Younger workers on an average salary could take up to 13 years to save enough for a 10% deposit on an average-priced house, according to new research from interactive investor.
In contrast, young workers in London on an average wage could take 19 years to save to save enough for a 10% deposit on an average-priced house costing £523,325.
However, research revealed that younger workers living in areas with cheaper house prices could save up more quickly.
In the North-East, even though their average wages are lower, they could save up in an average of eight years from age 21, meaning they might be able to get their own keys by the time they reach age 29.
The 2022 English Housing Survey revealed that the average age for first-time buyers was 33.5 years old in 2022 and 33.8 in London, suggesting that many rely on family help to afford to buy.
Alice Guy, head of pensions and savings at interactive investor, said: “Homeownership is a distant dream for millions of young people who may never be to own their own home.
“Saving 10% of your take-home pay is a mammoth effort and difficult to sustain for the long haul, with all life’s ups and downs.”
She added: “Young people face a stressful juggling act with the triple whammy of high house prices, large student debts and needing to save if they want to start a family. And on top of this, they also need to start saving into their pension if they want to achieve a comfortable retirement in the future.
“For previous generations it was relatively easy to live on beans and toast for a few years, knowing that home ownership would be possible after a few frugal years.
“But now young people have a long slog ahead and it’s easy for something to trip them up along the way, perhaps a period with lower pay or having children earlier than planned.
“It’s now almost impossible for many young workers to get onto the housing ladder without help from their families, meaning that there’s a widening gap between the haves and the have nots.”
Guy continued: “It’s encouraging to see that some lenders are now offering mortgages with lower levels of deposit needed.
“But most of these mortgages need a guarantor, usually a family member who will step in if you can’t repay your loan.
“Homeowners will also need to be carefully not to overstretch, especially as house prices are currently falling. If they buy a house on a 100% mortgage and house prices fall, they could end up with negative equity where the mortgage they owe is more than the house is worth.”
