Mortgages  

Couples reallocate wedding savings to buy first home

Couples reallocate wedding savings to buy first home

About two thirds (62 per cent) of engaged UK couples have already, or would consider, reallocating their wedding budget towards a deposit for a house.

With three consecutive national lockdowns forcing engaged couples to postpone or cancel their weddings, many have simply decided to focus on their first house instead. 

A survey of 2,000 adults released by Halifax suggests this could be the start of a behavioural change, as 64 per cent of these couples also admitted owning their own home was now a bigger priority than their wedding.

The average wedding cost couples around £21,000 all-in today, according to wedding planning app Bridebook. With the average deposit now costing first-time buyers £59,000, it means reallocated wedding savings could contribute a hefty 35 per cent to a couple’s first home.

Carl Shave, director of Just Mortgage Brokers, told FTAdviser: “For many, the order of saving for the wedding and then subsequently a deposit for a home looks to be reversed as a consequence of the pandemic.” 

Shave added, however, that he “doubt[s] this will be the basis of any great shift in attitudes” once the UK resumes back to normality.

On May 17, the government announced weddings could take place with a limit of 30 indoor guests. This cap will now lift on June 21, but not without restrictions such as no dancing, and two metre social distancing measures.

According to comparison platform Hello-safe.co.uk the wedding industry has lost £5.3bn during lockdowns, due to cancelled or postponed weddings.

But cancelled or postponed weddings are not the only factor in couples' increased savings. Kevin Dunn, a senior adviser at Furnley House, said his clients are also accumulating savings from simply not going out.

“People who didn’t think they were able to buy have a lump of money they’re not using and see they can put down as little as 5 per cent on a property, and they feel this is maybe a better use of their hard-earned money.”

Self-employed Coventry-based mortgage broker Luke Spellman agreed that “borrowers have been able to save more than usual during lockdown”. But he too has found that these savings are not necessarily just down to cancelled weddings.

Bank of England data suggests households have continued to deposit significant amounts, adding an additional £16.2bn to their coffers in March alone.

Whilst the impetus is there to spend on a first house rather than a wedding, research revealed by Santander this month also found nearly half (44 per cent) of the UK’s first-time buyers delayed buying their first home last year due to the pandemic-induced rise in deposit requirements.

“Many first time buyers couldn’t access the mortgage market from mid-last year until this April, as lower deposit mortgage deals were pulled from the market,” Will Rhind, Habito’s mortgage advice head, told FTAdviser.

Younger buyers were the most harshly impacted by the government’s furlough scheme, unemployment and reduced income during Covid-19.