Saving for a typical deposit for a first home takes a year less than it did in 2017, but first time buyers still face a decade of saving to get a 15% down payment, new research has found.
In the first quarter of 2018 the average single first time buyer would have to save for 10 and a half years to raise a 15% deposit on their first home, down on the 11 years recorded in the same quarter of 2017.
The year difference reflects slower house price growth and a rise in incomes, according to the study from Hamptons International and it means that the average single first time buyer who started saving in the first three months of the year would not be able to purchase a home until the autumn of 2028.
But for couples the time needed is halved. Sharing rent and every day household costs such as food and bills means that a couple can save faster, needing five years to save a 15% deposit, under half the time of a single first time buyer and unchanged since 2016.
But for those buying in London the timescale is much longer. A single buyer in London faces 17 years of saving for a 15% deposit and a couple eight years. But it is now six months quicker for a couple to save up for a home in London than last year and the report says that a slowdown in London house price growth and higher income growth explains the change.
The fastest place to save for a 15% deposit is in the North East, where it takes a couple two years nine months and a single person six years and three months.
But there are quicker ways to home ownership. For example using the Help to Buy scheme means that a buyer can get on the housing ladder with a 5% deposit. For a single buyer this would take three years and nine months of saving, some six and a half years faster than saving for a 15% deposit.
A couple saving for a 5% deposit would be able to do so in a year and nine months compared with the five years needed for a 15% deposit, the research also shows while in London the time to save for a 5% deposit rises to three years for a couple and five years and nine months for a single first time buyer.
‘Saving a deposit is still the biggest barrier to buying a first home. It takes a single person more than a decade to save up in the current climate. But the additional support from Help to Buy brings down the time it takes to raise a deposit by over six years for a single first time buyer,’ said Aneisha Beveridge, Analyst, Hamptons International.
‘Slower house price growth in the capital has meant that it’s now six months quicker for a couple, who share household spending, to save up for a 15% deposit in London. But it still takes a couple in London eight years to save up, twice as long as someone buying a home in the North,’ she added.