The lengths to which some first-time buyers are going in order to save a deposit to buy their first home have been revealed by new figures from consumer group Which?
One in five (22%) of first-time buyers who saved each month for a deposit moved back in with, or continued living with parents, research from Which? Mortgage Advisers showed.
Nearly four in ten (37%) worked overtime and one in five (19%) went as far as selling their personal belongings to help raise money.
Which? said six in ten (62%) first-time buyers set aside money every month to save for a deposit on their first home.
The research followed a claim from the Institute for Fiscal Studies that young people on middle incomes are less than half as likely to own their own home as previous generations their own age.
Just over a quarter of those aged between 24 and 34 and earning between £22,200 and £30,600 (the middle 20% of the income scale) own a home, research released by the Institute for Fiscal Studies said.
That compared with 65% in the same age group in 1995-6, according to its figures.
First-time buyers who do make it on to the ladder continue to rely on money from other sources, according to Which?
Which? Mortgage Advisers found that a third (31%) of first time buyers used money that they had inherited to support their deposit and three in 10 (29%) received a contribution from a friend, family member or someone else.
Almost half (46%) of first-time buyers had a maximum deposit of 10%.
Which? said the average property price in the UK is £234,794, which means to have a deposit of just 10% requires savings of over £23,000, without factoring in the additional costs of buying a property.
Comments (2)
So a report tells me that to buy a house first time buyers are staying at home, saving an amount each month, worked overtime etc etc. Sorry but that is what I and millions of others did years ago.It ain’t rocket science.
One of the challenges for today’s first time buyers is a basic understanding of money – you know cash. With credit/debit cards, standing orders, on line payments, and contactless payments is it no wonder they have little understanding of the value of money. Sandwich – swipe for it, take away coffee – swipe for it.
Teach our children how to save the pennies. The banks used to have ”piggy banks”
Yes I know I’m an old f**t but age does give you experience and history teaches us a lot. I’ll go back in my shell now.
Hi Nick,
Whilst I respect your opinion, I don’t entirely agree.
I think that whilst the technologies you mention make it considerably easier to spend money (one doesn’t have to make a physical trip to get cash from a cash point/the bank), it is remiss of you to make the assumption that this therefore detracts from the value of the cash itself. I fall into the 24-34 bracket, and am very aware that every time I use my contactless card or buy something online I am spending my actual hard earned cash, even if I never physically hold the coins/notes.
I am lucky enough to have managed to buy my own home, but both my wife and I had to borrow money from parents in order to afford the deposit, as working long hours anyway (with no opportunity for overtime), there was no other feasible way to make additional money.
I believe that, despite both being in relatively well paid jobs, this is down to a huge disparity between income, cost of living and the price of houses. As we had lived together for a number of years, paying rent and associated bills, we simply didn’t have enough left over each month to make any meaningful contribution to a deposit saving fund; this is not due to a lack of understanding of the value of money but simply that, in base terms, we didn’t have enough of it!
That said, I do entirely agree with your point re. teaching children to save the pennies, however kids will be kids as they say, and the culture we now live in seems to mean that unless you have been disciplined in saving from a very early age there are now very few ways to recover financially beyond relying on the sources quoted in the article.