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Saving For A Deposit?

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A first-time buyer would have to save for more than 17 years to afford the average deposit on a home, research by Halifax has revealed.

The average deposit put down by someone buying for the first time has nearly trebled over the past ten years to a daunting £28,770.

Figures from the Office for National Statistics show the average worker in their twenties with a full-time job earns just under £21,000. Saving 10% of their take-home pay every month would be equal to putting aside £136.

Despite their painstaking prudence, it would take 17 years and six months before they had saved enough for the average deposit. The calculation assumes they earn no interest on the money, but this is not impossible with savings rates as low as 0.01%.

The research, based on figures from the Halifax, Britain's biggest mortgage lender, highlights the nightmare facing young people who want to get on the property ladder. The cost of a typical property bought by a first-time buyer has risen to £138,682, about 6.6 times the annual salary of an average fulltime worker in their twenties.

A decade ago, the same property would have cost just £68,644, which means it has shot up by about £135 every week over the past ten years. As a result, more than 80% of under-30s are relying on their parents to help them buy their first home, according to the Council of Mortgage Lenders.

Their parents give or lend the money, but millions less fortunate are not able to call upon the socalled 'Bank of Mum and Dad'. This means that homebuying has become a club only the rich, the well-paid or those with generous parents can afford to join.

For young people in London, the situation is even more acute because the average deposit is twice as large as for the rest of the country.

In the capital, a first-time buyer is typically putting down a deposit of £56,259, equal to nearly a quarter of the property's value of £237,760.

Martin Ellis, housing economist at the Halifax, said: 'The "noughties" were a difficult period for many looking to get on to the property ladder. The substantial rise in house prices over much of the decade prevented many potential first-time buyers from entering the housing market.'

The Halifax research shows the number of first-time buyers has collapsed to 200,000, compared to more than 500,000 in 2000. The fall is largely because in the credit crunch, mortgage lenders want a big deposit before handing over their cheapest deals.

A typical first-time buyer is 29 and puts down a deposit worth 21% of the purchase price. But excluding those helped by parents, the average age rises to 36.

All this 'wealth' and nothing to show for it.

'Twas no more than an engineered financial hiccup.

For shame Britain. For shame.

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For shame Britain. For shame.

If barely anyone can buy houses at these prices, then barely anyone can sell them.

This is a very, very good thing. My old house is for sale (for over a year now...) and already less than I sold it for in '05.

When it is the price I paid in '98, compounded for inflation at 4% a year, I may consider buying again. :)

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I had a "fight" with my wife last night. She is trying to help in our efforts to get a house by picking up more work only for me to tell her her that £65 for a day's work was hardly worth bothering with in relation to the sorts of sums needed to buy a house. She was offended to hear that her efforts were worth so little, yet its a good deal higher than NMW.

Soemthing has gone very wrong in this country and its not me or the wife.

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I had a "fight" with my wife last night. She is trying to help in our efforts to get a house by picking up more work only for me to tell her her that £65 for a day's work was hardly worth bothering with in relation to the sorts of sums needed to buy a house. She was offended to hear that her efforts were worth so little, yet its a good deal higher than NMW.

Soemthing has gone very wrong in this country and its not me or the wife.

That part could be re-phrased a little better? :rolleyes:

(Maybe it's just me and my sordid mind.)

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That part could be re-phrased a little better? :rolleyes:

(Maybe it's just me and my sordid mind.)

How much did you earn tonight luv....

Wife: $65.50

Great..........which tight sod gave you the 50p?

Wife: <puzzled>: They all did.

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I had a "fight" with my wife last night. She is trying to help in our efforts to get a house by picking up more work only for me to tell her her that £65 for a day's work was hardly worth bothering with in relation to the sorts of sums needed to buy a house. She was offended to hear that her efforts were worth so little, yet its a good deal higher than NMW.

Soemthing has gone very wrong in this country and its not me or the wife.

She could buy a gold sovereign with 3 and half days work at that rate. Put her to work, spend the proceeds on sovs and within a year or two, with gold up and houses down, she'll have made a decent contribution towards a deposit.

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Yes the boe can push rates well into real negative but still many have to squirrel savings for decades. The research confirms that imo a lot of demand has gone and is unlikely to come back. In addition the boe imo cannot stimulate the demand side.

