Research reveals first-time buyers taking more risk with savings

Nearly half of would-be first-time buyers are willing to take more risk with their savings in order to afford a home sooner as the cost-of-living squeeze starts to hit, new research from UK-based money app Ziglu has shown.

Ziglu’s study among people planning to buy in the next five years shows 48% would be happy taking more risk with some or all of their savings. Nearly one in 10 (9%) say they would be happy taking more risk with all of their savings.

Part of the reason for being happy to take more risk is they are unhappy with the current options for saving for a home – around 56% questioned said there are not enough saving and investment options for first-time buyers.

Most are relying on cash savings accounts despite current low rates – 80% are saving in cash accounts while 32% are using cash ISAs and 15% Lifetime ISAs. Around 9% are investing in shares and a similar number (8%) are investing in cryptocurrencies.

The research for Ziglu, which offers current account services, FX, investments and also enables customers to buy and sell a range of cryptocurrencies, found first-time buyers are increasingly worried about rising inflation and the cost-of-living squeeze with planned National Insurance increases.

Around 85% of those questioned worry their savings plan could be knocked off course while nearly two out of three (63%) want the Government to provide more help for saving for a property.

The number of first-time buyers rose to nearly 410,000 last year with average deposits estimated at around £53,9352 but affordability is still being squeezed with house prices estimated to be around 6.9 times earnings for would-be homeowners.

Mark Hipperson, founder and CEO of Ziglu, said: “Saving for a deposit is a major challenge for first-time buyers and that is demonstrated by the fact the average age for a first-time buyer is around 32.

“It makes sense that people are willing to take some risk with their savings and investments in order to raise the money faster and particularly so when rising inflation means people are getting a negative rate of return on cash savings.

“Cryptocurrency and investing in the stock market are increasingly playing a role in helping people save for deposits although clearly the volatility in these markets means they cannot be the only ways people save.

“However, the 5% interest rate on Ziglu’s Boost accounts, for example, have been hugely popular with our customers who are saving to get on the property ladder.”