Time taken to save for a deposit builds

Time taken to save for a deposit builds

The time taken to save for a 15% deposit has risen by 12 months since 2015.

Due to wage growth being overtaken by property price inflation, saving for a 15% deposit on an average home would take a single buyer 11 years and nine months, assuming they are putting away 22% of their income. This is according to research from Hamptons International, which presumes that buyers are able to save this portion of their disposable income.

For a single buyer based in London, this time period grows to 18 years and three months, rising from 15 years in 2015.

However, largely down to the wider availability of mortgage products and government schemes, the time taken for a first-time buyer to save for a property has been cut. The Help to Buy scheme, for example, requires a deposit of 5%, reducing the amount of time that a first-time buyer needs to spend saving up.

Also rising was the proportion of loans made at 90%. Up from 2015’s figure of 3.8%, loans for this share of a deposit had grown to 5% this year.

Commenting on the research was Fionnuala Earley. The director of residential research at Hamptons International stated:  “Lenders are increasingly offering higher loan to value mortgages and the rates charged on them have come down more than for any other mortgage type.

“Taking advantage of Help to Buy or taking out a 9pc mortgage means that the time to save a deposit falls substantially.  Rather than 12 years, a single buyer can save a deposit in just over eight.  And if they use help to buy and save just a 5pc deposit, they can save up in just four years.”

Additional research has also indicated a rise in the number of buyers borrowing with smaller deposits. For the third consecutive month, research from e.surv showed that the proportion of buyers using small deposits had grown – from December’s figure of 16.1%, the share had risen to 21.4%, just under a quarter of the mortgage market. It is important to note, however, that the overall size of the market has fallen by 7.7% since 2016.

Commenting on this was director of e.surv, Richard Sexton, who suggested why the proportion had increased.

“This is a trend which started at the end of last year and has continued into 2017. Likely buoyed by the number of government schemes and low mortgage rates across the board, small deposit buyers are growing in strength in today’s mortgage market.”


Georgia Owen

Georgia is the Content Executive and will be your primary contact when submitting your latest news. While studying for an LLB at the University of Liverpool, Georgia gained experience working within retail, as well as social media management. She later went on to work for a local newspaper, before starting at Today’s Conveyancer.

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