first-time buyers risking budget overspend on style over substance
The cost of styling their new homes for a social post may be costing first-time buyers more than £11,000, according to a study.
A survey of 1,004 people by Skipton Building Society found first-time buyers are budgeting an average £11,263 for their first properties, as many turn to Instagram for styling tips to craft the perfect social media post to show off their new home.
Buyers said in the survey they plan to spend about £5,003 on renovations, £3,543 on furniture and £2,716 on soft furnishings.
Many aspiring homeowners are budgeting for new carpets (31%), building an extension (9%) and new furniture (41%), while 12% of aspiring homeowners say that they would choose a property specifically for its Instagram appeal.
But while decorative elements were perceived as easily handled by the new home-buyers, the fundamentals of surveying, legal aspects and the buying process remained unclear for most.
Style v surveying and legal checks
While 77% of prospective home-buyers believe handling the home interiors will be within their capability, many admitted to feelings of uncertainty around the technical parts of property purchase.
Nearly six in 10 (56%) said, “it’s the legal aspects” that are causing them home-buying bewilderment, and cited “understanding the surveying requirements” as a concern.
Overall, almost a quarter (24%) are worried about their knowledge of the actual property buying process and almost a third (30%) simply don’t know where to start with organising a mortgage for home-buying.
When it comes to cutting down costs, many first-time home-buyers are very clear on their interior goals and how to make them happen, with many unwilling to compromise from their expensive aesthetic aspirations.
Only a quarter (24%) would be willing to save sums through buying cheaper furniture and decor – leaving over three-quarters (76%) unwilling to make the respective sacrifice.
And Instagram-styled properties are also of deal-breaker importance for some. When prospective homeowners were asked what worries them most about the home-buying process, 17% said not being able to afford to furnish the property as they’d like – notably more than the 16% who were worried about having the sale fall through.
The survey also uncovered the property wants of aspiring first-time homeowners.
Top 10 things aspiring homeowners would like when choosing a home
Good parking (40%)
A garden that gets the sunshine (39%)
Easy commute to work (33%)
An en-suite (27%)
Near good schools (23%)
Good entertaining space inside and out (21%)
Low maintenance garden (20%)
A walk-in wardrobe (19%)
Stunning view (19%)
A funky/modern kitchen with appliances (17%)
Personal finance expert Iona Bain said: “First-time buyers are so wrapped up in raising a deposit, they forget that this is just the first of many costs that come with home ownership. The financial challenges don’t end when you get the keys in your hand.”
Bain advises to consult mortgage broker or bank to understand purchase process, but warns against superficial fads. “New homeowners should ignore influencer-driven fads and stick to classic, durable interiors that won’t need regular – expensive – upgrades and real structural improvements that add value to property, such as a downstairs loo. When splashing the cash, think carefully about how long you’ll stay and whether … changes will look quite as good in five years – or to a future buyer.”
Alex Beavis, head of mortgages at Skipton Building Society, advises to be financially prudent. “When buying a home, it’s important to ensure you’ve got the costs of surveying, legal fees and room for negotiation on the price covered first. While it’s tempting to rush out and get the Insta-worthy look that you want, pacing yourself financially is important.
“It may mean that you’ve less left over initially for interiors – but this is often something that can be dealt with over the longer-term rather than stretching yourself to do everything at once.”
Meanwhile, Bain shares her top tips for property buying:
Top tips for first property purchase
Make sure you’re sure
“Owning home can allow you to escape the rental trap and tends to be cheaper than renting because you can pay down your mortgage over time. Personally, I’d always advocate saving for the future, but buying property is both a financial and personal decision – it’s important to ask yourself why you’re doing it because it’s not all about money.”
Take your time
“Research the areas where you want to put down roots. Be objective about the neighbourhood: is it genuinely up-and-coming, with more local investment on the horizon? Is it served by good transport links? Is it near good schools and amenities? Your circumstances might change so it may be unwise to limit your options too much. If that means saving a bit longer to buy a more versatile property, so be it.”
Get to know your LTVs
“The loan-to-value ratio on a mortgage tells you how much you’ll need to raise for a deposit versus what your bank/building society will lend you. So, a 95% LTV mortgage means you’ll have to cough up 5% of the property’s value. The higher the deposit, the lower the interest rate. So, you (or your mortgage broker) can find much better mortgage deals if you can save up more – even 10% makes a big difference compared with 5% and reduces your chances of negative equity, should house prices fall below what’s left on your mortgage.”
Look for diamonds in the rough!
“Many first-time buyers crave so-called “turnkey” properties, with immaculate décor and swish fittings all there as soon as you move in. In truth, you’re more likely to find genuine bargains in more desirable areas if you’re prepared to roll your sleeves up and do some work to the property. This is daunting if you’re not used to DIY, but the key is to look for “tired” properties that need mostly cosmetic updates – fresh paint here, new flooring there. If in doubt, getting a full survey done should tell you if there are more structural problems that can’t be easily fixed.”
Supercharge your savings
“Once you have your heart set on property ownership, it’s time to revamp your budget so that you can save whatever you can. Slim down your bills by regularly switching providers and get to know exactly what you’re spending with the help of clever budgeting apps. Finally, take advantage of free government money with the help to buy or lifetime Isa. The help to buy Isa tends to suit those who are buying sooner or are not sure if they want to buy property as it comes with no penalty for withdrawals. The LISA is more rigid, but it allows you to save more for longer, so it’s the better option if you’re really committed to the home-buying dream.”