The average time it takes to save for a home deposit in England has climbed to almost 10 years underlining the growing unaffordability for first-time buyers, according to new research.
The campaign group Generation Rent said in 2012 it would typically take 6.8 years to save for a deposit for a mortgage. However, soaring private rents and higher house prices have added almost three years to that figure, pushing it up to 9.6 years.
Years of property price growth and rents hitting record highs are just two of the reasons why many would-be buyers are finding saving up a sufficient deposit to be a bigger challenge than ever, with the new research suggesting some people will not be in a position to buy until they are well into their 40s.
Data issued by the Halifax earlier this year found that the average deposit for those buying their first home in 2022 was just over £62,000 – up 8% on the average in 2021.
Generation Rent looked at government data on rents, house prices and salaries to estimate how long it would take the typical single renter to save for a deposit.
The headline findings disguised wide regional variations. In north-east England, it would take the same amount of time as it did a decade ago – about 4.6 years on average – to save for a deposit.
London was the worst-affected region, with the average time before someone was able to step on to the property ladder put at 18.3 years. However, that was only if the individual lived in a flatshare the whole time. If they were to rent on their own, they would need to save for 27 years, the researchers claimed.
There are a few mortgage options available that can let some people buy a home without having to put down a deposit, though these often involve meeting a number of conditions. In May this year, Skipton building society launched a 100% mortgage aimed at would-be first-time buyers who cannot save for a deposit – the first deal of its kind since the 2008 financial crisis.
Ben Twomey, a director at Generation Rent, said: “In much of the country the typical worker faces at least a decade living and saving in the private rented sector before they have a mortgage deposit. That gets close to two decades for Londoners, and even then, that’s only possible by sharing with other people into their 40s.”
