First-time buyers saving up to 10 years for deposit
Nearly one in four first-time buyers say it took them between five and 10 years to build their deposit, research has found.
A survey of people who have taken their first step on the property ladder in the past two years found that 23% had been saving for between five and 10 years beforehand.
More than two-thirds (69%) of those surveyed said it took them more than two years to build up a deposit, while three in 10 (29%) had support from the “bank of mum and dad”, with cash contributions from their parents.
The research from Which? Mortgage Advisers also found that a further 8% were given financial help to buy their home from other family members.
Building up a big mortgage deposit can help home-buyers to secure access to better mortgage rates from lenders, as the buyers are seen as less “risky”.
And of course taking out a smaller loan as a result of having built up a larger deposit can generally result in cheaper mortgage repayments, as there is less money to pay back.
There is also generally less risk of falling into negative equity with a bigger deposit if the value of a property decreases, because the borrower owns a bigger share of their home outright.
However, in some local areas where house prices are rising strongly, would-be home-buyers might also find that certain properties are pushed out of their reach financially while they are saving for a deposit.
Various Government schemes have been introduced in recent years to help first-time buyers take their initial step on to the property ladder, including Help to Buy Isas and also Lifetime Isas, which are due to be launched from April.
And the Government recently launched a housing white paper outlining plans to help home-buyers and renters.
Which? has launched a free interactive tool at which.co.uk/deposit to help people work out how long it will take to save up enough to buy their dream home.
More than 1,000 first-time buyers took part in the Which? Mortgage Advisers survey.