Saving enough money to put down a 5% deposit as a first time buyer now takes on average a whole 12 months longer than it did a decade ago, or nearly 4 years research by National Savings & Investments suggests.
Instead of two years nine months, it now takes three years nine months to save up the pennies, while in some places the rise in house prices has tacked on nearly a year and a half to the time required to save up a deposit.
”Some first time buyers are even taking out unsecured loans in order to afford a deposit,” he says.
Driving the ever-longer time taken to save for a deposit is the slower rate of increases in incomes as compared to house price inflation.
Incomes have gained on average 68% in the past ten years, while house price inflation has averaged 142% over the same period, NS&I says.
As the gap grows between incomes and house prices “those thinking about buying homes for the first time need to start saving earlier”, NS&I states.
First time buyers have been hardest hit in East Anglia, where it now takes 50% longer to save for a deposit than it did ten years ago.
The East Midlands by contrast has seen the time requirement increase by just 8% over the same period, although this still means an average of 42 months to save towards a 5% deposit.
Scotland and Northern Ireland remain the cheapest places to find a property –NS&I figures suggest – taking an average of 33 months to save the required amount.
Surprisingly, Londoners do not have the longest wait, probably because salaries in the capital are higher than the UK average.
NS&I says regular savings will help people onto the first rung of the property ladder, although this does require resilience in the face of continued house price inflation.IFAonline
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