By Daniel Hunter
Saving for your first home is eight times harder than it was in the good old days of the mid 90’s, according to new findings published by Barclays.
The amount of time it takes Brits to save for their deposit to buy their first home has increased from just one year in 1995 to more than eight years in 2012.
This leaves potential first time homeowners with a much higher hurdle to overcome and means many are turning to the bank of mum and dad to ease the burden. However, although saving for a dream first home is difficult, conditions have improved since the financial crisis of 2009 when it took an average of 10 years to save a deposit.
This is no surprise given that the average first timer underestimates the amount of money they’ll need for a deposit by £5,000. A typical Brit buying their first home believes a deposit of £25,564 will be sufficient, when in fact the UK average is £31,059.
Despite two thirds needing help, only a third (30%) of first time buyers across the UK expect to get financial help from their family to the tune of £12,212. What’s more, two in five (38%) of these aspiring homeowners view this money as a ‘gift’ which they will not need to pay back, leaving the bank of mum and dad significantly depleted.
“We know it’s tough for people to get on the property ladder, that’s why we’ve been actively listening to home buying dilemmas such as being stuck renting for the long term or moving back to family to save for a deposit," Andy Gray, managing director of mortgages Barclays said.
However, the story isn’t the same all over Britain — in fact, in some regions the situation is far worse. First time buyers in the capital for example are underestimating the amount of money they will need by more than £20,000 and the length of time it will take to save a deposit by almost three and a half years.
The actual deposit required in London is £70,000 while first time buyers believe they need just £47,728 creating a deposit gap of £22,272. It now takes nearly eleven years for a Londoner to save their deposit compared to less than a year in 1995.
Join us on