Research carried out by housing charity Shelter has revealed some worrying statistics for first time buyers. Rising rents and low wage growth means that young people face challenging choices when saving for a house. Families and single people in particular may need to save for a decade in order to raise enough for a home of their own.
This is partly due to a shortage in affordable homes and means young people today face life-changing choices between starting a family and buying a house – even if they work hard and save every month.
Lower house prices in the north of London means would-be buyers only had to save for four and a half years, while those in London face a decade, going up to a potential 30+ years for singletons in the capital.
The longest waits are likely to occur for families and single people due to their additional situational costs. Across England the average number of years saving was estimated at 11.8 years. The numbers were based on people saving a fifth of discretionary income every month for a house.
Campbell Robb, Shelter’s chief executive has said that these statistics have shown the harsh realities the rent generation have to face due to expensive house prices. He said:
“Imagine a 28-year old couple weighing up their options: they can save for a home now and put off starting a family until they’re 35, or they can start a family now but accept they’ll be renting until their child is a teenager.”
The government have been making attempts to make life easier for first time buyers by increasing 95% loans, launching the Funding for Lending Scheme in 2012 and the Help to Buy scheme in April 2013. Experts are warning however that this latest scheme could stoke a housing bubble, which has the potential to put prices even further out of reach for first-time buyers.
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