A First Time Buyer in England purchasing alone needs to save for 113 months – 9 years and 5 months – to raise a 10% deposit and cover upfront buying costs, according to new research by reallymoving, the comparison site for home movers.
To buy a property at the current average First Time Buyer purchase price of £250,000, a 10% deposit of £25,000 needs to be saved in addition to £1,421 for conveyancing, £462 for a survey and £432 for removals, bringing the total to £27,315. Putting aside 10% of their take-home pay each month, it would take 113 months to save enough to cover all their upfront costs.
In the past year, over half (53%) of First Time Buyers bought a 3-bedroom property or larger, indicating that as the average age at which people buy their first home has risen to 34, their needs have changed to factor in growing families. The high cost of moving is likely to be an additional factor encouraging buyers to jump the traditional first rung of the housing ladder and go straight to a larger property to reduce their number of overall moves.
Buying with someone else halves the journey time to homeownership
Not everyone is in the more fortunate position of being able to buy with another person, such as a partner, friend or sibling. But those that can club together will see their time to save halved to 56 months (4 years 8 months), based on them both earning the national average wage.
Saving into a LISA shaves 23 months off the time to save
The Government recently announced plans to replace the Lifetime ISA (LISA) with a new First Time Buyer ISA in 2028 with no upper age limit, but until then, anyone between the age of 18 and 39 can continue to open and save into a Lifetime ISA, a tax-free savings account designed to help people buy a first home or fund retirement.
A First Time Buyer can save up to £4,000 per year and receive a 25% annual state bonus on top, reducing the time to save by almost two years for those buying alone. For a couple saving into a LISA and benefiting from government top-ups, the time to save is reduced to 4 years and 9 months.
Londoners must save for twice as long as FTBs in the North East
The stark North/South divide in property prices and earnings means that First Time Buyers in London face the daunting task of saving for 13 years in order to raise the £47,692 needed to get on the housing ladder. In comparison, those in the North East need to save for approximately half the time (6 years and 7 months) to raise £16,763.
On average, First Time Buyers in the South of England need to save for 3 years 4 months (40 months) longer to get on the housing ladder than those in the North of England.
Reallymoving founder and CEO, Rob Houghton, says: “Raising a deposit and covering the cost of moving is still the biggest challenge facing most First Time Buyers who don’t have access to financial support from parents and grandparents.
“With the cost of living and rents so high, putting money aside month after month is increasingly difficult and even First Time Buyers who save consistently are looking at almost a decade of saving until they can afford to get on the housing ladder.
“The announcement that a new First Time Buyer ISA will be launching in 2028 with no upper age limit is certainly positive, better reflecting the increasing age of First Time Buyers and their desire to purchase larger homes at the outset, but it’s essential that the £450,000 price cap is also reviewed to ensure it better reflects property values in London and the South East.”
