First-time buyers could take over 10 years to raise 15% deposit – research
The average length of time to save for a 15% deposit has fallen from 11 years in 2017 to 10 and-a-half years, Hamptons International has said.
A single first-time buyer faces saving for just over a decade to raise a 15% deposit, rising to 17 years for someone trying to get on the property ladder in London, a report has found.
Across England and Wales, the average single first-time buyer faces saving for 10 and-a-half years to raise a 15% deposit on their first home, according to Hamptons International.
This means someone starting saving now could expect to buy their first home in 2028 – or 2035 in London.
The research used Office for National Statistics (ONS) earnings figures for people aged in their 20s, reflecting the age of people saving for their first home, and took into account potential pay rises as households move up the career ladder.
It assumed that households could save 22% of their remaining income towards a deposit, after regular bills were taken into account.
It also assumed wages and house prices would increase in line with Office for Budget Responsibility (OBR) forecasts and that first-time buyers would buy a home priced at around 85% of the average house price in their region.
The time it takes to save for a deposit has fallen slightly. A year ago, it would have taken 11 years to save, according to the calculations.
The slightly faster time scale compared with the situation a year ago reflects slower house price growth and a rise in incomes, the report said.
Meanwhile, a couple saving together to get on the property ladder would take around five years to raise a 15% deposit – meaning they could set up home in 2023.
The fastest place to save for a 15% deposit in the study is in the North East, where it takes a couple just under three years and a single person six years and three months.
The report also looked at how long it takes for people to save a 5% deposit – the level of deposit people often put down when using Help to Buy schemes.
It found that for a single first-time buyer it would take three years and nine months to save up for a 5% deposit – over six years faster than saving up for a 15% deposit.
A couple saving for a 5% deposit on their first home could typically expect to do so in one year and nine months.
Aneisha Beveridge, an analyst at Hamptons International, said: “Saving a deposit is still the biggest barrier to buying a first home.
“It takes a single person more than a decade to save up in the current climate. But the additional support from Help to Buy brings down the time it takes to raise a deposit by over six years for a single first-time buyer.”
She continued: “It still takes a couple in London eight years to save up, twice as long as someone buying a home in the North.”
Here is the average length of time it could take for a couple, followed by a single person, to save for a 15% deposit, according to Hamptons International:
– East, five years six months, 12 years three months
– East Midlands, four years, nine years three months
– London, eight years, 17 years
– North East, two years nine months, six years three months
– North West, three years six months, eight years three months
– South East, six years three months, 14 years
– South West, three years six months, 13 years
– Wales, four years three months, seven years nine months
– West Midlands, three years six months, nine years six months
– Yorkshire and the Humber, three years six months, eight years
Here is the average length of time it could take for a couple, followed by a single person, to save for a 5% deposit, according to Hamptons International:
– East, two years, four years three months
– East Midlands, one year six months, three years three months
– London, three years, five years nine months
– North East, one year, two years three months
– North West, one year three months, two years nine months
– South East, two years three months, four years nine months
– South West, one year three months, four years six months
– Wales, one year six months, two years nine months
– West Midlands, one year three months, three years three months
– Yorkshire and the Humber, one year three months, two years nine months