Most people looking to buy a property will need to save a four-figure sum to put down as a deposit. Now, a recent survey has discovered almost one in four people (23%) looking to buy a property for the first time take between five and 10 years to save the required amount of money.
The Which? Mortgage Advisers survey covered more than 1,000 people who were first-time buyers. Over two-thirds of those who took part (69%) said they needed to save for over two years to put together enough cash for their deposit.
Nearly a third required help from their parents
The Bank of Mum and Dad has long been a source of finance for many young people looking to buy their first property. However, this survey bears out how important this is for many first-time buyers trying to get their foot on the housing ladder.
The survey found 29% of buyers sought contributions from their parents to make their house purchase a reality. However, this changed depending on the region people lived in. For example, the figure shot up to 39% of those who were buying property in London – perhaps not a huge surprise. Meanwhile, a further 8% sought financial assistance from other people in their family.
The gap between rising house prices and static wages
Recent years have seen house prices rise significantly in many areas. Additionally, with wages failing to keep up, a whole generation of people are finding it far harder to buy their own property. This generation is often referred to as Generation Rent, since they often find themselves challenged by paying high rental prices and having little left to save towards a deposit each month.
Furthermore, as time goes on, house prices are liable to continue rising too, if only marginally. There is no sign of an impending house price crash at present, which would undoubtedly benefit those looking to get on the housing ladder.
Other notable figures revealed by the survey
There is a stark contrast between the figures at either end of the spectrum in this survey, too, especially when viewing first-time buyers in London. For instance, only 4% of those questioned could save up enough for their mortgage inside a year. This may not be a big surprise, but it remains a significant contrast compared to one in 12 people who must save for 10 years to gather the amount they need. The housing market can change so much in that period, one wonders how the typical deposit amount will change in that time, too.
Furthermore, there is a chance many will only scrape together enough for the smallest deposit. Regardless of the size of deposit, however, it is always important to search for the best mortgage deal, to keep down the monthly payments as much as possible. This is yet another vital factor to consider when assessing which mortgage would be suitable when that all-important deposit target is finally reached.