How much money will you need to save in order to stump up the deposit for an average property in the UK? According to a report in the Daily Mail, based on findings by L&C, it could be as much as £81,000 on average across the country by 2027 as house prices continue to rise. This number is largely affected by London, which could see buyers needing to raise as much as £244,000. This is going up from a current average of just over £50,000 across the country.
In Norwich, the numbers are just as scary. Currently, first-time buyers will need to raise around £40,000 in order to buy an average property in the city. Over the next ten years, this is set to rise to more than £63,000. That’s an increase of around 55%. Given that wages have been stagnating at rates not seen since Victorian times, it is not clear from where these first-time buyers are going to get this extra cash. Even by 2022, just five years from now, the deposit will have gone up to around £51,000. That’s an extra £11,000 savers will need to find from somewhere.
David Hollingworth of L&C said: ‘First-time buyers could be forgiven for giving up hope of owning their first home. There is some stark variation between cities but the fact that London deposits could be almost hitting a quarter of a million pounds by 2027 is alarming.'
The survey reached these results by looking at how house prices have changed in the UK over the last two decades. This was then used to determine the gap between this date and the level of mortgage borrowing required. This was then applied to historical rises in deposits to produce the figures. Some of the figures do seem very high, but even raises approaching half those predicted could rule out many first-time buyers, which is symptomatic of the major housing problem in the UK.
The changes to stamp duty made in the most recent budget will have helped matters, but it is still going to be a huge challenge to raise this kind of money. It’s looking like the bank of mum and dad will have to help an increasing number of young people get on the property ladder.
To find out more about the local and national property market and how things are likely to change over the coming years, or if you would like to chat about anything to do with property investment, give us a ring on Norwich 01603 567804 or send us a message.
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