One of the biggest obstacles facing first time buyers is saving enough money for the deposit, and new research from Which? Mortgage Advisers has shed some light on the steps people are taking to try and raise this money. 

Saving for a Deposit

According to the research, one in five (22%) first time buyers who saved each month for a deposit moved back in with or continued living with parents. Nearly four in ten (37%) worked overtime, and one in five (19%) went as far as selling their personal belongings to help raise more funds.

The study also found that six in ten (62%) first time buyers set aside money every month to save for a deposit on their first home.

The difficulties first time buyers are facing is reflected in statistics from the Institute for Fiscal Studies, which 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 apparently continue to rely heavily 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 a third (31%) of first time buyers used money that they had inherited to support their deposit and three in ten (29%) received a contribution from a friend, family member or someone else.

Rising Property Prices

Almost half (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,” commented David Blake, Principal Mortgage Adviser, 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,” he added. “Consider speaking to an independent expert who can offer advice tailored specifically for you.”

Buying With a Stranger

A separate piece of research, this time by HSBC, found that as many as 14% of young people would be prepared to buy a house with a stranger in order to take the first step on the property ladder.

The study, which questioned 2,000 Brits between the ages of 18 and 40, found that 83% believe owning their own home is permanently out of reach. Around 80% said they would co-own a property with someone who is not their partner, with a further 59% saying they’re at least “open to the idea” of buying with a stranger – if they ticked all the right boxes.

Interestingly, 4% said they would be prepared to move in with “someone they met in the pub”, while just under one in twenty would even consider buying with an ex.

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