Brits need to save for 27 Years for a Deposit on a New Home

New research from MoneySuperMarket this week reveals that prospective homeowners in some areas of the UK would need to save for a staggering 27 YEARS before they could afford to buy in the area they currently live. The situation is particularly bad in London, with boroughs in the capital occupying 16 of the top 20 spots requiring the biggest house deposits relative to their average salaries.

Using its mortgage affordability calculator, in combination with ONS and Land Registry data, MoneySuperMarket analysed average house prices and average salaries to work out the average required deposit needed to buy a house across 441 local authorities in the UK.

The report shows that the local authority of Kensington and Chelsea is the most unaffordable place to live in the UK (not surprising). House prices in the area are on average £1.3million and an average salaried Brit couple would need to accrue a massive 52 per cent deposit (£688,772) before buying in the area. With the combined salary of a couple living in the borough averaging £147,918, people can expect to wait approximately 23 years before they’ve saved enough to buy a home2.

  • London dominates top 20 UK boroughs with the highest average deposit requirements
  • It will take buyers over 10 years to afford the minimum deposit in 34 of the UK’s local authorities
  • In 20 per cent of local authorities, the average minimum deposit is greater than £50,000

Westminster and Camden follow Kensington and Chelsea in the list of unaffordable places, requiring deposits of £554,996 and £490,738 respectively. In Camden, where the average deposit figure is 56.60 per cent, that equates to saving for 27 years, the longest of any area in the UK.

Outside of London, South Bucks, Chiltern and Elmbridge feature prominently in the top 20, with all requiring deposits of over £200,000. To add insult to injury, in 93 local authorities (20 per cent) the average minimum deposit needed is greater than £50,000, and in 51 it’s over £100,000.

Sky high deposits needed

The analysis also revealed that in 75 local authorities, an average salaried couple would need to find more than a 20 per cent deposit to buy an average priced house and, worse still, in 39 local authorities a couple would need to save more than a 30 per cent deposit to buy an average priced house. In total, there are 34 local authorities in which it will take prospective homeowners 10 years to afford the minimum deposit needed to buy in their borough.

See the full report HERE

Deposit Saving Tips:

  1. Stay at home with Mum and dad for as long as you can while saving.
  2. Ask Mum and dad if they can help you out
  3. If you have to rent consider a shared house to save on rent and bills
  4. Budget Budget and Budget your money
  5. Sell your car and trade down, in fact sell anything you can live without.