First time buyers are struggling to save for a house despite lockdown savings, according to new market research from London-based fintech, Tembo. The research found that the mean amount first-time buyers said that they saved during the pandemic was £6,183.77, which equates to roughly a quarter of post-tax annual earnings on the average UK full-time income of £31,3611 despite the pandemic having continued for almost two years. More than one in 10 (14%) of first time buyers said they haven’t been able to save at all, and this was as high as 24% of those earning less than £15,000 per year.
When it comes to impacts on their ability to save for a house, 50% of first time buyers said rent is their top outgoing cost, followed closely by utility bills (35%) and groceries (26%), suggesting that first time buyers are struggling to get ahead on saving while they pay for rented housing instead.
While the pandemic savings are not insignificant, they reflect a long period of time required for first time buyers to achieve their required house deposit. Tembo’s research also found that first time buyers expect to pay £270,620.59 for their first home, almost nine times the average UK salary.
How first time buyers saved during the pandemic
| Saving amount | First time buyers under 45-years-old |
| Nothing | 14.13% |
| £1-500 | 17.17% |
| £501-5,000 | 25.32% |
| £5,001-10,000 | 16.09% |
| £10,001-15,000 | 10.21% |
| £15,001-20,000 | 5.10% |
| More than £20,000 | 6.58% |
The research comes as Tembo launches its new whitepaper: The First-Time Buyer Report: A Generation in Crisis which explores how the cost of homeownership and generational wealth gaps are influencing the lives of first time buyers. The whitepaper is built on insights from two surveys – one of 1,019 first time buyers under 45-years-old, and one of 1,019 homeowners over 45-years-old. All survey respondents were based in the UK.
Younger first time buyers in particular face further savings challenges, with changes to student loan repayments set to create further difficulties in saving. One in five (20%) of those aged 18 to 24-years-old said that their student loan is impacting their ability to save money. The age group did however save more than their older counterparts, saving a mean amount of £6,503.78 compared to £6,257.32 for 25 to 34-year-olds and £5,843.86 for 35 to 44-year-olds. However, the youngest first time buyers were the least likely among the age groups to cite rent as an impact on saving (38%), suggesting many 18 to 24-year-olds live with their parents still, or have family paying rent for them.
Leave a Comment