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| Housing deposits require more than a decade's savings for first-time buyers | |
| (about 11 hours later) | |
| Families and single people in England will need to save for more than a decade to raise a large enough deposit to buy a home of their own, as rising rents and low wage growth have "moved the goalposts" for first-time buyers, according to research commissioned by the housing charity Shelter. | Families and single people in England will need to save for more than a decade to raise a large enough deposit to buy a home of their own, as rising rents and low wage growth have "moved the goalposts" for first-time buyers, according to research commissioned by the housing charity Shelter. |
| A shortage of affordable homes means today's young people face life-changing choices between starting a family or buying a home, even if they worked hard and saved as much as they can each month, Shelter said.While couples in the north-east might be able to afford to buy after four-and-a-half years, it said singletons in London would have to commit to almost 30 years of saving to build up the deposit they needed for an average first-time buyer property. | A shortage of affordable homes means today's young people face life-changing choices between starting a family or buying a home, even if they worked hard and saved as much as they can each month, Shelter said.While couples in the north-east might be able to afford to buy after four-and-a-half years, it said singletons in London would have to commit to almost 30 years of saving to build up the deposit they needed for an average first-time buyer property. |
| Models prepared for Shelter by housing economist Fionnuala Earley using official figures showed that a couple earning average salaries who put aside a fifth of their income each month after living costs would take six-and-a-half years to afford a 20% deposit on the average £139,920 property bought by first-time buyers. Although mortgages are available for those with smaller deposits, this was the typical figure put down by first-time buyers in 2012. | Models prepared for Shelter by housing economist Fionnuala Earley using official figures showed that a couple earning average salaries who put aside a fifth of their income each month after living costs would take six-and-a-half years to afford a 20% deposit on the average £139,920 property bought by first-time buyers. Although mortgages are available for those with smaller deposits, this was the typical figure put down by first-time buyers in 2012. |
| Lower house prices meant the time taken to raise a 20% deposit was shorter in parts of the north of England - four-and-a-half years, where Shelter said would-be buyers needed to save for four-and-a-half years. In London, where the average first-time buyer property costs £278,417, couples need to save for 10.5 years, while singletons face a 30-year slog. | Lower house prices meant the time taken to raise a 20% deposit was shorter in parts of the north of England - four-and-a-half years, where Shelter said would-be buyers needed to save for four-and-a-half years. In London, where the average first-time buyer property costs £278,417, couples need to save for 10.5 years, while singletons face a 30-year slog. |
| While couples faced the shortest wait before they could afford somewhere, once they had a child and took on associated costs of childcare, building up a deposit became difficult. Working on the basis of a fifth of discretionary income going into savings, the researchers showed a family could typically put by just £54 a month, against £290 for a couple with no children. As a result, even buying the same kind of first-time buyer property would take much longer. Across England, the average number of years saving was put at 11.8 years, while in London it reached 20.5 years. In other parts of the south-east it came in at 13 years. | While couples faced the shortest wait before they could afford somewhere, once they had a child and took on associated costs of childcare, building up a deposit became difficult. Working on the basis of a fifth of discretionary income going into savings, the researchers showed a family could typically put by just £54 a month, against £290 for a couple with no children. As a result, even buying the same kind of first-time buyer property would take much longer. Across England, the average number of years saving was put at 11.8 years, while in London it reached 20.5 years. In other parts of the south-east it came in at 13 years. |
| Shelter's chief executive, Campbell Robb, said the figures revealed "the harsh realities that 'generation rent' is having to confront because of our shortage of affordable homes".He said: "Imagine a 28-year-old couple weighing up their options: they can save for a home now and put off starting a family until they're 35, or they can start a family now but accept they'll be renting until their child is a teenager. | Shelter's chief executive, Campbell Robb, said the figures revealed "the harsh realities that 'generation rent' is having to confront because of our shortage of affordable homes".He said: "Imagine a 28-year-old couple weighing up their options: they can save for a home now and put off starting a family until they're 35, or they can start a family now but accept they'll be renting until their child is a teenager. |
| "Meanwhile, single people face an added pressure to either find a partner or to live with their parents well into their 30s if they're ever to have a hope of saving enough for a deposit." | "Meanwhile, single people face an added pressure to either find a partner or to live with their parents well into their 30s if they're ever to have a hope of saving enough for a deposit." |
| The government has made attempts to increase the availability of 95% loans, launching the Funding for Lending Scheme in summer 2012 and Help to Buy in April 2013. However, experts have warned that the latest scheme could stoke a housing bubble, which could put prices even further out of reach for many buyers. | The government has made attempts to increase the availability of 95% loans, launching the Funding for Lending Scheme in summer 2012 and Help to Buy in April 2013. However, experts have warned that the latest scheme could stoke a housing bubble, which could put prices even further out of reach for many buyers. |
| Top savings accounts | Top savings accounts |
| Derbyshire BS | Derbyshire BS |
| Nationwide BS | Nationwide BS |
| Yorkshire BS | Yorkshire BS |
| Powered by MoneySupermarket for the Guardian | Powered by MoneySupermarket for the Guardian |