First-time buyers take 15 years to save a deposit

First-time buyers take 15 years to save a deposit

0:05 AM, 14th February 2024, About 3 months ago

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It takes 15 years to save for a 20% house deposit in the UK, amid a turbulent housing market and a cost-of-living crisis, a study reveals.

The research from Norton Finance analysed average house prices and salaries and found that a person earning £34,963 a year would need to save 12% of their income (£292 a month) for 15 years to afford a two-bedroom flat worth £263,000.

The independent finance broker also found that if two people were to apply for a joint mortgage and save the same amount each, they could halve their saving time to seven and a half years and buy a home by summer 2031.

‘Decision to pursue homeownership is a significant financial undertaking’

Paul Stringer, a director of Norton Finance, said: “The decision to pursue homeownership is a significant financial undertaking, and our research aims to provide aspiring homeowners with the knowledge to make informed choices that align with their financial goals.

“While owning property can be an ultimate dream for many, it is essential to start considering these options as early as possible and to have knowledge of the different options available that can support with saving a deposit.”

First-time property owners entering the mortgage market

The study also revealed that the number of new first-time property owners entering the mortgage market dropped to the lowest level since 2013 last year, due to the higher interest rates on mortgages and the difficulty of meeting affordability requirements.

However, there is still a strong demand among potential buyers to get on the property ladder, and the government’s Lifetime ISA scheme can help them boost their savings by 25%, up to £1,000 a year, if they are aged between 18 and 40.


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