Despite wanting to buy their first home, 19 per cent of FTBs willl blow an average of £5,000 on luxuries such as cars and holidays.
The First-Time Buyer Finance Report, which surveyed FTBs planning to buy within the next two years, showed that 20 per cent of first timers view their 'financial fling' as one last treat before they make the final commitment to their mortgage. A further 21 per cent say they are making extravagant purchases now because all their spare cash will be spent on their home once they move in.
And it seems that this indulgence doesn't come cheap - 57 per cent of wannabe FTBs who expect to have a last financial splurge will fork out an average of £6,259 for a car and 15 per cent will spend an average of £1,818 on a holiday abroad. Men are the bigger spenders, frittering away £5,732 on average - £1,600 more than women. Two per cent of 'financial flingers' even plan to squander over £20,000 - more than enough to pay the deposit on an average FTB property, yet they would rather spend the money on luxuries instead.
Richard Taylor, head of mortgages at Alliance & Leicester, said: "Our research shows that first-time buyers plan to indulge before getting onto the housing ladder. Understandable as this may be, splashing out on a treat to the tune of £5,000 needs to be considered and budgeted for carefully.
"Buying your first home can be a costly process and first-time buyers need to be practical about what they can and cannot afford."
It seems that first-time buyers realise it will be their last extravagance for a long time. Almost three quarters (70 per cent) of first-time buyers think they will still have to make financial sacrifices once they have moved into their home, and they plan to curb their spending for an average of two years and seven months after they get the keys.
The sacrifices first-time buyers have to make even extend to their family life, with 11 per cent admitting getting on the property ladder means they will have to delay having children.
Women admit they will have to give up their WAG (wives and girlfriends of the England football team) lifestyles, such as shopping, eating out and getting their nails done for the sake of getting on the property ladder. Nearly half (45 per cent) plan to cut down or give up shopping for luxuries while 10 per cent will forego splashing out on beauty treatments.
Men, in contrast, are more likely than women to give up going to the pub (16 per cent), going out to meet friends (24 per cent) and give up going to the cinema or concerts (20 per cent).
Although first-time buyers realise they have to make forfeits, they aren't too pleased about it, with 12 per cent saying they will begrudge every sacrifice they have to make; and five per cent said the pressure of curtailing unnecessary spending will be too much and they won't be able to last the course. However, when asked how long they will realistically be able to cut back on their spending, all finally admitted it would be for an average of two years and two months - almost half a year less than originally planned.
Taylor commented: "First-time buyers seem to have a bleak picture about moving into their first property, thinking they will have to sacrifice their social lives in order to get on the housing ladder. However, buying a house doesn't have to mean living off baked beans for the next two years. Careful budget planning means first-time buyers can have a night out at the pub as well as buy that new lamp or sofa.
"More and more mortgage lenders are using affordability measures to assess how much each consumer can realistically put towards their mortgage each month. This should make it easier for first-time buyers to plan their finances and not worry about being able to afford the mortgage payments."