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All this 'wealth' and nothing to show for it.

'Twas no more than an engineered financial hiccup.

For shame Britain. For shame.

So, it takes 17 years to save for a 20% deposit. Just for fun, at the same rate the whole house takes 85 years.

I don't think I would lend this amount of money to anyone who took more than 6 years to save it up.

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really is game over. if you lived through the hpi mania and saw affordability disappear over the horizon, you probably have the gumption and self discipline to save for the huge deposit, but if you are 22 today, fresh graduate, working in a call centre, living in any major city in the country and you are loooking at minimum 17 years you just put your hands up and give up. being around 40 when you get your first home, you will be near 50 before you have paid enough down to get something bigger.

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Their parents give or lend the money, but millions less fortunate are not able to call upon the socalled 'Bank of Mum and Dad'. This means that homebuying has become a club only the rich, the well-paid or those with generous parents can afford to join.

There are many many left and left of centre people I meet that miss the above.

Labour voting boomers in particular have a massive blind spot for this. They grew up as poor children from a working class background. They just cannot acknowledge they are now wealthy and today's poor young are totally shafted.

I don't think I have actually met a left winger over 30 who thinks high house prices are bad.

P

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This means that homebuying has become a club only the rich, the well-paid or those with generous parents can afford to join.

Which is exactly how it has been throughout nearly all of recorded history.

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Which is exactly how it has been throughout nearly all of recorded history.

Wow, you're a real progressive aren't you?

Perhaps we could also withdraw voting rights for the oiks too, since that's a relatively new phenomenon?

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Which is exactly how it has been throughout nearly all of recorded history.

Possibly but would be interesting to know the amounts needed in past decades post WW2.

What was the average deposit and wage in 1995 (post previous HPC), 1985, 1975 etc etc My impression is that it was easier then.

For example, an uncle mine, now retired, was able to afford on one wage alone, to buy a London terrace house (now rebranded a cottage ;) ) in a reasonable suburb of inner London on a railway workers wage in the 1960's. I dont think the bank of Mum and Dad helped him. I bet a signalmen/train driver cannot do that now

Edited by skomer

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Wow, you're a real progressive aren't you?

Perhaps we could also withdraw voting rights for the oiks too, since that's a relatively new phenomenon?

Just stating a fact. I'm not providing an opinion, that's up to you.

And yes, you are correct, voting rights are a relatively new thing as well, in historical terms.

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Possibly but would be interesting to know the amounts needed in past decades post WW2.

What was the average deposit and wage in 1995 (post previous HPC), 1985, 1975 etc etc My impression is that it was easier then.

For example, an uncle mine, now retired, was able to afford on one wage alone, to buy a London terrace house (now rebranded a cottage ;) ) in a reasonable suburb of inner London on a railway workers wage in the 1960's. I dont think the bank of Mum and Dad helped him. I bet a signalmen/train driver cannot do that now

Which is exactly my point.

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The young aren't losing financially. It is TIME they are losing. This is priceless.

Time spent living with your parents or in houseshares until you are in your late 30s could have been spent raising a family in your own home.

17 years it will take to save for a house deposit according to Halifax. At some point, One must ask oneself, if it will be easier or quicker to wait for house to be inherited. Cruel, wicked thinking, yes, but the harsh reality.

graph.jpg

Not accurate, I just made it up, to illustrate.

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Its not just the first time buyer thats buggered either. I bought a good sized flat for £145k, worked hard now mortgage is under £76k. But to get more floor space the next step in the ladder is around +£80k. I want to do some workshop hobbies so a bit more space would be good, maybe I should save up for a commercial property instead, something 6x6m will probably be cheaper anyway!

So not only is the first rung screwed the second step is too high, far better to stay in a home rather than upsize then downsize, if the ego can take it.

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One must ask oneself, if it will be easier or quicker to wait for house to be inherited. Cruel, wicked thinking, yes, but the harsh reality.

A couple of luxury cruises followed by care home costs may un-stich that strategy* :-(

*Assuming they are not MEW'ed up to the hilt already.

