It has been revealed in a recent report that securing a mortgage deposit nowadays takes around ten years.
Struggling to Save for a Mortgage Deposit: A Decade of Increasing Challenges
A new report from campaign group Generation Rent has revealed that the struggle to save for a mortgage deposit in England has worsened over the past decade, with the average time it takes to save for a deposit increasing significantly.
According to the research, the average time it took to save for a mortgage deposit in England increased from 6.8 years in 2012 to 9.6 years in 2023. This increase is largely due to the significant rise in the average first-time buyer home price, which increased by 72% between 2012 and 2023, reaching £253,202.
Ben Twomey, director of Generation Rent, stated that the struggle to save for a mortgage deposit has worsened in the past decade. He advocates for the measures in the Renters Reform Bill to stop landlords from evicting tenants without a valid reason, drive out criminal landlords, and improve the quality of private rented homes.
The research suggests that higher rents and house prices are the main reasons for the increased time it takes to save for a mortgage deposit. The median rent on a one-bedroom home across England rose from £495 a month in 2012 to £725 in 2021. In London, the worst affected region, it takes an extra 4.3 years to save for a deposit, making the average time 18.3 years.
For Londoners, it takes close to two decades to save enough for a mortgage deposit. If a buyer lived in a shared home in London for the entire saving period, they would still only manage to save enough for a deposit in 18.3 years. In contrast, in the North East, it takes around 4.6 years to save for a mortgage deposit, the same as a decade ago.
The research also found that the median post-tax salary in England rose from £16,823 in 2012 to £21,849 in 2021. However, the median renter nationally could only save £2,177 per year in 2012, which rose to £2,630 per year in 2022-23, a rise of 21%.
Generation Rent's research suggests that longer periods of renting, particularly in the private sector, are becoming the norm for many workers. On average, it takes a single renter in London, who receives no subsidies and saves 20% of their post-tax income and rental income, approximately 5 to 10 years to accumulate the full deposit for a first home, depending on exact income levels and housing market conditions.
The image is of Nina Kitaeva.
In conclusion, the struggle to save for a mortgage deposit in England has become increasingly challenging in the past decade, with higher house prices and rents being the main reasons for the increased time it takes to save. The report calls for action to be taken to address these issues and make home ownership more accessible for younger generations.
