How long does it take to save up for a house in 2021? The answer is that it now takes years longer than it used to.
The pandemic has changed the housing market, potentially for good, but whatever the longer term holds, in the shorter term, first-time buyers have been significantly set back – especially if they live in England.
How long does it take to save up for a house in 2021?
According to research by home buying platform Yes Homebuyers, it now takes the average first-time buyer 1.1 years longer to save up for a 15-per-cent deposit than it did in 2012. For those who live in London, it’s even worse news. The ever-unaffordable capital has just got even more so with first-time buyers having to wait an average of 11 years for their first home. That’s a whole three years longer than back in 2012.
In fact, the real disparity between what was achievable then and now could be even greater, because the 15-per-cent deposit really only became standard in 2020 as Covid made lenders’ rules stricter. The 10-per-cent deposit was the standard for many years, and the new requirement for higher deposits has undoubtedly added to first-time buyers’ house purchasing woes. Indeed for some, it has made homeownership impossible for the foreseeable future.
The South East, as is traditionally the case, is not far behind London in the lack of affordability. The current time for a first-time buyer to save for a mortgage deposit in the region is 7.9 years, having increased by 1.7 years since 2012. The East of England has also seen one of the largest increases, with buyers now required to save for 7.7 years, an increase of 1.6 years since 2012.
The UK area where it now takes less time to save for a house
Remarkably, however, it’s not all bad news: There is one region where the first-time-buyer mortgage deposit saving timeline has reduced – the North East. In this region, it would take just 4.3 years to save a 15-per-cent deposit on the current first-time buyer property price of £119,411.
This is a marginal reduction on the 4.4 years that was required in 2012. Sadly this anomaly should actually be the norm, as this is what should happen when salary growth keeps pace (even if just) with house prices over the years.
Matthew Cooper, Founder & Managing Director of Yes Homebuyers, commented: ‘We seem to consider consistent house price growth as a cause for celebration in Britain. However, the reality is that these ever-increasing property prices are pushing the dream of homeownership further out of reach for many first-time buyers.’
‘Until [the government] actually, increase the supply of stock reaching the market, this gap will continue to widen and the average age of the nation’s first-time buyers will continue to climb as they are forced to save for far longer, simply to accumulate enough for a mortgage deposit.’
How long will you need to save for a home in your area?