Single first-time buyer has to save 13 years for deposit, report finds

Updated

A single first-time buyer faces a 13-year wait to build a big enough deposit for a home, while someone in London could need to save for 46 years, according to an index.

The "time to save" report found that buying with someone else as a couple typically shaves around 10 years off the time it takes to get on the housing ladder - taking three and a half years typically across England and Wales instead of 13 and a half years.

The report by estate agents Hamptons International found that Londoners can shave decades off the length of time it takes to buy a home by buying together.

Couples in London face an eight-year wait to save enough for a deposit, compared with single people who face a wait of around 45 years and nine months, it found.

The findings were released as a separate report from Rightmove found the average asking price on a home coming to market has passed the £300,000 milestone for the first time across England and Wales.

Hamptons International found that home owners in the North East of England, where average property prices are cheaper, tend to have the shortest wait to build a deposit, at two years for couples and eight years nine months for single people.

The report assumed that someone would need to raise a 15% deposit to buy a home. It also assumed that aspiring buyers were working full-time and saving 22% of their income towards a deposit after paying essential bills and that wages and house prices will increase in line with forecasts from the Office for Budget Responsibility (OBR).

However, schemes such as Help to Buy have enabled people to get on the property ladder with a deposit of just 5%.

The index found that only having to save a 5% deposit could cut around seven and a half years off the time it takes a single first-time buyer to save up for a home.

The recently launched Help to Buy Isa, which gives first-time buyers a bonus of up to £3,000 towards their deposit savings, could help a single first-time buyer build their deposit up to 12 months faster, the report found.

The Lifetime Isa announced in last week's Budget and set to be available by April 2017 will help savers even more, the report found. This Isa, which will add 25p from the Government for each £1 put in by the saver, would mean a first-time buyer in England and Wales will typically be able to build a deposit nearly three years faster - and a Londoner will be able to build their deposit 19 years faster.

Fionnuala Earley, residential research director at Hamptons International, said: "The Chancellor improved the prospects for those saving a deposit when he announced the Lifetime Isa - available from 2017 - in last week's Budget.

"Under the terms of the Lifetime Isa, single buyers will be able to save up to £4,000 a year and receive a 25% bonus from the Government on every pound they save. They will be able to use these savings 12 months after opening the account to purchase a first home worth up to £450,000.

"This, together with the Help to Buy schemes and the increasing availability of higher loan to value lending, eases the pain for would-be first-time buyers and dramatically reduces the time it can take to save up to purchase a property."

Here are the average lengths of time that it takes a couple to save a 15% deposit for their first home, followed by a single person, according to Hamptons International:

- England and Wales: three years and six months; 13 years and six months

- East: three years and six months; 14 years and six months

- East Midlands: two years and nine months; 11 years and six months

- London: Eight years; 45 years and nine months

- North East: two years; eight years and nine months

- North West: two years and three months; 10 years

- South East: four years; 15 years

- South West: two years and three months; 16 years

- Wales: three years; nine years and three months

- West Midlands: two years and six months; 12 years and three months

- Yorkshire and the Humber: two years and six months; 10 years



First-Time Buyers on Rise
First-Time Buyers on Rise

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