Call for your free quote 0800 955 0058

First time buyers must save for 24 years to afford their first property

New research by the Resolution Foundation finds the average first time buyer takes 24 years to save enough deposit to buy their home.



A new study by the Resolution Foundation shows that for low to middle income first time buyers saving 5% of their disposable income it will take 24 years before they have a large enough deposit to get on the property ladder.

This has increased dramatically since the 1990s when it only took three years despite mortgage interest rates at an all time low.

The Foundation report also shows that the property ownership rate has now reduced from 73% in 2007 to 63% today.

Homeownership market is distorted

Resolution has said the rising cost of homeownership in the UK is distorting the generational divide.

The baby-boomer generation has benefited from the accumulated equity and the younger generation is struggling with income to secure a mortgage.

For older remortgage buyers the higher prices gives them the opportunity to release cash which they can use to improve their home and further increase the value.

The study shows 46% of non-homeowners think they will be able to buy in the future and for those on the lowest incomes this increases to 57%. For the richest non-homeowners this figure reduces to 25%.

The main reasons non-homeowners think they cannot buy a home are the high initial cost, the mortgage affordability and difficulty finding a property.

In addition there has been a decline in the number of new buyers as the proportion of households buying with a mortgage is 38% reducing from 47% in 2007.

With reduced supply of suitable properties and more competition, home movers may delay upsizing and remain in their existing home.

There may be fewer suitable homes on the market as the equity release buyer can avoid downsizing and agree a lifetime mortgage to access money from their home.

New schemes make matters worse

According to Matt Whittaker, chief economist at Resolution, new government schemes have increased demand for property and push house prices higher.

The Help-to-Buy scheme makes it easier for first time buyers to take their first steps on the property ladder. In the Autumn statement the Chancellor George Osborne introduced new stamp duty of 3% on buy-to-let landlords which could increase demand in the short term.

These actions only serve to make home ownership less attainable for many while increasing the gains for older homeowners.

Mr Whittaker has said increasing housing supply offers more potential for dealing with the aspirations of first time buyers. To this end the government’s plan to double the housing budget and build 400,000 new homes is a welcomed step.

What are your next steps?

Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or are a buy-to-let investor.

Learn more by using the property value tracker chart, mortgage cost calculator and equity release mortgage calculator. Start with a free mortgage quote or call us and we can take your details.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property for home improvements, holidays or even give to a family member.

Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.


Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
Reverts to 3.59%
1.19% Fixed Rate
60% Loan to Value
£999 App Fee
2-Years Time
Reverts to 3.59%
1.16% Fixed Rate
60% Loan to Value
£1,525 App Fee
Until 01/11/2022
Reverts to 4.09%
1.18% Fixed Rate
60% Loan to Value
£1,034 App Fee
Until 31/10/2022
Reverts to 3.59%

The latest mortgage news


12 Sep 2022

Fifth of homeowners use mortgage advance to go green

As energy bills are rising 22% of homeowners are using mortgage advances to improve the efficiency of their homes to reduce costs.

26 Aug 2022

Equity released hits record levels as more people access cash from homes

Homeowners accessing cash from their properties increased 26% over the year with over £3 billion of equity release in the first six months.

29 Jul 2022

Home movers drop over a third in 2022 compared to last year

The stamp duty holiday last year produced bumper demand from home movers now down a third but still above pre pandemic levels.

18 Jul 2022

Property market is cooling after sixth house price record

Asking house prices rise for the sixth record in a row to £369,968 as demand to buy continues although at a slowing rate.

Call for your free quote 0800 955 0058

  • IMPORTANT

    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.

  • WARNING

    Equity Release - Equity Released from your home will be secured against it. Mortgages – Your home may be repossessed if you do not keep up repayments on your mortgage or other loans secured against it. Think carefully before securing other debts against your home. The information contained in this website is subject to the UK regulatory regime and is therefore intended for consumers based in the UK.

    CONTACT

    Address:
    9th Floor, 30 Crown Place
    London, EC2A 4EB

    Phone:
    0800 955 0058

    Email:
    info@londoncitymortgages.co.uk

    London City Mortgages Limited is a registered company in England & Wales under company number 09278987. London City Mortgages Limited is an Appointed Representative (FCA no. 655965) of Blackstone Moregate Limited (FCA no. 459051) which is authorised and regulated by the Financial Conduct Authority. LCM and LCM Equity Release are trading names of London City Mortgages Limited.

    2024 © London City Mortgages.