The inflation in house prices means would-be FTBs in London saving for a deposit will not have enough before the start of the 2012 Olympics.
As the cost of housing continues to soar, figures released by the Co-operative Bank show that first time buyers must save for longer in order to find the amount needed for their deposit.
If would-be homeowners saved £307.50, half the current average mortgage repayment for first time buyers, it will take approximately six years and two months to save the 10 per cent deposit of £25,183 required in London by 2012. This assumes that house prices only increase by the current inflation rate of 3.6 per cent per year.
While the picture is not quite so bleak in other parts of the country, it is clear young people must get into the savings habit quickly, not something they have historically been associated with.
David Newman, director of marketing at Co-operative Bank, said: “This data reveals the problems new home buyers face in what is clearly for many a marathon rather than a sprint when running up a decent deposit.
“At a time when many British athletes will be showing greater training discipline to strike gold in 2012, the same level of commitment to saving must be shown by those looking to get their foot on the housing ladder.”
While Londoners will not have saved their deposit until 2012, South East hopeful homeowners will reach the necessary £18,991 in February 2011, while people seeking their first residence in the South West should book a removal van for January 2010.
Buyers in the North East have the least amount to save, needing £9,675, which they will reach in November 2008, just after the Olympics in Beijing that year. While buyers in Scotland and Northern Ireland will be getting their keys during the spring of 2009.
Buyers in other regions will be moving into their properties throughout 2009.
However, it is not all bad news according to Newman. He said: “There are many alternatives available to help first time buyers onto the property ladder, from no deposit or low deposit mortgages, to parental guarantor schemes and packages for graduates. Anyone interested in buying a home for the first time should take some advice sooner rather than later.”
