How Long Will It Take You To Save Up For A House Deposit?

One of the biggest barriers to homeownership these days is the deposit. Many struggle to save up enough to be able to buy in their desired area – and now new research has revealed that, in some parts of the UK, it would take you 27 years to save up enough to be able to afford to buy a house.

Research from MoneySuperMarket has found that the most unaffordable place to live in the UK is Kensington and Chelsea, where the average house price is £1.3 million. This would mean that the average salaried couple would have to save up £688,772 – 52 per cent of the asking price – before they could buy in this particular borough of London.

And in Westminster and Camden, deposits of £554,996 and £490,738 would be required respectively. In Camden, the average deposit is 56.6 per cent, so it would take 27 years to save up enough – the longest of any area in the UK.

It was also found that in 75 local authorities, the typical salaried couple would have to find more than a 20 per cent deposit in order to invest in an average priced property.

Banking expert with the price comparison site Kevin Mountford said: “It is important to strike a balance when relocating and prospective buyers shouldn’t stretch themselves too far. For those who want to maximise their chances of securing their dream home in their dream area, paying off debts is the best way to start, as existing borrowing will be taken into account by a lender when it comes to applying for, or extending, a mortgage. Reducing the amount you spend each month could also help when it comes to boosting the amount a lender thinks you can afford to borrow.”

Of course, it is tricky to save up enough for a deposit but you do have options available to you if this is something you’re considering. You could, for example, look into shared ownership where if you rent a housing association or council property and have a household income under £80,000 outside London or £90,000 inside London, you could be eligible to buy part of a house and then rent the rest. This would mean the mortgage is reduced, as well as the amount for the deposit, so you’d pay less for the mortgage although you would still have to pay some rent.

Or you could look into the Help to Buy scheme, which can help you purchase a new-build property. You would typically only need a deposit of five per cent and then either the developer or the government would lend you the rest of the deposit up to an additional 20 per cent. This loan is free for the first five years – and it’s only available for new-build houses.

For letting agents in Bishop Auckland, get in touch with us here at Dowen today.