Jump to content
House Price Crash Forum

Saving For A Deposit "could Take 31 Years"


Recommended Posts

http://www.dailymail.co.uk/news/article-2071421/Saving-deposit-home-31-years--1993-took-eight.html

Millions of families will have to save for more than 30 years to raise the deposit required to get on to the property ladder, a study reveals today.

The report highlights the crippling impact of high property prices and the demand for large deposits on cash-strapped families.

In 1993, a typical family had to save for eight years to raise a deposit for a mortgage to buy a house. Now they have to save for 31 years.

As a result, many have little or no chance of ever being able to get on to the property ladder, says the Resolution Foundation think-tank.

Its report, published today, highlights how families forced to rent instead are paying such extortionate prices that they have less chance of saving for a deposit.

It shows how they are being ripped off by ruthless lettings agents, an industry which is totally unregulated and has only voluntary codes of conduct.

Rents have rocketed to an all-time high in Britain, which means tenants have less chance of being able to afford to save for a deposit.

The up-front costs of renting a one-bedroom flat – including a deposit, letting agency administration fees and a month’s rent in advance – can total nearly £2,200.

The report considered low to middle-income families bringing in between £12,000 and £42,000 a year.

It established an average of £18,600 and assumed a family with this income saves 5 per cent of it every month to purchase a first-time buyers’ home costing £125,000.

Putting away £930 a year, it would take them 31 years to save the deposit of £28,750 – or 23 per cent of the price of the house – required to get a mortgage.

By this stage, property prices could have climbed even further out of their reach.

‘We need more transparency so tenants at least know what fees they are facing.’

A leading member of the Bank of England has said that many young people will have to wait until they are 44 to buy.

David Miles said he understood ‘most people’ put ‘great value on having a home that they can reliably call home for many years’, but said many will have to bury their dream.

He said: ‘Few people are nomads by choice.’

Mr Miles said: ‘It will take time for first-time buyers to accumulate larger deposits, so they will typically buy later and the share of homeownership will be lower.’

Mr Miles, who sits on the Bank’s interest rate setting committee, is the third leading financial expert to warn of Britain’s falling rates of homeownership.

Paul Smee, director general of the Council of Mortgage Lenders, said recently that many people will spend far longer renting than they had ever imagined.

He said home ownership is an ‘unrealistic assumption’ for many people.

The Housing Minister, Grant Shapps, has pledged to ‘pull out all the stops to help those who want to take their first step onto the property ladder.’

One initiative is to help people who can only afford a five per cent deposit to buy new-build properties.

Yesterday a spokesman for the Department for Communities and Local Government said ‘excessive regulation’ of the private rented sector would push up rents and cut the range of available properties.

Link to post
Share on other sites
I had to save for 1 year, with my girlfriend (now wife) back in 1996. That was a 10% down on a £73k mortgage. Very hard, but in the long run worth it.

Of course shortly after that, the house price was growing faster than anyone could save!

Stupid House Price Bubble!

Link to post
Share on other sites

I love the boomer comments along the lines of "we saved all our money, ate cardboard shavings, no light, no tv, no phone, wiped our arses with leaves, no car and worked 90 hours a week".

They are partly right......they saved money, yes....the burnt cardboard shavings on the fire that was the only form of heating for the house....they had light unless there was a power strike....black and white TV 2 channels if lucky...shared phone lines for the few....wiped arses with tracing paper IZAL... few had cars....worked long hours but 90 hours is a bit of an exaggeration. :P

Link to post
Share on other sites

They are partly right......they saved money, yes....the burnt cardboard shavings on the fire that was the only form of heating for the house....they had light unless there was a power strike....black and white TV 2 channels if lucky...shared phone lines for the few....wiped arses with tracing paper IZAL... few had cars....worked long hours but 90 hours is a bit of an exaggeration. :P

Ahhh good old IZAL, fond memories of the slippery school bog roll :D

Link to post
Share on other sites

Putting away £930 a year, it would take them 31 years to save the deposit of £28,750 – or 23 per cent of the price of the house – required to get a mortgage.

By this stage, property prices could have climbed even further out of their reach.

:lol:

Now, the price of everything else on the other hand... :(

Link to post
Share on other sites

They are partly right......they saved money, yes....the burnt cardboard shavings on the fire that was the only form of heating for the house....they had light unless there was a power strike....black and white TV 2 channels if lucky...shared phone lines for the few....wiped arses with tracing paper IZAL... few had cars....worked long hours but 90 hours is a bit of an exaggeration. :P

While the wife stayed at home to raise the kids, content in the knowledge that securing a mortgage on a 3-bed semi before the husband was 30 did not depend in any way on her earnings.

Link to post
Share on other sites

The Housing Minister, Grant Shapps, has pledged to ‘pull out all the stops to help those who want to take their first step onto the property ladder.’

He will

  • Ban BTL

  • Ban dual home ownership

  • Ban mortages over 3x

  • Jack the BoE rate to 15%

  • Implement LVT

  • Stop Mortgage Relief

  • Eliminate HB

  • Give all future QE directly to all non-homeowners, splitting it evenly between them

  • Ban non-UK residents purchasing property

  • Ban mortgage forbearance

  • Scrap Planning Regulations

  • Sell each of the properties he owns to FTBs at the cost of the construction

  • Confiscate land banks and split them between non-homeowners to encourage building

Link to post
Share on other sites

He will

  • Ban BTL
  • Ban dual home ownership
  • Ban mortages over 3x
  • Jack the BoE rate to 15%
  • Implement LVT
  • Stop Mortgage Relief
  • Eliminate HB
  • Give all future QE directly to all non-homeowners, splitting it evenly between them
  • Ban non-UK residents purchasing property
  • Ban mortgage forbearance
  • Scrap Planning Regulations
  • Sell each of the properties he owns to FTBs at the cost of the construction
  • Confiscate land banks and split them between non-homeowners to encourage building

Ban mortgage securitisation

Limit mortgage terms to 25 years

Ban mortgages that take people above the age of 65

Imprison bankers or mortgage brokers who do not stick to the rules

Seize as the proceeds of crime the properties of people who bought them by lying about their income

Ban right to buy

Ban shared equity

Make house builders submit tenders, to keep prices down

Link to post
Share on other sites

Ban mortgage securitisation

Limit mortgage terms to 25 years

Ban mortgages that take people above the age of 65

Imprison bankers or mortgage brokers who do not stick to the rules

Seize as the proceeds of crime the properties of people who bought them by lying about their income

Ban right to buy

Ban shared equity

Make house builders submit tenders, to keep prices down

Close down the Daily Express

Send NIMBY groups to Jeremy Clarkson

Link to post
Share on other sites

"It established an average of £18,600 and assumed a family with this income saves 5 per cent of it every month to purchase a first-time buyers’ home costing £125,000.

Putting away £930 a year, it would take them 31 years to save the deposit of £28,750 – or 23 per cent of the price of the house – required to get a mortgage."

The actual assumptions and data modelling behind this 31 year headline grabbing statement are a bit suspect. The study sounds a load of sh1te frankly.

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    No registered users viewing this page.

  • 433 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.