According to a report recently released by Which?, first time buyers need up to 10 years to be able to save a deposit for a new home.
Almost 25% of respondents said that they had needed between five and 10 years to save a deposit for their first home, while it took more than two years for 69%. Almost 30% said that they had required help from their parents to be able to afford a home, while 8% stated that another member of the family had provided financial assistance.
There are a number of factors which have led to first time buyers putting down larger deposits, including strong house price growth and new affordability checks. Data from the Council of Mortgage Lenders indicates that the average amount borrowed by a first time buyer is £132,400. This equates to 84.3% of the property value, which suggests that buyers need a deposit of almost £25,000.
First time buyers have an average household income of £40,200, which is an indication that they may struggle to borrow the six figure sum required, while also managing to pay household bills. Although data in 2016 demonstrates that there was an increase in mortgage lending to this group, with greater numbers buying in areas with lower priced properties.
First time buyers are advised to seek professional advice from a mortgage adviser who has studied on a CeMAP training course, to help them find the most suitable mortgage deal to keep costs low.
