Latest Research: Affordability for first time buyers to purchase a home | CityLets YorkCityLets York

As first time buyers are eager to get on the housing market yet are finding it more and more difficult to do so, our latest research reveals that affordability is improving in eight out of 10 regions within the UK. 

Single first-time buyer 

The average time it takes for a single first-time buyer to save for a 15% deposit in England and Wales fell to 10 years and three months in Q4 2018. This was six months less than two years previous (Q4 2016) when it took 10 years and nine months to save – a sign that affordability has improved slightly (table 1).

TABLE 1: 

This means that if a single first-time buyer started saving now, it would take them until the beginning of 2029 to be able to afford a home. Despite this being a considerable amount of time, it is optimistic that eight out of 10 regions in the UK saw a fall in the amount of time needed for a single first-time buyer to save a 15% deposit over the last two years.

Whilst affordability has improved most over the last two years in the East, East Midlands and Wales for a single person, reducing the time required to save for a deposit by nine months – Yorkshire and Humber has seen the time reduce by 3 months. The North East and North West were the only regions where time to save stayed the same (see Chart 2 below)

CHART 2: Time to Save for a 15% Deposit – 2 Year Change 

In contrast to a first time buyer in Yorkshire and Humber needing 8 years to save for their deposit before purchasing, if you were looking to buy in London you would need almost double this amount of time (15 years ad 9 months).

These improvements in affordability can be attributed to house price growth slowing as incomes continue to rise.

Couple first-time buyers 

On average in the UK, the research showed that it was three months quicker for a full-time working couple in England and Wales to save for a home in 2018 than it was in 2016. As Chart 2 above shows, the latest data in Q4 2018 dictates that the average couple would need to save for four years and nine months to raise a 15% deposit on their first home, half the time it takes a single person. Sharing rent and every day household costs such as food and bills means that a couple can save faster.

This amount of time varies however throughout the regions – with most regions showing no improvement in the amount of time it would take to save for a 15% deposit. That said, it is still beneficial to be buying a property between 2 people rather than going it alone.

The quickest places to save for a home as a couple include North East, Yorkshire & Humber, North West, South West and West Midlands.

10 year change 

In contrast, over a period of 10 years, we can see that four of our regions showed no sign of improvement in the time required to save with London and South East requiring an additional 1 year and 9 months or 1 year and 6 months respectively to save for a property for a single purchaser (see Chart 3 below).

The only region where affordability had improved for couples across the UK in a 10 year period was the North East reducing the time by three months to save for a deposit, whilst the the amount of time had increased by a year or more in both the South East and East of England.

CHART 3: Table 2 – Time to Save for a 15% Deposit – 10 Year Change

COMMENT: Aneisha Beveridge, Head of Research, Hamptons International said:

“Saving a deposit is still the biggest barrier to buying a home, but things did improve in 2018. Slowing house price growth – which is expected to continue – combined with rising wages, meant that last year it was six months quicker to save for a home than it was two years earlier. However, despite the slight improvement in affordability it still takes a single person more than a decade to save up to buy a home. 

“Conditions are hardest in the capital where house prices have increased the most over the last decade. Despite price growth cooling off more recently, it still takes a single person over 15 years to save up for a 15% deposit for a home in the capital. This is over nine years longer than in the North East, which is the quickest region to save for a home.” 

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