Young families who had given up hope of owning their own home are changing their spending habits to become part of the "Grey Belt Generation", MoneySuperMarket's annual Household Money Index (HMI) reveals. New research shows almost half of young families who currently rent are hoping to take advantage of government plans to build new homes on Grey Belt land.

The HMI reveals Brits will need to save £500 each month for a deposit - with one in five families saving more than £800 every month to get on the property ladder within five years.

New data shows over eight in ten families have taken steps to reduce their outgoings to save for a home - with 26% reducing the amount of food they buy, 25% selling possessions and 31% cutting back on spending for Christmas and birthdays.

Josh Dean MP, said: “Young people across the country aspire to own their own home; it’s a cornerstone of stability and opportunity. The MoneySuperMarket Household Money Index shows how many are making the financial steps, and often real sacrifices, to make that dream a reality.

“The Government has a vital role to play in helping turn those aspirations into achievable goals, and I’m proud to be part of a Labour Government that’s making this a priority. This will be done by reforming planning rules, building new towns, and getting on with the job of delivering the homes people need.”

Kara Gammell, MoneySuperMarket’s personal finance expert, said: “For young families aspiring to buy their first home, getting the best deals to make your money go further has never been more important and makes a big difference to your monthly savings."

MoneySuperMarket’s latest Household Money Index - which tracks what people are spending across 31 categories on a quarterly basis - found that the Grey Belt Generation spend an average of £812 every month on rent.

The latest Household Money Index shows increased spending across the board as ordinary households continue to feel the squeeze of a rising cost of living.

The average Brit now spends £55.26 a day just to get by - the equivalent of £1,657.67 a month.

The Grey Belt is Green Belt land earmarked for development - such as previously developed land, industrial sitres and car parks.