First-time buyers take nine years to save home deposit
First-time buyers could be waiting nine years to be in a position to buy their first home, according to Yorkshire Building Society.
The mutual said that’s five years longer than many expect to be saving a deposit, according to research conducted with aspiring homeowners.
Three in five of UK adults aged 18-34 (61%) expect to own their own home within four years of starting to save for a deposit, but Yorkshire worked out it could be a much longer wait for many.
With the average UK house price standing at £246,244 prospective buyers would need to save a 5% deposit of at least £12,312 on average to make their home owning dreams a reality.
However, the building society found that the average amount currently saved by those aged 18-34 is £114 per month, at which rate it estimates would take an aspiring homeowner nine years to save even a 5% deposit. That’s twice as long as they expected to be saving.
For those first-time buyers who are aiming for a 10% deposit it will take 18 years based on average savings.
Save not splurge
The research also highlighted the regrets that Brits have over their spending habits, which could make the difference between getting the keys to a new property sooner rather than later.
Almost two thirds (63%) of those surveyed say they regret spending on impulse purchases and wish they had saved the money instead, with an average of £164 spent on a whim each month.
If that extra £164 a month was combined with the average monthly savings by those aged 18-34 of £114, they could save for a 5% deposit within their expected four-year timescale.
Ben Merritt, senior mortgage manager at Yorkshire Building Society, said: “As our research shows, buying a first home quite clearly remains a life ambition for many people but achieving that remains a struggle, particularly for first-time buyers. The reality of having to save for nearly a decade is a stark reminder that the upfront costs of purchasing a house still prove too big a barrier to overcome for some.
“After almost a full year of staying at home with less opportunities to spend and more cosy nights in, we are reminding people to consider the financial cost of impulse spending. We’re not trying to deny life’s pleasures, we just want to help people save money that would enable them to be able to reach their home owning aspirations sooner.”