24 Year Wait For First Time Buyers

New research claims that prospective homebuyers must now save for up to 24 years for a deposit large enough to secure them a mortgage.

The Resolution Foundation has used the Bank of England’s latest study of household finances to suggest that as house prices are rising sharply, it will now take almost 25 years for low and middle-income households to raise a deposit if they save 5% of their disposable income every year.

This is lower than the time needed just before the recession, but is significantly lower than the three years needed in the 1980s and 90s. Additionally, this news arrives despite interest rates remaining at the record low of 0.5%, as set by the Bank of England (BoE) during the financial crisis.

Chancellor George Osborne has launched a series of Help to Buy schemes, including shared ownership and taxpayer mortgage guarantees for first time buyers, promising to turn generation rent into generation buy. However, Chief Economist at Resolution, Matt Whittaker, warns that Help to Buy may boost house price rises, pushing housing further out of reach for low-income households.

He says: “To the extent that these schemes have stoked demand so propped up house prices in recent years, they have served to make homeownership even less attainable for many, while increasing the gains flowing to older homeowners who have been the main beneficiaries of the sustained housing boom.”

Steve Povall, Managing Director of Residential Estates, who also sits on the BoE North West Business Panel says ‘One or two generations ago, it was much easier to buy a house, however as this generation has grown wealthier it makes it more difficult for the current first time buyers to get on the property ladder as house prices are so high.”

About Residential Estates

For over 25 years, Residential Estates has been a prominent independent property management company based in Chester and operating across the North West. The company has expanded into the global market and therefore has clients all over the world. Residential Estates is Chester's first internet based agency and it uniquely combines extensive experience, local knowledge and a drive to have a proactive approach to managing property.

In addition to Residential Estates’ excellent reputation there is a diverse range of property management services available.

These include sales and lettings, property investment, land acquisitions, property management, serviced accommodation and international property sales and investments. Residential Estates has the expertise and knowledge to ensure that buying, selling, investing and renting is always a smooth and simple process.

For more information, please go to www.residential-estates.co.uk

Or contact Victoria Wilson (Marketing and Communications Manager):

victoria.wilson@residential-estates.co.uk

t. 01244 343355

Residential Estates, Maple House, 23 Watergate Row South, Chester, Cheshire, CH1 2LE