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New Buyers Face A Decade of Saving for a Mortgage Deposit

First-time buyers purchasing alone in the North East need the shortest time to save at 6.5 years

It takes buyers an average of 10 years and 3 months to save a deposit for their first purchase

The time it takes for a first-time buyer to save for a typical deposit in England and Wales has fallen over the last 2 years, new research reveals.

According to Hamptons International, a sole first-time buyer in the final quarter of 2018 needed 10 years and 3 months to save for a 15% deposit for a mortgage.

The “Time to Save” index calculates how long it takes by analysing average wages in the UK against the costs of renting, including monthly payments, food, transport, and bills, whilst assuming the money saved is put into a cash ISA paying 1.4%.

That is six months quicker than it was for first-time buyers in 2016, whilst first-time buyers purchasing as a couple also need less time to save the 15% deposit, with the time it takes falling by 3 months to an average of 4 years and 9 months.

Solo first-time buyers in the North East have the shortest wait time to save for the 15% deposit at 6 years and 6 months, although the data shows this has not changed since 2016.

By comparison, new buyers in London need an average of 15 years and 9 months to accrue their mortgage deposit funds, some 3 months shorter than 2 years ago.

“Saving a deposit is still the biggest barrier to buying a home, but things did improve in 2018,” said Aneisha Beveridge, Head of Research at Hamptons International.

“Slowing house price growth – which is expected to continue – combined with rising wages, meant that last year it was six months quicker to save for a home than it was two years earlier. However, despite the slight improvement in affordability it still takes a single person more than a decade to save up to buy a home.”

According to loans and mortgage lenders Ocean Finance, buying a house costs homeowners 43% more than tenants spend renting over a typical 25-year mortgage.

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