17 year wait before single, first-time buyers can afford a 15% London deposit
Single first-time buyers may have to count their pennies for 17 years before being able to raise a 15% deposit on a home in London, according to data from Hamptons International. While across England and Wales, it takes just over 10 years to save a deposit of equal size.
Couples, on the other hand, are better placed when it comes to getting on the property ladder in London and are able to put away the same amount of deposit in only eight years. The outlook turns even more positive beyond London, as for England and Wales; couples could put together a deposit in just five years. The sharing of everyday costs such as rent, utilities, and grocery bills means couples can usually save the same amount in less than half the time it would take a single buyer. However, a more accurate understanding of the exact length of time taken by an individual or couple to save enough for a deposit would change depending on the location of the property investment, as well as their income and outlays.
The report utilised earnings figures provided by Office for National Statistics and investigated the length of time it would take first-time buyers to put together a deposit if they started saving today. Focusing on young adults in their 20s, the report took into account the amount of savings first-time buyers have left of their incomes after obligatory deductions such as tax, national insurance, rent, council tax, as well as after dealing with expenses such as food, transport and utility bills.
Moreover, the research also took into account potential increases in incomes that typically complement an individuals’ progress up the career ladder, and assumed wages and house prices would increase in line with Office for Budget Responsibility forecasts. In addition, the report assumes households can save 22% of what is left of their incomes towards a deposit.
While a decade may seem daunting, the marginal drop is an improvement on 2017’s 11-year mark. No doubt a result of house prices experiencing downward pressure in areas like London as well as salaries experiencing a slow but steady hike.
The report comes close on the heels of conflicting house price data, leaving homeowners as well as potential buyers in the difficult position of wondering what to believe. As it stands, the average cost of a home in London now remains at £485,000 according to official data published by the Office for National Statistics earlier this month.