Aspiring first-time buyers in some parts of the country will have to save up for more than a decade to raise a big enough deposit to afford a home, with single people and those who have started a family facing the longest path to homownership, according to research from the housing charity Shelter.
Rising house prices, low-earnings growth and the high cost of living mean that a childless couple in their 20s living in England would need to save up for more than six-and-a-half years to build up the 20% deposit typically put down by those stepping on to the housing ladder. Even though wages are generally higher in London and the south-east, so too are rents and other living costs, meaning that in these parts of the country it takes even longer to build a deposit.
In London, Shelter said it would take a couple with a household income of £53,384 13.5 years to build a 20% deposit. It would also take longer than 10 years for an average-earning couple in Brighton, Windsor and Maidenhead, Oxfordshire, Surrey and Devon.
Those who have started a family before trying to buy face a longer struggle if one earner goes back to work part-time. Across England, Shelter said it would take a couple with one child 12 years to build a 20% deposit, and in more than 70% of unitary authorities it would take them more than a decade.
Those living in London needed almost 26 years’ of saving before they had accrued enough. Single people faced an even bigger struggle, typically needing to save up for more than 13 years across England as a whole, and just over 29 years in London.
The research by Liverpool Economics took into account current average wages, rents and house prices, and projections for future increases. Although mortgages are now available for borrowers with deposits of as little as 5%, interest rates are much better for those with bigger deposits and it is much easier to raise a mortgage, particularly in parts of the country where house prices are high.
Shelter’s chief executive, Campbell Robb, said: “Homeownership used to be within most people’s reach, but the rising shortage of affordable homes has pushed house prices up so high that for millions of young people it’s now just a fantasy, however how hard they work or save.
“Parents are right to be worried. The reality is that unless we get a grip on the housing shortage soon, children today could spend decades paying out dead money in expensive rents, or living at home well into adulthood with little hope of planning for their own families.”
