for first-time buyers, and it’s not surprising to us that many are having to look beyond their main source of income to save the amount needed for a deposit.
“Whether it be getting a second job or asking family members for a helping hand, this research has shown that buying through the open market in the capital requires more than simply setting money aside every month – particularly for younger buyers.
“The proportion of first-time buyers that would consider using Shared Ownership to purchase in London shows just how important it is to offer more affordable routes to home ownership. We’re proud at NHG Homes to offer properties across the capital that require deposits as low as four figures, meaning first-time buyers don’t have to choose between staying in London and getting on the property ladder.”
