Following the Bank of England's decision to cut the base rate to 0.25%, a fifth of 18 to 34 year-olds could now find it more difficult to reach their deposit savings goal, according to MoneySuperMarket.
The comparison website surveyed 2,000 people and found that 18-34 year-olds who are currently saving for a deposit believe they need to save in the region of £25,000.
When the firm carried out the same survey last year, prospective first-time buyers estimated they'd need just over £21,000.
Of those taking part this year, the majority said they'd currently saved less than half of their desired total (an average of £9,632), meaning it could take an individual up to seven years to reach their savings goal.
Prospective buyers saving alone said they think it will take another eight years for them to reach the full amount they need for a deposit, and those saving with a partner indicated they think it will take a further three and half years.
“The Bank of England dealt a blow to savers when cutting interest rates to 0.25 per cent this month and, as a result, first time buyers now face the prospect of having to save for longer due to dwindling savings rates,” says Kevin Mountford, banking expert at MoneySuperMarket.
“This is coupled with the general rise in house prices seen during the first six months of the year, even though prices dropped slightly in July.”
“Savers shouldn’t settle for a miserly rate if there’s a better one to be found elsewhere, whether that’s via ISAs, bonds, peer-to-peer lending, or current accounts,” he says.
“The Help to Buy ISA is designed specifically to help those trying to get on the housing ladder and, when it comes into force next year, the Lifetime ISA can be put towards a property purchase. First time buyers should make the most of these initiatives.”