10 Sep 2020 • 3mins • Fonk

Is your ‘fun budget’ really eating up your chance of home ownership?

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Are millenials having too much fun? The question goes back farther than the infamous avocado toast controversy and the debate still carries on. From bottomless brunches to the post-party Uber ride, the little luxuries may add up, but whether or not they're really keeping us from the home-ownership dream is another matter.

In fact, how we budget and save is far more complex, and, more importantly, personal, than that type of question can capture. There's a reason why we divide spending budgets into 12 different categories in the Yolt app (and the Yolt community has actually asked for even more). It seems unlikely that fancy breakfasts are to blame for millennial saving woes - at least according to the top spending categories in the Yolt app. Instead, it probably comes as no surprise that housing and groceries boast the highest spend totals.

You probably knew this already, but still, the myth remains: Millenials are overspending where it doesn't really matter, and we only have ourselves to blame when we can't afford that semi-detached with the lovely back garden. As a group of Londoners feeling the housing heat, the Yolt team wanted to delve into this myth a bit further. So, we decided to crack the numbers for ourselves and see just how much our ‘eating out’ and ‘leisure’ budgets really impact our chances of affording a first-time buyer deposit.

The average house deposit for first-time buyers in London is £106,577

London Deposit2

With the latest Halifax First Time Buyer Review showing that the average house deposit for first time buyers in London is £106,577, the city's every-day millenial would have to do some serious cutbacks on their favourite 'luxuries' to get onto the property ladder. To be exact, 10,658 three-mile Uber trips, 17,763 small glasses of wine, or 41,309 takeaway coffees. In other words, by just relying on the money saved from cutting that daily morning caffeine intake, it would still take a prospective buyer 15 years to save for a deposit!

The cost of a deposit in London, measured in some of our favourite fun activities:

Icons London Deposit5

So, back to the original question. Is your ‘fun budget’ eating up your chance at home ownership? Unless you’ve splashed out on 2753 coffees this year, probably not. Looking at the numbers above, it would appear that the little ‘luxuries’ that make us happy are far from the largest obstacles facing first-time buyers in London. In fact, they might be the only things keeping us sane when faced with the more likely, and far more complex, culprit: The culmination of the staggering every-day costs of living in the great and costly city so many of us call home. But when in doubt, Mum’s golden piece of advice might help: Everything in moderation.

And, before you jump ship and leave London’s staggering housing prices behind, it’s worth noting that the aforementioned (and eye-watering!) £106,577 deposit is an average that includes housing in both London’s most and least expensive boroughs. It goes without saying that the average deposit in Hammersmith and Fullham (£190,518) is boosting the London average considerably, especially when compared to a more palatable deposit in Barking and Dagenham (£50,926). And if you’re eyeing up the market outside of London’s borders, the average first-time buyer deposit decreases dramatically to £32,899.