The time required for an average individual to save for a mortgage deposit in England has stretched to 10 years, a significant increase from the 6.8 years required in 2012, according to recent research from Generation Rent. This rise can be attributed to soaring rents and house prices over the past decade.
Among the various regions, the North East has remained stable, with the time required to save for a deposit still averaging around 4.6 years.
London, however, has been most affected, with the time required to save for a deposit extending by an additional 4.3 years, totalling to an astounding 18.3 years.
The implications of these rising trends pose challenges for those desiring to start families or single parents in shared accommodation due to lack of affordable options.
The increase in saving time can partially be attributed to the median rent for a one-bed home across England rising from £495 in 2012 to £725 in 2021, coupled with the 72% increase in the price of the average first-time buyer home, which stands at £253,202 in 2023.
In light of these findings, the organization is calling upon MPs to support the Renters (Reform) Bill, aiming to protect renters from unfair evictions and substandard housing. Additionally, Generation Rent advocates for the construction of more affordable homes, including social housing, in desirable locations.
The research, based on government data on rents, house prices, and salaries, calculated the typical single renter’s deposit saving time. Assuming tenants saved 20% of their remaining income after tax, student loan contributions, and rent, the median renter could save £2,630 per year in 2022-23, a rise of 21% from 2012.
However, due to the increase in deposit required for first-time buyers, which has risen from £14,745 in 2012 to £25,320 today, it would now take 9.6 years to save this amount.
London’s high rents and prices meant that it already took 14 years to save the average first-time buyer deposit of £26,037 in 2012. Today, a Londoner would have to save for a staggering 18.3 years to raise the average deposit of £45,979.
Areas such as the West Midlands have seen stark increases in the average house price from £119,887 in 2012 to £204,338 in 2021, with even traditionally affordable areas such as Yorkshire and Humber experiencing an increase from £109,599 in 2012 to £175,087 in 2021.
