House price growth pushes average time to save for deposit back by five years

Rising house prices have pushed back the time to purchase a home for first-time buyers by more than five years, according to new analysis from Wayhome.

The research looked at the amount of time that it will take the average first-time buyer to save for a deposit.

According to Zoopla data, average UK house prices have surged by more than £40,000, from £215,127 to £256,535, in the past 5 years – at an annual growth rate of 3.5%. In the same period, the average salary for full-time employees increased from £33,644 to £38,600 – at annual growth of 2.7%
Wayhome revealed that this rise in house prices will add an additional five years for a first-time buyer working full-time to raise a typical deposit, without any other financial support, as it will now take employees 15.7 years to save for a deposit rather than 10.4 years – an increase of 50%.

“Average earnings and salaries for full-time employees have not matched the inflation of house prices in recent years, meaning people are having to save for increasingly longer periods of time before they can afford to own a property,” commented Wayhome CEO, Nigel Purves.

“This means that the those in full-time employment face the reality of needing to save for more than 15 years before they can think about buying. Even when they have the deposits required, strict lending criteria is also prohibiting the possibilities even further.

“With potential homeowners being priced out of property in their own areas and the deficit in growth between earnings and house prices only widening, it is clear that the UK property market needs to adapt and focus on finding new solutions to combat the current property landscape, to ensure more and more people have the opportunity to take their first steps onto the property ladder.”

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