New research has shown it will take aspiring first-time buyers significantly longer to get on the property ladder than they expect. The study conducted by Yorkshire Building Society has found that 34% of UK adults aged 18-34 see owning their own home as the most important life event they will save for.
According to the research, 61% of respondents expect to own their own home within four years of starting to save for a deposit. The average UK house price stands at £246,244 and potential buyers would need to save a 5% deposit of at least £12,312 on average to make their home-owning dreams a reality.
Saving habits of young people
The study found that the average amount currently saved by those aged 18-34 is £114 per month, which the Society estimates would take an aspiring homeowner nine years – more than double their expectation - to amass a savings pot big enough to cover the average 5% deposit needed to get on the housing ladder.
This timeline grows to 18 years if would-be homeowners are intending for a 10% deposit, highlighting the disparity between expectation and reality for many potential buyers.
The data also explores the regrets that Brits have over their spending habits, which the Society says could be the difference between getting onto the property ladder sooner rather than later. According to the study, 63% of respondents say they regret spending on impulse purchases and wish they had saved the money instead, with an average of £164 spent on a whim each month.
How can young people save to get on the property ladder quicker?
If that extra £164 saved a month was combined with the average monthly savings by those aged 18-34 of £114, they could save for a 5% deposit within their expected four-year timescale.
Ben Merritt, senior mortgage manager at Yorkshire Building Society, commented: “As our research shows, buying a first home quite clearly remains a life ambition for many people but achieving that remains a struggle, particularly for first-time buyers. The reality of having to save for nearly a decade is a stark reminder that the upfront costs of purchasing a house still prove too big a barrier to overcome for some”.
Merritt continued: “As a mutual organisation, we are owned by our members and not shareholders. For us, our aim is helping real life happen for our members, it’s about helping them to achieve their personal goals and key life moments such as buying their first homes.”
Merritt advised: “After almost a full year of staying at home with less opportunities to spend and more cosy nights in, we are reminding people to consider the financial cost of impulse spending. We’re not trying to deny life’s pleasures, we just want to help people save money that would enable them to be able to reach their home-owning aspirations sooner.”