Help To Buy Saves FTBs Two Years In Private Rent
New research has found that Millennials, looking to grasp a foothold on the property ladder, are now able to do so two years earlier because of the additional help from Help to Buy schemes; saving them thousands in additional rent.
The recent revelations, from Compare My Move, focused on the time it takes young and first-time-buyers (FTB), across fifty British towns and cities, to save up an adequate housing deposit whilst privately renting a property.
According to the report, a home buyer saving the 5% deposit needed to use the Help to Buy Equity Loan scheme, will take 12 months to save the money. In comparison to the three years it would take to save the necessary 15% deposit, this will save FTBs over £10,000.
Unfortunately, because of the huge discrepancy in house prices, renters in only fourteen of Britain’s largest towns and cities can accomplish the feat of saving a 5% deposit in under a year.
It would take a saver in Oxford five years and eight months to save a 5% deposit of £17,701 to access the Help to Buy scheme. Unbelievably, it would take over seventeen years, without outside interventions, to save over the £50,000 needed for a 15% deposit.
In contrast, it will take a saver in Burnley just seven months to save the £3,478 needed for a 5% deposit and only one year and nine months to save the £10,435 for a 15% deposit. Encouragingly, renters in large British cities, like Liverpool, are able to save the 5% deposit of £5,675 in only 10 months.
Dave Sayce, Compare My Move Co-Founder, said: “Our research shines a light on the struggle many young renters face in getting together a deposit for their first home.
“In many cities it’s a race against rent to save a deposit as a prospective first-time buyer. In cities and towns where rent greatly outstrips the national average, it can take more than a decade for renters in their 20’s to save up a 15% deposit.
“It’s clear from our research that the Help to Buy scheme acts as an important catalyst for getting renters on the property ladder, and its extension to 2023 in the recent budget will act as a lifeline to generation rent.
Whilst it is positive that the Help to Buy scheme is able to save a renter thousands, in the time it takes the average renter to save their deposit, even with Help to Buy, they would have spent £11,456 on rental accommodation.
Should more be done to help aspiring home owners struggling to save a deposit in expensive locations? Would 100% mortgages help in these circumstances?