It takes the average British renter seven years to save up a deposit for a house, new research has revealed.
According to a survey by money saving website www.VoucherCodesPro.co.uk, two thirds (62%) of those questioned said they were currently putting money into savings every month in order to purchase a property.
Respondents said that the average amount they had currently saved for a deposit was £3,450 and that they could save £2,300 a year.
Nearly half (46%) of those that said they were not saving indicated that they could not afford to put away money for the future whilst paying their rent and taking care of other expenses.
However, the average renter won’t be able to save up enough funds for a house deposit until 2023.
With the average house price in the UK £196,999, first-time buyers would need £19,699.90 for a 10% deposit.
Based on the fact that the average Briton currently has £3,450 in savings and will save £2,300 per year, researchers were able to calculate that it will take the average British renter seven years to save a 10% house deposit.
George Charles of www.VoucherCodesPro.co.uk, said: “This is worrying. So many Britons want to get themselves onto that first step of the property ladder, but simply cannot because of the inflated house prices in the UK. Taking this, as well as high rental prices into account, means that a majority of Britons cannot afford to pay their rent, bills and other expenses and also put money into savings for a house deposit.
“Whilst it will be interesting to see during the next couple of years what happens with interest rates for those looking at investing in a first-time buyers mortgage; it is also expected that a large percentage of adult Britons are opting to stay at home, or move back in, with parents in order to save up more money.”
There are fears that first-time buyers are being squeezed out of the market due to the dwindling supply of suitable homes and ballooning property prices.
Tougher affordability checks from lenders and rising house prices have made it increasingly difficult for first-time buyers with smaller deposits to get on the property ladder.
The government has introduced a number of new schemes in recent years to help those looking to buy a home, including Help to Buy and Right to Buy. In the Autumn Statement last year, Chancellor George Osborne unveiled plans to build 400,000 homes and announced a 3% rise in stamp duty as part of the government’s aim to curb the buy-to-let sector.
Help to Buy ISAs, introduced in December, give first-time buyers saving for a deposit the opportunity to put away £200 a month in a dedicated ISA that the government will top up by 25%, up to a maximum of £3,000.
You can open an account with a one-off lump sum of up to £1,000 in addition to the monthly maximum, while couples buying together can combine their bonuses, giving them boost of up to £6,000 towards a deposit for a first home.
Halifax currently offers the highest interest rate at 4%, followed by Virgin Money at 3%. Other banks and building societies offering Help to Buy ISAs include Barclays, Lloyds Banking Group, Nationwide, NatWest and Santander.
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One upside of the ‘Ballooning Property Prices’, which no-one seems to mention is that when the home-owning grandparents and parents pass on, there will be massive amounts of equity available. A third of a very mediocre house in the home counties would go a very long way for example, and what if you are an only child?
No-one likes to benefit from someone else’s death but the reality is that there will be a lot of very wealthy people out there in good time and if they’ve already bought their own home, what else will they spend it on? I know not everyone is that ‘lucky’ but there are many who are and the problem will solve itself.