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I had a "fight" with my wife last night. She is trying to help in our efforts to get a house by picking up more work only for me to tell her her that £65 for a day's work was hardly worth bothering with in relation to the sorts of sums needed to buy a house. She was offended to hear that her efforts were worth so little, yet its a good deal higher than NMW.

Soemthing has gone very wrong in this country and its not me or the wife.

I wouldn't say we have fights, but my other half gets really annoyed when I point out the financial hardships we'd have trying to afford a house. It just looks so impossible, we'd be skinning ourselves, no extra money for emergencies or holidays etc. What's the point of living without all that? She's paid off a flat but work prospects are grim so I'd have to pay off any mortgage and do the breadwinner bit (ouch - no problem paying something off but the mortgage would be huge). Doesn't help that she wants a detached house and not a semi. Honestly if it were just me I'd be fine in a semi, or even living in a flat on my own. Sometimes I just want to bugger off out of this country somewhere hot with my job.

The costs are horrendous.

The point about time - too true! Unfortunately my parents don't own and aren't well off so I'm getting nothing - not that I'd EVER wish for something to happen to my parents :(

Unlike some of my friends who will get their mortgages paid off when their parents pop it, and they are just waiting - it has been said! Makes me fume.

I'm still living at home aged 26 and wouldn't mind so much, but it's only a 3-bedder and there's seven of us, and sister has a baby on the way with little chance out moving out. Argh!!

No way I can stay at my girlfriends as too far away from work with the cost of petrol.... (see petrol thread!). But housing closer to work is of much poorer quality and costs so much more. Not a great situation. Out here where my girlfriend stays we couldalmost (by the skin of our teeth) afford a detached house - would be lucky to afford a flat nearer work!)

Edited by guitarman001

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P.S. Just LOOK at those figures for the cost of a home in the article - the 2000 figures REALLY should be about that today, with a little more added on for inflation. It's a scandal that they aren't, a scandal that so many people say prices will never drop back to those levels. They probably wont due to VIs... what do you think? I WISH a home could be bought for under £100k as you used to be able to..

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Possibly but would be interesting to know the amounts needed in past decades post WW2.

What was the average deposit and wage in 1995 (post previous HPC), 1985, 1975 etc etc My impression is that it was easier then.

:

The only one of those dates I recollect is 1985. Prices affordable only with BoMD or substantial double-income and HPI in full swing. And to make it worse than now, the rental market was a whole lot worse: prior to shorthold, the only landlords in the open market were the real professional Heavies. It was the era of Van Hoogstraaten. The shorthold opened the market to landlords who were not actively evil, and it was the coming of accidental landlords with the 1990 HPC that brought decent-quality rentals to the market.

For example, an uncle mine, now retired, was able to afford on one wage alone, to buy a London terrace house (now rebranded a cottage ;) ) in a reasonable suburb of inner London on a railway workers wage in the 1960's. I dont think the bank of Mum and Dad helped him. I bet a signalmen/train driver cannot do that now

I have an idea the era of post-war reconstruction brought that opportunity to many: it was indeed an exceptional (probably unique) time in our history when a generation was offered property ownership. But one has to presume that as with any such idealistic movement, it had its winners and losers, with those who were excluded from the twin bandwagons of home ownership and council houses being all the more marginalised and impoverished.

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Possibly but would be interesting to know the amounts needed in past decades post WW2.

What was the average deposit and wage in 1995 (post previous HPC), 1985, 1975 etc etc My impression is that it was easier then.

For example, an uncle mine, now retired, was able to afford on one wage alone, to buy a London terrace house (now rebranded a cottage ;) ) in a reasonable suburb of inner London on a railway workers wage in the 1960's. I dont think the bank of Mum and Dad helped him. I bet a signalmen/train driver cannot do that now

There is a recent thread here of reminiscences on the WW2 topic. Certainly, buying a house on one income was doable through to the 60s - mums stayed at home.

I read the same article but in the Independent, which points out that 82% of UK areas were 'affordable' (prices less than four times salary) in 2000, and this had diminished to just 6% by 2007.

Disappointingly, the article still keeps talking about 'getting on the ladder'.

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17 years to save up for a deposit to buy a house? :blink: I was hoping about the same time to save up for a whole house :rolleyes: I'll be 50 by then :blink:

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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