A new report indicates that the process of amassing a mortgage deposit now typically stretches over ten years.
In the bustling city of London, the dream of owning a home has become a daunting reality for many, as the average time to save for a mortgage deposit has more than doubled over the past decade. According to recent data, it now takes an average of 9.6 years for first-time buyers to save for a deposit, compared to 6.8 years in 2012.
This significant increase is largely due to the escalating prices of homes and rents in the capital. The price of the average first-time buyer home has risen by 72% since 2012, reaching £253,202 in 2023. Meanwhile, the rent on the median one-bed home in London has more than doubled, rising from £495 a month in 2012 to £725 in 2021.
These rising costs have made it increasingly difficult for Londoners to save for a mortgage deposit. In fact, it takes close to two decades to save for a deposit in the city, with an extra 4.3 years required compared to the North East, where it takes around 4.6 years to save for a mortgage deposit, unchanged from a decade ago.
The situation has not gone unnoticed. Ben Twomey, director of Generation Rent, has highlighted the worsening struggle to save for a mortgage deposit over the past decade. He has suggested that measures in the Renters Reform Bill, such as preventing landlords from evicting tenants without a valid reason, driving out criminal landlords, and improving the quality of private rented homes, could help alleviate some of the pressure.
Despite the challenges, there is some good news. The median post-tax salary in England has risen from £16,823 in 2012 to £21,849 in 2021, providing a small increase in disposable income for many workers. However, for most workers in much of the country, this still means at least a decade living and saving in the private rented sector before they have a mortgage deposit.
The region in England currently requiring the shortest time to save for a first-time homebuyer loan is not specified in the data provided. Regardless, it's clear that the dream of homeownership remains a distant one for many, particularly in London. As the cost of living continues to rise, it's crucial that measures are taken to make homeownership more accessible for all.
