While the pandemic has spurred an unprecedented property market boom across the UK, research by GetAgent.co.uk has shown that the Covid may have pushed the average age of a first-time buyer up by almost two years – and that’s just those to have retained employment thanks to the government’s furlough scheme.
The furlough scheme was the government lifeline afforded to many in order to allow them to retain their jobs during the most difficult stages of the pandemic. Running from 1st March 2020 to 30th September 2021, the grant saw the government pay 80% of wages up to a £2,500 monthly threshold.
With the average gross UK salary sitting at £31,646 at the time, this meant retaining an income of £31,868 over the 19 months the scheme was in place, a loss of £7,967 for the average person when compared to their regular income.
So what did this mean for the average first-time buyer looking to save for that all important first foot on the property ladder?
With the average first-time buyer house price coming in at £199,246 in 2020 the average first-time buyer was looking at a 15% deposit of £29,887 in order to secure their first home.
A milestone that was taking them 6.6 years to accomplish based on saving 20% of net income per month (£377) and purchasing their first home at the age of 32.
However, with furlough setting them back by £7,967 it would require a further 1.8 years of saving this average of £377 per month to bridge the mortgage deposit gap caused by Covid.
As a result, those first-time buyers who were attempting to climb the ladder during the pandemic will have seen their average age when purchasing pushed back to almost 34.
Founder and CEO of GetAgent.co.uk, Colby Short, commented: “Buying that first home has always been one of life’s milestones and in recent times it has become particularly hard to reach as a result of ever increasing house prices, with first-time buyers saving for far longer simply to amass enough to secure a mortgage deposit.
The pandemic will have only added to this difficulty and those who were furloughed, or worse made redundant, will have seen their journey to homeownership become all the longer as a result of a reduction in earnings and their ability to save.”