First-time buyers will have to save for 13 years from the age 21 to amass a 10 per cent deposit to get on the housing ladder.
Research from investment platform Interactive Investor found that young workers on an average salary for their age saving £28,500 to buy an average priced house costing £285,000 would be 35-years-old before becoming homeowners.
The challenge is greater and more time consuming for 21-year-olds in London who face a 19-year wait to save enough for a 10% deposit, as the average-priced house in the boroughs costs £523,325.
Not all young buyers face the same timeframe to put away enough cash to buy a home.
In the North East, although average wages are lower, first-time buyers could save up in an average of eight years from age 21.
The 2022 English Housing Survey revealed that the average age for first time buyers was 33.5-years-old in 2022 and 33.8-years-old in London, which suggests that many rely on family help to afford to buy.
‘Homeownership a distant dream’
Alice Guy, head of pensions and savings at Interactive Investor, said: “Homeownership is a distant dream for millions of young people who may never be to own their own home. Saving 10 per cent of your take-home pay is a mammoth effort and difficult to sustain for the long haul, with all life’s ups and downs.
“For previous generations, it was relatively easy to live on beans and toast for a few years, knowing that home ownership would be possible after a few frugal years. But now young people have a long slog ahead and it’s easy for something to trip them up along the way, perhaps a period with lower pay or having children earlier than planned.
“It’s encouraging to see that some lenders are now offering mortgages with lower levels of deposit needed. But most of these mortgages need a guarantor, usually a family member who will step in if you can’t repay your loan. Homeowners will also need to be carefully not to overstretch, especially as house prices are currently falling. If they buy a house on a 100% mortgage and house prices fall, they could end up with negative equity where the mortgage they owe is more than the house is worth.”
