Post Office mortgages research shows first time buyers spend 4 years saving for their new starter home
Post Office Money research shows that the average first time buyer will spend 4 years savings for their first home deposit.
Their findings also show:
- First time buyers commit 20% of their joint income to contribute to this deposit
- English towns Blackpool, Lincoln & Hull are affordable hot-spots for first time buyers
- In the UK 57% of properties sold were in areas affordable for fist time buyers
The research showed that people were prepared to live a leaner lifestyle to in order to make property ownership a reality. With the average deposit for a first home reaching £51,500 in the UK last year according to the Office for National Statistics, which ranged from £21,571 in Blackpool to £173,431 in London, Post Office Money research found that new homeowners were able to set aside 24% in advance of their purchase. 30% of this deposit was found to be from family contributions.
Areas the research found where first time buyers were most willing to compromise to achieve the deposit they needed included:
- Quality of lifestyle while savings – 31%
- Length of time it took to save for the deposit required (e.g. did not care how long it took) – 23%
- Location of the new home – 19%
- Specifications of the new home e.g. size of garden – 17%
Areas where commonly sacrifices were made include not going on holiday (31%); not going out (30%); missing out on takeaways (26%). Some lifestyle changes were found to be more radical – 1 in 5 (22%) were prepared to move back in with their parents or downgrade their current rental property (9%). People living in the North West were most likely to take on additional work to boost their income
The research found that not everyone found these sacrifices easy to maintain with one in five admitting that their motivation waned over time in the form of “saving holidays” where they opted out for a period of saving for their new home.
These findings showed that the main causes for this was a “need for a holiday”, special occasions or a need to dip into savings to fund a particular requirement.
Top 10 most affordable areas for local first-time buyers
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|FTB income||% of city affordable|
Click here for more information on Post Office First Time Buyer Mortgages
Research: Post Office Money