According to Santander, this is called ‘home hustling’ and is fast becoming a financial solution for aspiring first-time buyers looking for ways to increase their deposit.
With an average monthly income of £442.62 for seven hours of work per week, it’s no surprise that a whopping 49% of potential buyers struggle with affordability on a secondary income.
What challenges do starters face?
According to Santander, seven in 10 would-be buyers describe the quest to become a homeowner as ‘difficult’, believing previous generations had it easier.
Their biggest challenges are the higher cost of housing, higher costs of living and huge deposit requirements. And more than a quarter of those surveyed could not rely on financial support from the Bank of Mum and Dad to support their purchase.
But with 72% admitting that owning a home remained a priority, many had turned to generating a second income to boost their deposits.
How much do starters earn with a side job?
While the average ‘hustler’ earns £442.62 a month for seven hours of work, some earn much more.
According to the research, one in ten report an income of more than £1,000 a month and almost two-thirds save most of their ‘hustle’ money in their piggy banks.
What side hustle do starters do?
According to Santander’s research, the most common hassle is responding to surveys, with 39% of respondents revealing they have made extra money this way.
As many as 20% garden and 17% do dog walking to earn extra money. Selling personalized items such as cards and wrapping paper was another popular activity, with 19% of those earning extra income by offering this service. Meanwhile, 18% sold their home baked goods.
What other methods do first-time buyers use to increase their deposit?
Many not only earn extra income, but also put any bonuses or pay increases into their savings account.
Others are taking up savings challenges, such as the ‘penny a day’ or ‘envelope’ schemes, to motivate them to put more money aside.
As many as a quarter of those surveyed had sold childhood collectibles such as Beanie Babies or Pokémon cards to increase their deposit. And others tried to reduce their spending by exchanging skills with friends – for example, doing odd jobs in exchange for the work of a seamstress.
Why some starters can be hindered by misconceptions
Santander also found that many would-be buyers were held back by common beliefs that were not necessarily true.
One in five thought they needed at least £50,000 to buy a home, and a similar amount thought they could only access a maximum loan of 95% Loan-to-Value (LTV).
While many first-time buyers are advised to make a down payment of at least 5%, there are options for those with a smaller down payment or no down payment. And with the right advice from a real estate agent, they can figure out which of these solutions might be right for them.
How to access low deposit mortgage options
Santander is a lender that offers a lower deposit option. The ‘My First Mortgage’ product offers an LTV of up to 98% with a £10,000 deposit. Data from the lender shows that the average would-be buyer today has around £9,000 in their savings account, highlighting how achievable a deposit can be with a little extra push.
David Morris, mortgage director at Santander UK said: “The housing rush is a one-way street, with potential buyers increasing their income stream, reducing the time it takes to save for a deposit, stamp duty and legal fees, while taking back control of their own home.
“But it’s clear that common misconceptions still persist. This is where mortgage brokers provide invaluable support to first-time buyers, helping them see behind the interest rates and headlines and understand what options are available to them.”