It now takes first-time buyers three times as long to save for a deposit as it did ten years ago, new research has claimed.
Saving for a deposit now takes an average of ten years across England – but 24 years in London.
However, the research – from the Home Builders Federation – also claims that the government mortgage schemes, NewBuy, FirstBuy and Funding for Lending are all starting to work.
The study shows that on average across England, without assistance from a Government scheme or other help, somebody in their 20s wanting to purchase an average first-time buyer home (£175,265) would have to save a deposit of £35,053.
Even saving 33% of their net income it would take them nearly seven years (83 months) to put together the necessary deposit. In 2002, a person in the same circumstances would have saved a deposit in 2.5 years.
The reality is even harsher, says the BHF, when you factor in the costs of paying rent, utility bills and council tax while trying to save a deposit.
In the five years to 2002 the number of first-time buyers averaged 543,000 each year. In the last five years to 2012 that number collapsed to 197,000.
The HBF’s latest Broken Ladder report, ‘The Locked-out Generation – A decade of decline and the deposit gap’, is the third such report to be published.
Stewart Baseley, HBF executive chairman, said: “This report reveals the extent of our housing crisis and the challenge faced by today’s young people. Unlike previous generations that took home ownership for granted, today’s generation have a mountain to climb if they wish to own their own home. We are creating a locked-out generation.
“However, there is some light at the end of the tunnel and there are now several ways for people to buy with a more normal deposit. Government-backed schemes such as Newbuy are offering real options for people looking to buy, or move home, and we are seeing more and more take advantage.”
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