First-time buyers take a decade to save for a deposit
Before the credit crunch it took first-time buyers two to four years to save up a deposit for a property but a quarter of first-time buyers now say it will take them at least ten years.
In its latest Property Tracker report, the Building Societies Association (BSA) suggests that since September 2010 raising a deposit has been the main barrier to owning a property for potential home owners across the board.
Just a quarter of potential buyers thought they would be able to save up a deposit in three years or less, compared with 69 per cent before the start of the credit crunch in 2008, according the BSA’s survey.
Between 2007 and 2001 owner occupation has fallen from 14.7 million to 14.5 million households.
Although deposits are still an issue, lending has increased 34% in the mutual sector and just 45 per cent of those surveyed said that accessing a mortgage was a barrier to property purchase.
Paul Broadhead, the BSA’s Head of Mortgage Policy, said that it was a myth that no first time buyers are taking their first step on the property ladder.
“Between January and October 2012, building societies and other mutual lenders helped 22,000 more first timers buy their own home than in the same period last year, with around one in every three mortgages made to this group.
“Mutual lenders have contributed most of the net lending in the UK this year as some banks have shrunk their balance sheets,” he said.
A separate survey by Rightmove found that London property prices fell 4 per cent in December, to an average £464,398, the biggest drop in the capital for five years.
Average prices in England and Wales fell 3.3 per cent, the biggest fall since January 2002.
Rightmove suggested that the decline in London prices could signal a “less frothy” housing market in 2013.