First-time buyers face a decade of saving to get on the ladder, as house price growth adds years to saving timeline
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Research by our team this week has revealed that 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 national property market, and now exceeds 11 years in some places.
How long does it take to save for a deposit?
We looked at the cost of the average FTB mortgage deposit at 15% of the current average FTB house price. We then looked at how long it was taking to save for this deposit based on a FTB tucking away 20% of their net monthly income, and how this timeline has changed since 2012.
- The research shows 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.
The toughest areas for FTBs
Of course, in Britain’s more expensive regions this timeline has grown by a far greater margin.
London & the South-East
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 3 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.
East of England & South-West
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 8 years in the current market, meaning the region is home to the second-longest period to accumulate a mortgage deposit outside of London.
Where is it getting easier for FTBs?
There's only one region where the FTB mortgage deposit saving timeline has reduced.
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 marginal 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.
Analysis: Home ownership getting "further out of reach" for FTBs
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 homeownership further out of reach for many first-time buyers.
To think that the timeline of saving for a mortgage deposit has increased by as much as three years since 2012 alone is quite shocking, and this really highlights the huge task facing those who wish to get their first foot on the ladder. Especially when you consider that older demographics are able to comfortably sell their home at a discount using our "sell my house fast" service, because of the amount of house price appreciation they've enjoyed over the years.
Supply, Demand, and Government promises
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.
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