First-time homeowners now need to save for a deposit for over 10 years.
According to Generation Rent, Londoners are flatsharing into their 40s due to rising rents and home prices.
According to recent study, the length of time it takes to save for a down payment on a home in England has increased to over 10 years, underscoring the rising cost for first-time buyers.
Saving up for a down payment for a home would normally take 6.8 years, according to the advocacy group Generation Rent in 2012. However, rising private rentals and increasing home prices have increased that number by about three years, bringing it to 9.6 years.
Many prospective buyers are finding it more difficult than ever to save up a sufficient deposit due to years of property price growth and rents reaching record highs; in fact, according to new research, some people won’t be able to buy a home until they are well into their 40s.
The average deposit for buyers purchasing their first house in 2022 was just over £62,000, according to data released by the Halifax earlier this year. This is an increase of 8% from the average deposit in 2021.
To determine how long it would take the typical single renter to save for a deposit, Generation Rent examined government data on rentals, home prices, and salaries.
Large regional variances were hidden by the headline findings. In north-east England, it would take roughly 4.6 years on average, or the same length of time as it did a decade ago, to save for a deposit.
The worst-affected region was London, where it took an average of 18.3 years for someone to climb the property ladder. But only if the person spent the entire time living in a flatshare. According to the study, they would need to save for 27 years if they wanted to rent on their own.
Some people may be able to purchase a home without having to make a down payment thanks to a few financing choices, though they frequently come with a number of requirements. The first deal of its sort since the 2008 financial crisis, the Skipton Building Society introduced a 100% mortgage in May of this year for prospective first-time buyers who are unable to save for a deposit.
Director of Generation Rent, Ben Twomey, stated that it will take the average worker in many parts of the nation at least ten years to live and save in the private rented sector before they have a mortgage deposit. For Londoners, that amounts to over two decades, and even then, sharing with others who are in their 40s is necessary.