It takes almost six years for a first-time buyer to make a 10% deposit on a typical property in Britain – but in London this rises to nine years.
This is according to a report from Nationwide Building Society, which found that, based on the average house price for first-time buyers in Britain, those entering the property would need to save £23,000 to make 10% savings.
But in London this figure is soaring, leaving many unable to buy property unless they receive financial support from family members.
Nationwide’s analysis found that while affordability was most limited in London and the South East of England, properties in the North and Scotland were much more affordable, meaning the size of deposits was significantly smaller.
The report also found differences between occupational groups, with affordability being most challenging for those working in sales and customer service roles. However, it was easier for people in managerial and professional roles, Nationwide found.
But despite this, conditions for starters are improving. Andrew Harvey, Nationwide’s senior economist, said affordability problems have eased over the past year as house price growth is below the pace of earnings growth and falling mortgage rates.
He explained that the proportion of first-time buyers buying a home was ‘above the long-term average’. In fact, new buyer activity was about 20% higher than in 2024.
“Our main affordability benchmark shows that a potential buyer earning the average UK income purchasing a typical first-time buyer property with a 20% deposit would have a monthly mortgage payment equal to 32% of their take-home pay,” he said, “slightly above the long-term average of 30% and well below the recent high of 48% from 1989.”
An improvement in the house price-to-profit ratio for first-time buyers means it is now easier for them to save for a down payment. But there are still major challenges.
Not least for those who live in areas where house prices are more expensive. So while statistics generally suggest across Britain that it would take six years to save 10% of £23,000, this varies hugely when we look at regions.
Harvey said a 10% deposit in London is more than three times larger than the equivalent in the North.
It would also take a Londoner nine years to save for their deposit, compared to around four years for someone buying in the North, based on a saving of 10% of their average take-home pay.
“As a result,” he added, “a significant portion of first-time buyers still need to rely on the help of friends and family to make a down payment.
“In 2024/25, over a third of first-time buyers had some help raising a deposit, either in the form of a gift or loan from family or friends, or through an inheritance.”
Ross Lacey, director and independent financial advisor at Rayleigh-based Fairview Financial Managementspeaking to the Newspage Agency, said: “We are seeing increased activity from start-ups.
“Falling fixed interest rates, schemes such as the Lifetime ISA and higher income multiples offered by lenders to first-time buyers have all helped to make it easier to get onto the property ladder.”
But Darryl Dhoffer, founder of Bedford-based The Mortgage Geezerthought Nationwide’s report revealed “a healing but divided market.”
He said: “While the monthly payments are manageable (32% of wages), the hurdle for a £23,000 deposit remains brutal.
“The average wait time of ‘six years’ (nine years in London versus four in the North) assumes tenants could spare £320 a month.
“For many in the South, buying without family help remains virtually impossible, while the North offers a much more realistic path.”