How long will it take first-time buyers to save for a deposit?

Research highlights raising a deposit as one of the biggest challenges facing most first-time buyers

How long will it take first-time buyers to save for a deposit?

First-time buyers purchasing homes solo must save for more than six years, or 76 months, to afford a 10% deposit along with moving expenses, including conveyancing, surveying, and removal costs, research by reallymoving has revealed.

Despite these individuals paying on average 25% less for properties than the general market, the combined costs to secure a home at the UK’s average first-time buyer price of £234,000 amount to £25,554. This includes a £23,400 deposit and additional fees totalling £2,154.

Based on the assumption of saving 10% of one’s monthly salary, it would require 76 months to gather the necessary funds.

In 2023, over half of first-time buyers opted for properties with three bedrooms or more, reflecting the older average age of achieving homeownership, now at 33, and the need to accommodate growing families. The trend, reallymoving said, may also be influenced by a desire to minimise the number of moves by bypassing smaller starter homes.

Purchasing a property as a couple significantly reduces the saving period to 38 months, or just over three years, for those able to combine incomes with a partner, friend, or sibling.

Meanwhile, utilising a Lifetime ISA (LISA), available to 18- to 40-year-olds, can cut the saving time by 16 months, thanks to a 25% annual government bonus on savings up to £4,000 per year.

The disparity in housing prices and earnings across the UK means Londoners need to save for nearly 104 months, or eight years and eight months, to gather £45,012 required for a deposit. Those in the North East can achieve this in around 55 months, needing £14,962. On average, first-time buyers in the South spend an additional 31 months saving compared to their Northern counterparts.

Mortgage affordability has been a big focus over the last two years, but raising a deposit and covering the cost of moving is still the biggest challenge facing most first-time buyers who don’t have access to the Bank of Mum and Dad,” said Rob Houghton (pictured), founder and chief executive of reallymoving.

“With the cost of living, and rents, still so high, putting money aside every month is extremely difficult and even for those who are able to do that consistently, the average first-time buyer is still looking at a minimum 6.5 years wait to get on the ladder. 

“Clearly, tackling access to home ownership is not a top priority for the Conservative Government, with no support whatsoever for first-time buyers in the Spring Budget. We can only hope that as the parties publish their manifestos in the run up to the general election, we will finally see meaningful action to increase housing supply, including social housing, which would filter through to lower house price inflation for the rest of the market. With net migration into the UK of 670,000 in 2023, increasing supply is the only way to make home ownership more affordable in the long term.”

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