New research from Halifax show that only 14 per cent of non-homeowners are saving up for a deposit, even though over three quarters of those surveyed said they had ambitions to become a homeowner in the future.
The report showed:
Only a third (32 per cent) of non homeowners have a realistic plan to buy a house within the next five years
14 per cent say they are saving every penny for a deposit and making sacrifices to their lifestyle to do this
A further 14 per cent are trying to save for a deposit but spend spare cash on having a good time
Halifax has launched Head Start Home Saver, a new initiative to encourage potential first time buyers to save for a deposit.
The Halifax Head Start Home Saver initiative has been designed to give borrowers a boost when they move into their new home. When a potential first time buyer builds the balance of their Halifax savings accounts for 10 out of 12 calendar months of the year immediately before taking out a Halifax Home Saver mortgage from the dedicated first time buyer range, they will receive a £600 payment into the account from which they pay their mortgage.
Customers can save into any Halifax savings account to qualify for the reward and they can choose from a number of mortgages from the dedicated range of first time buyer mortgages.
Simon Kenyon, Halifax savings director, commented: “We know from our own research that for some customers to get on to the ladder, their savings behaviours need to change. With Head Start Home Saver, we are rewarding customers who save for their deposit with Halifax. The offer is available for customers who have already been saving for a deposit as well as providing an incentive for those customers who want to get on the ladder but have yet to develop that savings behavior. There are numerous costs in that first month of homeownership, whether it is setting up an internet connection, buying new furniture, or paying council tax, so a helping hand in that first month of homeownership is a clear benefit. Many customers, of course, will use the reward to pay their first monthly mortgage installment2”.
As an example, a customer might transfer £12,000 of their savings into a Halifax Web Saver Reward account paying 2.80 per cent. Under Head Start Home Saver, they might set up a plan paying £250 a month into the account for 24 months, at the end of which they will have generated £18,682 for a deposit (including interest). If the customer then uses that sum for a dedicated Halifax first time buyer mortgage, they will also receive the £600 reward.
