Interactive Investor

First-time buyers face 19-year slog to save a deposit

7th June 2023 11:02

by Alice Guy from interactive investor

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New research from interactive investor shows how hard it is for many young workers to get on the housing ladder. 

A young woman shrugging her shoulders

New research from interactive investor shows that younger workers on an average salary for their age would take 13 years from age 21 to save enough for a 10% deposit on an average-priced house costing £285,000, taking them until 34 years old, assuming they saved 10% of their take-home pay. In contrast, young workers in London on an average wage could take 19 years to save to save enough for a 10% deposit on an average-priced house costing £523,325 and need to wait until they reach 40 to become homeowners.

Younger workers living in areas with cheaper house prices could save up more quickly. In the North East, even though average wages are lower, they could save up in an average of eight years from age 21, meaning they might be able to get their own keys by the time they reach 29.

The 2022 English Housing Survey revealed that the average age for first-time buyers was 33.5 years old in 2022 and 33.8 in London, suggesting that many rely on family help to afford to buy.

Saving for a deposit

Low earners

Middle earner

High earner

In London

In the North East

Amount needed for 10% deposit






Average house price






Wages age 21






Wages age 22 to 29






Wages age 30 to 39






Number of years to save deposit






Age saved enough for 10% deposit






Sources: Commons research briefing on wages by age and region, ONS house price data for March 2023

How the figures were calculated

Average wages for each age group are from the Commons research briefing paper and correct to December 2022. Average wages for regions adjusted using average difference for each region according to commons briefing paper with assumption Londoners earn 1.2 average earnings and those in NE earn 0.9 of average earnings. Average wages for high and low earners were calculated using ONS income figures with assumption that low earners earn 0.7 of average earnings and higher earners earn 1.7 times average earnings – this is equivalent to 20th/80th decile for all earners according to government figures. Savings assume saving 10% of take home pay each year, 5% pension contributions assumed.

Alice Guy,Head of Pensions and Savings at interactive investor, says: “Home ownership is a distant dream for millions of young people who may never be to own their own home. Saving 10% of your take-home pay is a mammoth effort and difficult to sustain for the long haul, with all life’s ups and downs.

“Young people face a stressful juggling act with the triple whammy of high house prices, large student debts and needing to save if they want to start a family. And on top of this, they also need to start saving into their pension if they want to achieve a comfortable retirement in the future.

“For previous generations it was relatively easy to live on beans and toast for a few years, knowing that home ownership would be possible after a few frugal years. But now young people have a long slog ahead and it’s easy for something to trip them up along the way, perhaps a period with lower pay or having children earlier than planned.

“It’s now almost impossible for many young workers to get on to the housing ladder without help from their families, meaning that there’s a widening gap between the haves and the have nots.

“It’s encouraging to see that some lenders are now offering mortgages with lower levels of deposit needed. But most of these mortgages need a guarantor, usually a family member who will step in if you can’t repay your loan. Homeowners will also need to be carefully not to overstretch, especially as house prices are currently falling. If they buy a house on a 100% mortgage and house prices fall, they could end up with negative equity where the mortgage they owe is more than the house is worth.”

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