A household saving the UK median of £180 per month would take 10.9 years of consistent saving – without drawing on these savings once – to equal £23,549, the average amount paid by first-time buyers on a deposit in England from 2021 to 2022, research by equity release lender more2life has found.
First-time buyers in Wales paid an average deposit of £17,038. At the same rate of £180 saved per month, this group could expect to wait 7.9 years to afford a deposit.
Meanwhile, first-time buyers in Scotland paid an average deposit of £14,230 to secure a property, meaning it would take 6.6 years to save the correct amount.
| The value of an equity release enhanced gift for UK first-time buyers (FTB) | ||||
| Country | Yearly savings | Average FTB price | 10% deposit | Time taken to up deposit (years) |
| England | £2,160.00 | £235,489.15 | £23,548.92 | 10.9 |
| Scotland | £2,160.00 | £142,303.38 | £14,230.34 | 6.6 |
| Wales | £2,160.00 | £170,377.62 | £17,037.76 | 7.9 |
A single equity release gift could propel a younger homebuyer onto the ladder in far quicker time.
Indeed, data from the Key Market Monitor reports that the average sum gifted from equity release for use as a deposit in the UK reached £61,596 – far above the average deposit for a first-time buyer and therefore allowing them to secure a better rate mortgage with a lower LTV.
First-time buyers in Scotland (83%) would enjoy the best loan to value following a family member using equity release to gift them a deposit followed by those in England (84%) and Wales (85%).
| The value of an equity release enhanced gift for UK first time buyers | |||
| Country | Average FTB house value | Average ER Deposit for FTB | Loan to Value |
| England | £235,489.15 | £61,551 | 84% |
| Scotland | £142,303.38 | £38,274 | 83% |
| Wales | £170,377.62 | £43,392 | 85% |
Les Pick, director of manufacturing and adviser propositions at more2life, said: “Trying to save enough for a deposit is daunting at the best of times but with the cost of living eating into people’s disposable income and interest rates squeezing affordability further, first-time buyers are finding it harder than ever to take that first step onto the ladder.
“However, with the older generation often sitting on twenty or even thirty years of house price growth, now may be the time to consider whether an early inheritance could make a positive difference to someone’s home ownership ambitions.
“Shaving 11 years off the amount of time it takes someone to buy their first property and positioning them to get a better mortgage deal can make a real difference to their future finances.
“However, over-55s need to ensure that they fully consider all their options and speak to a specialist adviser who will help them make the right choice for their individual circumstances now and in the future.”
