It takes almost eight-and-a-half years for an aspiring homeowner to save deposit needed to begin property search, with most of them saving £248 a month to begin search for property to buy, a new report said.
The aspiring homeowners take a laborious eight and a half years to raise the 20% deposit often demanded by lenders, the Yorkshire Building Society said. The survey, which questioned 2,000 people, showed that 56% of them displayed concerns regarding their savings for their future home, compared with 40% who believe house prices are still too high and 16% who are concerned about their credit history.
The Bank of England and the Treasury launched an £80 billion funding for lending scheme in August to kick-start lending, and while mortgage availability has increased, much of this so far has been concentrated around people with deposits of 20% or more. Would-be buyers are also concerned about the tightening of borrowing criteria in recent months, as more than one in 10 (11%) expressed worry about being accepted by a lender.
The survey found that even with compound interest, those saving into a typical easy access account with an interest rate of 1.25% would need eight years and six months to raise the typical deposit needed of just over £26,000.
The report also revealed that strong regional variations across Britain, with Londoners needing to find a deposit of just over £60,000, those in Wales requiring around £16,000 and people in Scotland having to raise around £22,000. Around Some 7% of potential buyers plan to approach their parents for extra help, while 4% said they are hoping for an inheritance to help cope with their deposit gaps.