Flat sharers can save for a mortgage deposit in under three years

Saving a deposit is often the biggest potential challenge for first-time buyers. Sharing a flat could speed up the saving process, reducing the time needed to under three years in some parts of the country.

If you're renting a flat on your own and struggling to save for a mortgage deposit, moving into a flat share could make a big difference.%VIRTUAL-SkimlinksPromo%
Outside London, the average cost of renting a one-bedroom flat (including bills) is £8,394 per year, according to houseshare website SpareRoom.co.uk. But if you just rent a room in a flat share, the average cost is £4,680 a year including bills. That's a saving of £3,976 a year.

The average one-bed flat outside London is worth £101,000. So if you moved into a flat share and saved £3,976 a year, you could save up for a 15% deposit in three years, ten months.

It's a similar story in London. If you moved out of a typical rented one-bed flat and went into a flat share instead, you could save £11,227 a year. An average one-bed flat in the capital is worth £282,200, so you could potentially save up a 15% deposit in three years, nine months.

If you decided to buy a new-build property under the government's Help To Buy scheme, you'll only need a 5% deposit, which means you could save for a deposit in little more than a year.

This table shows you the places in the UK where you could save up for a deposit most quickly:

Rank

Location

Annual cost renting one-bed flat (inc. bills)

Annual cost room in flatshare (inc. bills)

Annual saving

Average cost of one-bed flat in postcode area

Length of time to save for 15% deposit

1

Londonderry, N. Ireland

£7,773

£3,900

£3,873

£48,727

1 year, 11 months

2

Dewsbury, W. Yorks

£6,755

£3,042

£3,713

£61,344

2 years, 6 months

3

Bootle, Merseyside

£6,885

£3,900

£2,985

£56,606

2 years, 9 months

4

Waltham Cross, Herts

£13,139

£5,749

£7,389

£52,942

2 years, 11 months

5

Motherwell, Scotland

£6,742

£4,004

£2,738

£52,942

2 years, 11 months

6

Doncaster, S. Yorks

£6,935

£4,167

£2,767

£53,046

2 years, 11 months

7

Widnes, Cheshire

£7,197

£3,588

£3,609

£73,327

3 years

8

Dunstable, Beds

£9,400

£4,550

£4,850

£97,533

3 years

9

Dundee, Scotland

£6,767

£4,032

£2,735

£56,981

3 years, 1 month

10

Milton Keynes, Bucks

£9,480

£4,935

£4,545

£93,335

3 years, 1 month

London

£19,140

£7,914

£11,227

£282,200

3 years, 9 months

UK (exc London)

£8,394

£4,680

£3,976

£101,253

3 years, 9 months


So flatsharers could save a 15% deposit in less than three years in places as diverse as Waltham Cross in Hertfordshire and Motherwell in Scotland.

No panacea
Don't get me wrong, I'm not suggesting that moving into a flat share is a simple panacea that will suddenly make it easy for twentysomethings to buy their first home. Many younger folk couldn't afford to rent their own individual flat in the first place!

And many twentysomethings also face competing financial demands such as paying off student loans as well as more expensive personal loan and credit card debts. What's more, nearly all younger folk feel the pressure to socialise.

But these statistics on flat sharing do make a useful point. If you're renting a property solo and wondering if you'll ever be able to buy, going into a flat share could make a real difference. After all, half of all solo tenants in the survey told Spareroom they couldn't afford to save for their long-term future. But if they moved into a flat share, that wouldn't be true.

Of course, if you really wanted to save money, you could see if any member of your family was willing to put you up for free or for a modest rent. Living with your folks is normally the cheapest option, although it doesn't come without its drawbacks...

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The people who affect house prices
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Flat sharers can save for a mortgage deposit in under three years

They have the power to push a price higher, depending on how many other people are in the running for a home and how liberal they want to be with the truth to the buyers. In some cases, they can also do more harm than good by initially overvaluing a property. The worst case scenario is the home eventually sells for less than it would have done had it been priced realistically in the first place.

Sometimes a quick-moving solicitor can be the difference between getting the home at the price you want and getting into a bidding war or missing out entirely. If the buyer needs a quick sale, they're more likely to do a deal with someone who has a flexible solicitor who can push through the sale so it suits them.

Research by Halifax concluded that anti-social neighbours could take £31,000 off the price of an average home. If you’re selling, you should declare any problems you’ve had on a Seller’s Property Information Form, otherwise you could face a claim later on.

While an increase in Council Tax might not be too much of a deterrent to a potential buyer, plans to grant permission for new homes, a mobile phone mast or wind turbines could knock an asking price down. If you're a buyer, the local council should have details of any future planning applications and you can search them for a small fee.

A lot of traffic in an area obviously has an effect on air quality. Since 1997 each local authority in the UK has carried out studies of the air quality in its area. If an area falls below a national benchmark for air quality, it has to be declared an Air Quality Management Area (AQMA). Some residents of the Llandaff area of Cardiff expressed concern that it had become an AQMA due to an increase in traffic in the area. Whether this becomes a widespread issue remains to be seen.

Mortgage availability is a key driver of property prices. If no-one can take out a mortgage, then prices will stall and eventually fall. We've seen this happen in parts of the UK in recent years, as lenders tightened up their criteria following the credit crunch. Conversely, good mortgage availability will mean more people are competing for properties - to a seller's advantage if their home is desirable.

An outstanding local school can add around 8% to the value of a home, according to the Royal Institution of Chartered Surveyors. On the flipside, a not so good Ofsted report can take off a similar amount. If you’re concerned about a school’s performance, one way to get involved is to become a governor.

Initiatives such as the Help To Buy scheme have been credited with pushing house prices up. A buoyant economy with strong employment gives people the confidence to buy and leads to an upward shift in house prices, while rises in unemployment have the reverse effect. Planning restrictions, at both a national and local government level, affect the number of homes in a particular area.

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