First time buyers now expect to save an average deposit of 16%, according to research from the Post Office published today (Wednesday 25 April).
Of those who plan to buy their first home within the next five years, almost a quarter, 22%, hope to do so in 2013 with one in seven, 14%, expecting to buy in 2012.
The research also reveals the first time buyers who want to buy and need to raise a deposit, expect to save an average deposit of 16%. The Post Office's own customer data confirms this, with first time buyers in 2011 putting down just over 15% on average.
‘First time buyers are the life blood of the property market and our research shows that challenging stories about first time buyers and wider economic issues have not dampened aspirations to get on the housing ladder,’ said Mike Cook, head of mortgages at the Post Office.
‘It is also interesting to see that despite the resurgence of 10% deposit mortgages recently, the average first time buyer is aiming for the cheaper rates available at 15 or 20% deposit even if it takes that bit longer to save,’ he added.
Almost half of first time buyers, 45%, say they are confident they can fund the deposit by themselves. The rest are using a variety of ways to build the deposit, including one in ten that are planning to use money from an inheritance.
The research found that 28% plan to save for a deposit with the help of their partner, 16% expect help from their parents and the same number plan to use the government’s NewBuy scheme.
‘With the end of stamp duty exemption for homes costing below £250,000, first time buyers will now have to find the money for stamp duty as well as their deposit. It appears that for the majority would be buyers the good old savings account comes to the rescue with the rest receiving a helping hand from family and the government,’ added Cook.
