Single first-time buyers need a decade of savings to fund a deposit

A new report has found that single first-time buyers need to save for over ten years to finance a deposit for a mortgage, making it harder for sellers in starter homes to find a buyer.

In recent years, it has become clear to both vendors and estate agents that finding a buyer for a starter home has become increasingly difficult as first-time buyers struggle to find the money for a deposit. And sadly, according to a new report by Hamptons International, the situation is only getting worse.

The report has found that the average single first-time buyer in the UK would need to save for ten and a half years to finance a 15% deposit on a house. Moreover, anyone hoping to buy a home in London would need to save for around 17 years as sold property prices continue to outpace wages.

Using data from the Office for National Statistics, the report presumed that once a potential buyer had covered all monthly bills in a rental property, they would be able to, on average, save 22% of their residual income towards a deposit. The report, however, does not take into consideration any unanticipated payments such as vital car repairs or emergency dental work – payments which could hamper their ability to build up savings.

While there are a number of schemes available from the government to aid individuals hoping to buy in the near future such as Help-to-Buy ISAs or shared ownership, for the majority of people who only earn minimum wage, even these policies aren’t enough to help them reach their goal in a reasonable amount of time.

“Saving a deposit is still the biggest barrier to buying a first home,” said Aneisha Beveridge, an analyst at Hamptons International.

“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.”

The knock-on effect from this worrying situation is that an individual who lives in a small home who is hoping to upsize in the near future may find it more difficult to find a buyer. While they always have the option of selling to a landlord who could rent the home out, the increasingly strict government policies regarding buy-to-let mortgages mean that fewer landlords have the financial clout to do so.

Luckily, there are always property buying companies who are happy to buy any home, regardless of value, condition or location. Companies such as National Homebuyers are currently being inundated by homeowners who wish to sell their house fast due to a slowing economy, mass redundancies on the high street and falling house prices.

Can’t find a buyer? Why not ask National Homebuyers for advice, as we buy any house. Call 08000 443 911 or request a call back to find out how much you could get for your property.