A first-time buyer in England purchasing alone will need to save for nine years and five months to afford a 10% deposit and cover the purchase costs, according to new research from realmoving.
Realmoving explains that if you want to buy a property at the current average FTB purchase price of £250,000, you will need to save a 10% deposit of £25,000, in addition to £1,421 for conveyancing, £462 for a survey and £432 for removals, bringing the total to £27,315.
If we set aside 10% of their take-home pay each month, the data shows that it would take 113 months to save enough to cover all their initial costs.
In the past year, more than half (53%) of FTBs purchased a home with three bedrooms or larger. This indicates that as the average age at which people buy their first home has risen to 34, their needs have changed to accommodate growing families.
Realmoving suggests that the high cost of moving is likely to be an additional factor encouraging buyers to jump on the traditional first rung of the property ladder and move straight to a larger property to reduce the number of moves.
However, those who can buy with someone else will halve their time to save to four years and eight months, assuming they both earn the national average wage.
The government recently announced plans to replace the Lifetime ISA (LISA) with a new FTB ISA in 2028, with no age limit. Until 2028, anyone aged 18 to 39 can continue to open and save a Lifetime ISA.
The data also shows that the North/South divide in property prices and income means that FTBs in London will need to save for 13 years to raise the £47,692 needed to get into the housing market.
By comparison, those in the North East would need to save around half the time of six years and seven months to raise £16,763.
On average, FTBs in southern England need to save three years and four months longer to get into the housing market than those in northern England.
Really moving founder and CEO Rob Houghton says: “Raising a deposit and covering moving costs is still the biggest challenge for most first-time buyers who don’t have access to financial support from parents and grandparents.”
“With the cost of living and rents so high, it is becoming increasingly difficult to put money away month after month. Even first-time buyers who save consistently have to save for almost a decade before they can afford to get on the housing ladder.”
“The announcement that a new First Time Buyer ISA will be launched in 2028 without an upper age limit is certainly positive and better reflects the increasing age of First Time Buyers and their desire to buy larger homes from the outset, but it is essential that the £450,000 price limit is also reviewed to ensure it better reflects the value of property in London and the South East.”