First-time buyers face years of saving for deposit
Monday, 21 November 2011 1:58 PM
The average first-time buyer can get on the housing ladder in four and a half years - provided they are prepared to go without food and clothing and everything apart from paying their rent and bills.
That's the shocking conclusion in a new report from the Home Builders Federation (HBF) published ahead of the new housing strategy announced today by the government.
The report reveals that a first-time buyer in their 20s has £556 a month left after paying their rent and utility and council tax bills. The average starter home in England costs £156,000 with a deposit of £31,000 so they would need to save for 4.6 years. In London things are even worse and they would need to save for 10 years.
Saving a more realistic 50 per cent of their discretionary earnings, getting on the ladder would take an average of nine years in England and 20 in London.
The HBF is urging the government to back a new mortgage indemnity scheme to incentivise banks to lend at higher loan to value rates with lower deposits.
Stewart Baseley, HBF executive chairman, said: "The lack of mortgage availability and the huge deposit gap are stifling a market already starved of supply.
"We desperately need to return to realistic deposit requirements and a properly functioning and sustainable mortgage market."
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