Moving back in with parents might be the only way onto the property ladder for many young people in Britain who are struggling to save for a deposit on their first home, according to new research.
Over a quarter of a million bought their first property in 2017 but 22% had to live with their parents to be able to afford to do so, the research from consumer group Which? Mortgage Advisers reveals.
The research also found that 37% of those saving each month towards a deposit worked overtime and 19% went as far as selling their personal belongings to help raise more funds.
Overall 62% first time buyers set aside money every month to save for a deposit on their first home. This insight comes as statistics from the Institute for Fiscal Studies show that home ownership among young people has fallen significantly in the past two decades.
Despite the high levels of commitment to saving, first time buyers continue to rely on money from other sources, with a recent report indicating that the ‘bank of mum and dad’ was expected to lend approximately £6.5 billion in 2017.
Which? Mortgage Advisers found that 31% of first time buyers used money that they had inherited to support their deposit and 29% received a contribution from a friend, family member or someone else.
Almost half, some 46% of first time buyers had a maximum deposit of 10%, but with property prices continuing to rise throughout the country, even this amount is out of reach for many. The average property price in the UK is £234,794, which means to have a deposit of just 10% requires savings of over £23,000, without factoring in the additional costs of buying a property.
‘For many, the prospect of saving a deposit for a first home can be daunting, unrealistic and even downright depressing,’ said David Blake, principal mortgage adviser at Which? Mortgage Advisers.
‘However, there are various options out there for first time buyers, from Help to Buy ISAs to equity loans, and even shared ownership. Consider speaking to an independent expert who can offer advice tailored specifically for you,’ he added.
