First time buyers blow the budget by £6,500

Article date: 29 July 2015

  • Homeowners spend £1,680 more than expected on essential repairs to a first home

The average first-time buyer under-budgets by £6,481 when buying a first house, according to new research from home insurer, Aviva.*

Almost three quarters of the 2,000 home-owners surveyed under-estimated the costs needed to buy a first home, with most of those saying they had only planned for the deposit.

As a result, more than half were forced to wait an extra two years and eight months before finally having the cash to get on the property ladder.

Almost half confessed to coming close to giving up plans to buy their first home altogether.

First-time buyers typically take nearly four years saving for a first home – banking an average £12,143 during that time. In reality though, the average total amount actually needed is closer to £18,624.

With three quarters admitting to not doing enough research into the total cost of buying a home, Aviva launched its online First Home website which includes a step-by-step guide to buying a first home and a mortgage jargon buster.

“Scraping together the cash for the deposit alone can be a mammoth task, but that’s just the first hurdle”, said Heather Smith, marketing director at Aviva. “It’s the other essential costs such as solicitors’ fees and Stamp Duty which can be the sting in the tail – not forgetting any essential repairs which might be needed once the keys have been handed over.”

Homeowners spend an average £3,727 on essential repairs to their newly purchased home - typically forking out around £1,680 more than expected. One in five looking to buy their first home now would consider buying a house which needed significant DIY or repairs, just to get on the property ladder**.

“First-time buyers face walking into a money pit if a first dream home turns out to be a nightmare. If the cash outlay needed to buy the house isn’t expensive enough, a hefty bill for unforeseen essential repairs is the last thing needed”, continued Heather Smith.  

“Anyone looking to buy a home should investigate every nook and cranny of the property before putting in an offer and must not be afraid of asking for several viewings”.

Home buyers could avoid unforeseen expensive repairs by using Aviva’s online House viewing checklist; an interactive tool which lists potential maintenance trouble to look out for.

House Buying: Budget versus Actual Spend

 

BUDGET

ACTUAL SPEND

Deposit

£6361

£8672

Stamp duty

£1486

£2389

Fix/improvements

£2047

£3727

Solicitor’s fees

£489

£756

Survey

£287

£496

Mortgage fee

£339

£548

Mortgage valuation

£259

£476

Plot reservation

£215

£393

Furniture

£581

£1007

Contents insurance

£38

£78

Buildings insurance

£41

£82

TOTAL

£12,143

18,624

-Ends-

If you are a journalist and would like further information, please contact:

Katy Hurren | Aviva Press Office | 07800 692548 | katy.hurren@aviva.co.uk | @Katy_Hurren

Notes to editors

* Aviva commissioned polling with OnePoll of 2,000 UK 18+ Adults who bought their first home in the last ten years and still live there, surveyed online between 23 June to 07 July 2015 – unless stated otherwise.
** Aviva commissioned polling with OnePoll of 100 UK 18+ Adults in the process of buying their first home, surveyed online between 23 June to 07 July 2015.

About Aviva

  • Aviva provides life insurance, general insurance, health insurance and asset management to 34* million customers, across 16 markets worldwide
  • In the UK we are the leading insurer serving one in every four households and have strong businesses in selected markets in Europe, Asia and Canada. Our shares are listed on the London Stock Exchange and we are a member of the FTSE100 index.  
  • Aviva’s asset management business, Aviva Investors, provides asset management services to both Aviva and external clients, and currently manages over £245 billion in assets.
  • Aviva helps people save for the future and manage the risks of everyday life; we paid out £24.6 billion in benefits and claims in 2014.
  • By serving our customers well, we are building a business which is strong and sustainable, which our people are proud to work for, and which makes a positive contribution to society.
  • The Aviva media centre at http://www.aviva.com/media/ includes company information, images, and a news release archive.
  • For an introduction to what we do and how we do it, please click here http://www.aviva.com/about-us/aviva/.
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* Before the deduction of overlapping customers.

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