There is one thing that I feel gets constantly missed in the whole “millenials are irresponsible whiners that want to have their housecake and eat it”: The issue may not be the desposit, it may be the affordability:
We did manage to save up £40k over 5 years. But when it came to assessing affordability thinking ‘well done, finally we can buy a house’. But lenders wouldn’t believe that we could spend £100 a month more on a mortgage than we were currently spending on rent, despite having saved on average over £600 per month for the previous 5 years. Our deposit as such was big enough, but because of frankly nonsensical affordability assessments we still needed our parents’ help to make up the shortfall between the maximum that lenders were willing to give us on our income and the price of the property we wanted.
Or, to look at the example of the author:
- house price: £350k
- assumed deposit, supposedly reachable in 4-8 years: £35k
- remaining mortgage amount: £315k
- income: £40k.
- maximum mortgage she’ll get: (usually) 5 times income = £200k
- shortage: £115k
Even if she considers her maximum potential savings of £8.4k per year (which is ambitious on a 40k income in London!), it will take her almost 18 years to save up the £150k she needs in order to get a mortgage for a £350k house with her income. Alternatively she needs to get a payrise to £63k…
So, if you actually are frugal, always take packed lunches to work, never go out on weekends, don’t travel the world, you can save up that amount of money over a few years. It’s entirely possible, and not even particularly hard. But lenders don’t think your mortgage is affordable anyway, so you can as well leave it…