It would take 13 years for a single first-time buyer to save a deposit in England and Wales, and 46 years in London, according to new research.
The Time to Save Index, launched by estate agency Hamptons International and based on data since 1999, looks at how changing market conditions impact an average first-time buyer’s ability to save for a deposit.
It found that a typical first-time buyer in the third quarter of 2015 would take 13 years and six months to save a 15% deposit. This is 30 months longer than in 1999, but nine months faster than in 2014 – a sign that affordability is improving.
Buying a house as a couple or pooling together with friends cut down the saving for a deposit time significantly. According to the index, it takes the average couple in England and Wales just three and a half years to save up for a deposit. However, in London it would take eight years for couples to save up enough money.
The North East was the quickest place to save for a deposit, with single first-time buyers taking less than eight years, and couples taking two years.
More schemes available for first-time buyers
Fionnuala Earley, residential research director at Hamptons International, says: “The Chancellor improved the prospects for those saving a deposit when he announced the Lifetime Isa – available from 2017 – in last week’s Budget.
“Under the terms of the Lifetime Isa, single buyers will be able to save up to £4,000 a year and receive a 25% bonus from the government on every pound they save. They will be able to use these savings 12 months after opening the account to purchase a first home worth up to £450,000.
“This, together with the Help to Buy schemes and the increasing availability of higher loan to value lending, eases the pain for would-be first-time buyers and dramatically reduces the time it can take to save up to purchase a property.”
For more on how the scheme will work, read Lifetime Isa to help younger people save for property and retirement. More tips can be found in First-steps on the property ladder.