A Fairinvestment.co.uk survey of more than 2,000 people found that the average amount saved each month is £139, an annual total of £1,668, which will not make much of a dent in the average first time buyer mortgage deposit of 15 per cent.
The average house price now stands at £174,178 according to the Halifax House Price Index for August, and 15 per cent of this is £26,127. At a rate of £1,668 a year, Fairinvestment.co.uk has worked out that it would take a first time buyer more than 15 years to save the average 15 per cent deposit required for a first time buyer to secure an average priced house, assuming that house prices remain level over that period.
The research also found that women would take longer to save the amount than men as, on average women save just £121 each month, it could take 18 years to save the amount required, compared to the average male save of £185 which would take just under 12 years. However, if a male and female couple combined their savings they could save the 15 per cent deposit of £26,127 in half the time, just seven years.
Commenting on the results, chartered financial planner at Fairinvestment.co.uk Sharon Bratley said: “The news comes as no real surprise considering the state of the housing and mortgage market at the moment. The results just go to show the reality of how first time buyers don’t stand a chance without hefty savings or generous parents.
“A 15 per cent deposit is a realistic expectation for a first time buyer these days, but to save more than £25,000 in practice is not realistic at all. A couple combining savings will be in a better position but it could still take seven years to save the amount needed to secure their first home.
“My advice to prospective first time buyers is to save, save, save. Our research shows that it could take years, so the earlier you start the better. It is also worth shopping around for a high interest savings account, as some offer as much as 8 per cent which could make a big difference to a £25,000 deposit.”
