Can millennials save their way to a London property?

How quickly would common money-saving habits save you enough for a home?

Noi Rotstein

by , Insights & Marketing Executive

21 Jul 2017

For many young people in London, buying their own property seems like a distant, unlikely goal. While some cite steep house prices as the problem, others blame millennials’ frivolous spending. We decided to put these two theories to the test.

For every London borough, we crunched some numbers to get an estimate of how long different sacrifices would take to pay off in the form of a typical starter home. Would living on a budget be enough to save up for a house in London?

Select a borough on the map below to explore our findings.

As you can see, the only feasible way to save up for a house is to move in with your parents, which is not always an option.

For less central boroughs, ditching transport costs in favour of a bike could save enough for a house in the ballpark of ten years. However, people living there are unlikely to be able to avoid using public transport, particularly if they work in the city.

A couple saving together, however, would obviously achieve their goal twice as fast.

Other frugal habits, although they would save money, won’t make a significant contribution towards a deposit.

On the whole, millennials hoping to buy a house need a healthy salary and cheaper rent.

See the stats for your borough

We ranked the boroughs in terms of how easy they are to save up for compared to the average. The borough of Barking and Dagenham sits comfortably at the top – unsurprisingly, since it has the lowest median dwelling prices – while Kensington and Chelsea was found to be the priciest.

Click any of the column headers to re-order the table.

Affordability rankBoroughAverage flat priceEstimated monthly rentEstimated deposit for mortgage
1Barking and Dagenham£200,000£414£30,400
2Havering£233,000£412£35,416
3Bexley£230,000£401£34,960
4Sutton£266,750£444£40,546
5Croydon£268,850£433£40,865
6Hillingdon£276,375£430£42,009
7Enfield£290,000£483£44,080
8Redbridge£275,000£411£41,800
9Bromley£315,000£509£47,880
10Hounslow£323,000£545£49,096
11Harrow£327,000£462£49,704
12Newham£310,000£430£47,120
13Merton£359,950£554£54,712
14Lewisham£348,000£508£52,896
15Waltham Forest£340,000£452£51,680
16Kingston upon Thames£370,000£529£56,240
17Barnet£384,999£535£58,520
18Brent£375,000£525£57,000
19Greenwich£375,000£516£57,000
20Haringey£395,000£562£60,040
21Ealing£400,000£500£60,800
22Richmond upon Thames£450,000£691£68,400
23Tower Hamlets£460,000£656£69,920
24Lambeth£465,000£676£70,680
25Southwark£460,000£627£69,920
26Hackney£492,500£693£74,860
27Wandsworth£572,050£712£86,952
28Islington£570,000£809£86,640
29Hammersmith and Fulham£616,000£704£93,632
30Camden£665,000£895£101,080
31City of London£833,200£1,287£126,646
32Westminster£975,000£1,182£148,200
33Kensington and Chelsea£1,022,500£1,250£155,420
Data source: data.gov.uk, London Datastore

For the amount of money required, we used 15.2% of the median price for a flat/maisonette in each borough. 15.2% as this is the average deposit for a mortgage (as reported by the Council of Mortgage Lenders), and a flat/maisonette as this is a common choice for first-time buyers.

The amount saved by living with parents for each borough was estimated based on the average rent paid per person in that borough, calculated from data obtained on the London Datastore.

The cost of transport in this analysis was estimated as the price of a weekly travelcard for the borough’s average zone, to zone 1.

For packed lunches, we averaged several different figures reported online for how much the typical Londoner spends on lunch. We then calculated the price of a nice homemade ham and cheese sandwich, and compared the numbers.

The amount spent on each brunch was set to £25 – enough for some good food and a couple of bloody marys.

Savings from instant coffee were calculated by averaging the price per cup of various popular instant coffee brands, and the prices on well-known coffee shops’ menus.

All savings were calculated for an account with 1% interest compounded daily.

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