17 yrs to get mortgage deposit

A first-time buyer would have to save for more than 17 years to afford the average deposit on a home, research by Halifax has revealed.

The report from Halifax shows that the average first-time buyer has to find a deposit of almost £29,000 to buy a house - nearly three times more than 10 years ago, despite falling house prices. A decade ago, the average deposit was £9,865, the mortgage lender said. Figures from the Office for National Statistics show the average worker in their twenties with a full-time job earns just under £21,000. Saving 10% of their take-home pay every month would be equal to putting aside £136.Despite their painstaking prudence, it would take 17 years and six months before they had saved enough for the average deposit. The calculation assumes they earn no interest on the money, but this is not impossible with savings rates as low as 0.01%.

The cost of a typical property bought by a first-time buyer has risen to £138,682, about 6.6 times the annual salary of an average fulltime worker in their twenties. A decade ago, the same property would have cost just £68,644, which means it has shot up by about £135 every week over the past ten years. As a result, more than 80% of under-30s are relying on their parents to help them buy their first home. Their parents give or lend the money, but millions less fortunate are not able to call upon the so-called 'Bank of Mum and Dad'. This means that homebuying has become a club only the rich, the well-paid or those with generous parents can afford to join. A typical first-time buyer is 29 and puts down a deposit worth 21% of the purchase price. But excluding those helped by parents, the average age rises to 36.

For young people in London, the situation is even more acute because the average deposit is twice as large as for the rest of the country. In Greater London, the most expensive region, new buyers must find £56,259 to secure a mortgage. Almost one in four first-time buyers in London faced the additional burden of stamp duty, the threshold of which was temporarily raised in 2010 to £250,000 for new owners.