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Longer wait for a home loan

1 June 2005

People are taking longer than ever to save-up enough money for a deposit on their first home, new figures show.

The average amount of time it takes a first-time buyer to amass enough money for a five per cent deposit is now four years and nine months, National Savings and Investments revealed today.

Dax Harkins, senior savings strategist at National Savings and Investments, commented: "Despite a recent cooling house market, house prices have continued to outstrip both savings rates and incomes over the last year, which means potential first-time buyers need to start saving sooner and harder to get into the market."

National savings found that things were worst for first-time buyers in East Anglia, where saving for a deposit on a first home now takes a record five years.

And even residents of Scotland - the least affected region - now face a seven per cent increase in the time it takes to build up a deposit - from three-and-a-half years six months ago, to three years and nine months now.

But the government-backed savings and investment provider did see some reasons optimism.

NS&I pointed out that cooling house prices might boost affordability in the months to come.

House price inflation has dropped in the last six months, with prices rising up 2.4 per cent, while the time it takes to save-up a deposit has stabilised in London, the South East and the South West.