Housing
February 6, 2018

Give up Avocado on Toast, Gain a Deposit for Housing? A 26 year old's View of Buying in London


 
From the always affable Daily Scot, Scot Bathgate sends this rather cheeky article from The Guardian where 26-year-old Elle Hunt who defines herself as “squarely a millennial” decides to account for all her purchases to see if she can save up for a down payment on a place. And she is in London England. As Ms. Hunt notes “House prices have grown faster than rents and incomes, moving far beyond what is considered affordable, especially for twentysomethings. The only people my age I know who have bought a house have done so outside London, as part of a couple, with help from their parents or all three. But you wouldn’t know that from the commentators who argue that a deposit would be within the grasp of all millennials – if only we would cut back on takeaway coffee and avocado toast.”
“But I find the argument that I could afford a house simply by going without luxuries for a few years hard to swallow… But I have decided to test my assumption that, as a single twentysomething committed to living in a major city, I will never be able to buy a house.”
Ms. Hunt uses a money-saving “expert” to record all of her spending  for a month. Realizing she needs a mortgage of around 350,000 British Pounds (which is over $612,000 Canadian dollars) the “expert” suggests she won’t be able to save up, and asks if she has a Significant Other.
Ms. Hunt records all of her  purchases and thoughts over the month and at the end, the money “expert” tells Ms. Hunt that “on the basis of my salary and my spending, Lewis believes home ownership is within my grasp – even outside a relationship. I am astonished. Scanning my spending diary, he says it would be “very possible” for me to save from £400 to as much as £700 of my disposable income each month by cutting back on coffees, lunches out, rounds at the pub and holidays. “Let’s be blunt: you do not need a money-saving expert to tell you that.”
Of course it would take four to eight years to reach a ten per cent deposit of  35,000 British pounds, and that is assuming ten per cent down and prices staying stable. “But I have to want it, the money expert continues. He has pages of evidence that I do not. “The most telling point in the whole thing, for me, was this line: ‘Brought lunch in, felt smug about it.’ If you were deliberately saving for a house, that would be habitual. It would not be smug.” Elle Hunt’s journal entries of spending and wit are available here.

 

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