First-time buyers need 10 and a half years to save for a deposit

Study finds

In Q1 2018 the average single first-time buyer would have to save for 10 and a half years to raise a 15 per cent deposit on their first home.  This is slightly down on the 11 years recorded in Q1 2017 and reflects slower house price growth and a rise in incomes (table 1). 

The average single first-time buyer who started saving in Q1 2018 would not be able to purchase a home until the autumn of 2028.

Sharing rent and every day household costs such as food and bills means that a couple can save faster – under half the time of a single first-time buyer.  In Q1 2018 the average couple buying for the first time would need to save for five years – unchanged from 2016 (table 1). 

This means that the average first-time buyer couple who started saving in Q1 2018 could set up home by the spring of 2023.

A single Londoner hoping to buy for the first time would need to save for 17 years to raise a 15 per cent deposit whereas a couple would need eight years (table 1).  It is now six months quicker for a couple to save up for a home in London than at the same period last year.  A slowdown in London house price growth and higher income growth explains the change. 

In Q1 2018 a single first-time buyer in London would not be able to move into their new home until 2035.

The fastest place to save for a 15 per cent deposit is in the North East, where it takes a couple just under three years (two years nine months), and a single person six years and three months. 

Saving for a 5 per cent rather than a 15 per cent deposit means first-time buyers can save faster.  Five per cent is the minimum deposit needed to qualify for Help to Buy.

For a single first-time buyer it would take three years and nine months to save up for a 5 per cent deposit (table 2).  This is over six and a half years faster than saving up for a 15 per cent deposit.                        

In Q1 2018 it would take a couple saving for a 5 per cent deposit on their first home one year and nine months, this compares to five years when saving for a 15 per cent deposit.

But in London the time to save for a 5 per cent deposit rises to three years for a couple and five years and nine months for a single first-time buyer (table 2).

Aneisha Beveridge, Analyst, Hamptons International said:

“Saving a deposit is still the biggest barrier to buying a first home.  It takes a single person more than a decade to save up in the current climate.  But the additional support from Help to Buy brings down the time it takes to raise a deposit by over six years for a single first-time buyer. 

 

“Slower house price growth in the capital has meant that it’s now six months quicker for a couple, who share household spending, to save up for a 15 per cent deposit in London.  But it still takes a couple in London eight years to save up, twice as long as someone buying a home in the North.”