First-time buyers unable to save deposits

The rising cost of living in the UK is making it harder for potential first-time buyers to secure their place on the property ladder.

With the cost of essentials such as fuel and food on the increase, research from Sainsbury's Finance finds would-be buyers are struggling to get the cash for a home together.

According to the Council of Mortgage Lenders (CML) the average age of a first-time buyer is 29-years-of-age, but only a small number are able to buy a property.

The research finds 16 per cent of people aged 25-34-years-old are saving less than they were a year ago, with the main reason for this being the rising cost of living.

Only nine per cent are saving more. In addition to this, 36 per cent claim they currently are not able to save anything.

"First-time buyers need to have a larger deposit that they did a year ago - in some cases as much as 25 per cent as many mortgage lenders continue to restrict their deals, so those looking to get onto the property ladder need to be saving more not less," said Neil Cameron, savings manager at Sainsbury's Finance.

"Despite this, our research suggests that more people in the first-time buyer age group are now saving less."

Many lenders, including high street giants Halifax and Nationwide, have reshaped their product portfolios in recent weeks, now requiring higher deposits on some loans and offering higher interest rates.

"Those people saving for a deposit on a property should review any savings account they are using for this and make sure that they have one that pays a consistently attractive rate that does not penalise you for withdrawing your money should you need to," advised Mr Cameron.