The Ten Year Struggle To Achieve Home Ownership
According to new research, carried out by Hamptons International, it takes over ten years for a single person to save the necessary money to afford a 15% deposit.
Whilst this may seem a ridiculous amount of time to save for, it represents a considerable decline when compared with the figures from the 2016 report.
On average, it took a single person 10 years and 3 months to save a 15% deposit in 2018, this represents six months less than the figures recorded in 2016.
Similarly, couples sharing the responsibilities are also saving time before they are able to accrue the money for their deposit. The 4 years and 9 months it takes for a couple sharing the burden is 3 months less than the report in 2016.
As prices slow and in some regions reduce, the amount needed to save for also plateaus, making it easier to save quicker. Similarly, wages are continuing to rise. Whereas, there was a time when property increases were outpacing wage increases considerably, this slowdown means that housing can once again become more affordable.
However, there are clear variances between regions. Unsurprisingly, and despite a recent downturn, sustained property increases over the past decade have left potential buyers in London saving for 15 years and 9 months. However, this is down from 16 years and 2 months for a single person saver in 2016.
8 out of 10 regions in the UK are now considered affordable because of the slowdown in property prices, with only the North West and North East remaining the same.
Whilst first-time buyers are able to take advantage of a range of options that allow them to save a 5% deposit, it is clear that affordability is set to remain a clear barrier to entry for many buyers in the near future.
Aneisha Beveridge, head of research at Hamptons International, commented: “Saving a deposit is still the biggest barrier to buying a home, but things did improve in 2018. Slowing house price growth, which is expected to continue, combined with rising wages, meant that last year it was six months quicker to save for a home than it was two years earlier.
“However, despite the slight improvement in affordability it still takes a single person more than a decade to save up to buy a home. Conditions are hardest in the capital where house prices have increased the most over the last decade.
“Despite price growth cooling off more recently, it still takes a single person over 15 years to save up for a 15% deposit for a home in the capital. This is over nine years longer than in the North East, which is the quickest region to save for a home.”
Should more options, like 100% mortgages, become available for people trying to purchase their first property? How could this timescale be reduced for both joint and single savers?