The time it’s taking for first-time buyers (FTBs) to save for their first home has grown by three years in some parts of the UK, according to research by Yes Homebuyers.
The home buying platform looked at the cost of the average FTB mortgage deposit at 15% of the current average FTB house price. It then looked at how long it was taking to save for this deposit based on tucking away 20% of a FTB’s net monthly income and how this timeline has changed since 2012.
The research revealed that with the current FTB house price sitting at £209,163 across Britain, a 15% FTB mortgage deposit requires a savings pot of £31,374.
With the average FTB taking home a net monthly income of £1,970, saving at a rate of 20% a month would see them put away just £394.
As a result, it’s currently taking the average FTB in Britain 6.6 years to save for a mortgage deposit. This is over a year (1.1) longer than it was taking them to save the same size mortgage deposit back in 2012.
In London, it currently takes the average FTB 11 years to save enough for a 15% deposit on the average London FTB property (£445,945). This timeline has increased by a huge three years since 2012 – the largest increase of all areas of Britain.
In the South East, the current time for an FTB to save for a mortgage deposit is 7.9 years, having increased by 1.7 years since 2012. The East of England has also seen one of the largest increases, with FTBs now required to save for 7.7 years, an increase of 1.6 years since 2012.
While the South West has seen the time required to save increase by 1.5 years since 2012, the current FTB is required to save for a total of eight years in the market, meaning the region is home to the second-longest period to accumulate a mortgage deposit outside of London.
However, in the North East, the average FTB would take just 4.3 years to save a 15% deposit on the current FTB property price of £119,411. This is a reduction on the 4.4 years that was required in 2012.
Scotland and Yorkshire and the Humber have seen some of the smallest increases, with FTBs now required to save for 0.4 years and 0.6 years longer respectively than they would have in 2012.
Matthew Cooper, founder & managing director of Yes Homebuyers, comments: “We seem to consider consistent house price growth as a cause for celebration in Britain. However, the reality is that these ever-increasing property prices are pushing the dream of home ownership further out of reach for many first-time buyers.”
He says instead of delivering on their promises of building new homes, the government has ‘consistently added fuel to this affordability fire by stoking demand via schemes like Help to Buy’.
“Until they actually increase the supply of stock reaching the market, this gap will continue to widen, and the average age of the nation’s first-time buyers will continue to climb as they are forced to save for far longer, simply to accumulate enough for a mortgage deposit,” Cooper concludes.