A decade of saving awaits first-time buyers before they have enough money for a deposit to take the leap onto the property ladder.
By Michelle McGagh on Sep 11, 2012 at 09:18, Reproduced from Citywire Money
A survey by Post Office Mortgages shows the average first-time buyer believes they will not be able to afford a property until they are 35 years old. This age has been rising steadily since the 1960s, when the average first-time buyer was just 24 years old.
Nearly half, 47%, said it would take 10 years or more to save for a deposit, and would-be buyers living in the South of England will have the most difficultly saving enough. A total of 65% of people in the South East and 56% of those in the South West said it would take a decade to raise enough for a deposit, and 47% of Londoners said it would take them far longer.
Of those surveyed many said they would find it hard to get together a deposit at all if their circumstances didn’t change: this meant getting a better paid job or inheriting some money.
Another perceived barrier to house-buying is the inability to afford mortgage payments, with 18% saying they would struggle to meet the cost of a mortgage. However, renters in the UK pay £876 a year more than the average homeowner pays on their mortgage.
Average age of first-time buyers:
John Wilcock, head of Post Office Mortgages, said: ‘The average age of a first-time buyer has been creeping up over the past 50 years and a perceived 10-year wait to raise a deposit doesn’t help matters.
‘The sheer size of the deposit is the most daunting thing for would-be first-time buyers, but it appears to worth the wait if it works out cheaper than renting.’
A total of 29% of non-homeowners said they would be encouraged onto the property ladder if they were offered more government assistance, and 19% said a re-introduction of the stamp duty holiday for first-time buyers would help.
Research by Nationwide shows that the average first-time with a 20% deposit pays out 29% of their take-home pay on their mortgage repayments, and the average mortgage term for a first-time buyer has increased to 28 years from 25 years in 2005 to 2007.