Research reveals time it takes to save for a deposit has fallen


The average time it takes for a single first time buyer to save for a 15% deposit in England and Wales has fallen but it still takes over 10 years, new research has found.

The amount fell to 10 years and three months in the fourth quarter of 2018, six months less than two year ago and overall affordability has improved in eight out of 10 regions.

The research report from Hamptons International says that this means that if a single first time buyer started saving now, it would take them until the beginning of 2029 to be able to afford a home.

It was nine months quicker to save for a deposit in the East of England, the East Midlands and Wales than it was in the fourth quarter of 2016. The North East and North West were the only regions where time to save stayed the same.

A single first time buyer in London, however, would need 15 years and nine months to save, down from 16 years two years ago as house price growth has slowed and incomes have risen. This means that it would now take until around the third quarter of 2034 for a single first time buyer to save for a home in the capital.

The research also found that it was three months quicker for a full time working couple in England and Wales to save for a home in 2018 than it was in 2016.

In the fourth quarter of 2018 the average couple would need to save for four years and nine months to raise a 15% deposit on their first home, half the time it takes a single person. The report says that sharing rent and every day household costs such as food and bills means that a couple can save faster.

In London it was three months quicker for a couple to save for a home in 2018 than it was two years ago and the average couple would have to save up until the middle of 2026 to purchase their first home in the capital, taking seven years and six months on average.

Meanwhile the quickest place to save for a home was in the North East of England, where it would take two years and nine months for a couple to save on average.

Looking over a longer period of time the research shows that in the fourth quarter of 2018 it was six months quicker for a single first time buyer to save for a home in England and Wales than it was 10 years ago.

Indeed, it was a year quicker in three out of 10 regions for a single first time buyer to save for a 15% deposit than it was in the fourth quarter of 2008.

London, the South East and the South West were the only regions where it took longer to save for a deposit in 2018 than 10 years ago. It took a year and nine months longer to save for a home in the capital than it did in the fourth quarter 2008.

However, for couples it took longer to save for a deposit than it did 10 years ago in every region other than in the North East. In the fourth quarter of 2008 it took four years on average to save a 15% deposit. It was three months quicker for a couple to save for a home in the North East in the final quarter of 2018 than it was in the final quarter of 2008.

‘Saving a deposit is still the biggest barrier to buying a home, but things did improve in 2018. 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,’ said Aneisha Beveridge, head of research at Hamptons International.

‘However, despite the slight improvement in affordability it still takes a single person more than a decade to save up to buy a home. Conditions are hardest in the capital where house prices have increased the most over the last decade,’ she explained.

‘Despite price growth cooling off more recently, it still takes a single person over 15 years to save up for a 15% deposit for a home in the capital. This is over nine years longer than in the North East, which is the quickest region to save for a home,’ she added.



Source link

Share on FacebookTweet about this on TwitterEmail this to someoneShare on LinkedInShare on Google+Pin on Pinterest