Terrifying deposit saving times revealed in new report

Terrifying deposit saving times revealed in new report
As house prices continue to rise, the dream of owning a home becomes harder and harder to reach for so many people

The latest research from MoneySuperMarket has suggested that prospective homeowners in some areas of the UK would need to save for 27 years before they could afford to buy in the area they currently live.

As you would expect, the situation is particularly bad in London, with boroughs in the capital occupying 16 of the top 20 spots requiring the biggest house deposits relative to their average salaries.

MoneySuperMarket analysed average house prices and average salaries to work out the average required deposit needed to buy a house across 441 local authorities in the UK.

According to the analysis, the local authority of Kensington and Chelsea is the most unaffordable place to live in the UK. House prices in the area are on average £1.3million and an average salaried couple would need to accrue a 52 per cent deposit (£688,772) before buying in the area. With the combined salary of a couple living in the borough averaging £147,918, people can expect to wait approximately 23 years before they’ve saved enough to buy a home.

Westminster and Camden follow Kensington and Chelsea in the list of unaffordable places, requiring deposits of £554,996 and £490,738 respectively. In Camden, where the average deposit figure is 56.60 per cent, that equates to saving for 27 years, the longest of any area in the UK.

Outside London, South Bucks, Chiltern and Elmbridge feature prominently in the top 20, with all requiring deposits of over £200,000. To add insult to injury, in 93 local authorities (20 per cent) the average minimum deposit needed is greater than £50,000, and in 51 it’s over £100,000.


Sky high deposits needed

The analysis also revealed that in 75 local authorities, an average salaried couple would need to find more than a 20 per cent deposit to buy an average priced house and, worse still, in 39 local authorities a couple would need to save more than a 30 per cent deposit to buy an average priced house. In total, there are 34 local authorities in which it will take prospective homeowners 10 years to afford the minimum deposit needed to buy in their borough.
 
Kevin Mountford, banking expert at MoneySuperMarket, said: “As house prices continue to rise, the dream of owning a home becomes harder and harder to reach for so many people. For those who want to take their first steps onto the ladder, reaching the minimum deposit levels required causes serious financial strain and, as our analysis highlights, many might be priced out of their desired area. Similarly, for those who already own their own home but are looking to take that next step up the ladder, the stretch could be a bigger burden than anticipated.
 
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.
 
When comparing mortgages, it’s vital to work out the total cost over the term of the deal, taking both rates and fees into account. Don’t automatically be put off by high fees, as it may be worth paying them to benefit from lower interest rates. Costs can vary greatly between providers, so taking the time to shop around and work out the total amount you have to repay over the term of the offer is essential.”

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brandonlee10
brandonlee10 24 Jul 2017

The financial ramifications of the triggering of Article 50, the starting gun for Britain's departure from the EU, are far from clear. Buyers will be most cautious in London, given that buying a home in...

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IrisJ.
IrisJ. 19 Jul 2017

Great advice, but may I also add that when buying an already built home, make sure you do all of the proper inspections. Most importantly pest inspection because people tend to get surprised when they

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IrisJ.
IrisJ. 17 Jul 2017

The third point is, in my opinion, the most important one. People have become too inconsiderate and careless when it comes to rented properties. If a landlord wants to protect their property, regular visits...

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cornishalan
cornishalan 10 Jul 2017

Added to the cost of purchasing these village properties are the above average maintenance costs. Particularly where the property is a listed building or requires specialist building skills such as thatching...

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Jo Mullett
Jo Mullett 07 Jul 2017

Here in Swansea, known as the Japanese knotweed capital of the UK, it never fails to amazes me that people have no idea of the potential problems this invasive non-native plant can cause when buying or...

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NathanG
NathanG 05 Jul 2017

McDonalds, for example, have been purchasing their real estate on prime locations for years. If something happens to the company they'll have invaluable assets that will be able to save them. We might

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Jonah
Jonah 04 Jul 2017

Graham: surprised to see you cite the "extra tax liability" as capping out at ?560. It doesn't - the extra tax is exponential, as it is levied on the income (i.e the inflating level of rental income you...

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Dianne Griffen
Dianne Griffen 29 Jun 2017

Be very wary of anyone bringing you deals that they have ?found? and want to ?sell on to you? or ?joint venture? with you on ? you need a proper legal contract for this, involve a RICs surveyor to confirm...

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jason hadzikostas
jason hadzikostas 28 Jun 2017

The most important thing is a budget. Students have to manage their spendings in food, house maintenance, books and many other things. According to me, student Studios are the perfect option for them as...

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SecomTech
SecomTech 22 Jun 2017

AT Last...This was discussed years ago and there was a move towards landlords registering their bad tenants on a database..(can't remember where) It seems a logical step though our leaders will probably...

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Bertrand
Bertrand 02 Jun 2017

How about the Welsh Govt introducing a scheme to protect landlords against "rogue" tenants who are then taken to court for criminal damage to the properties they trash. Pretty unlikely I suspect and politically...

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AmberMorris
AmberMorris 25 May 2017

"Please don't pick a novelty tune-playing doorbell. They're not 'fun'. They're stupid." Laughed a lot to this. It's actually true, though.

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