The Resolution Foundation have issued a report claiming that it now takes low to middle income households 22 years to save for a mortgage.
The findings claim that in 2001 it would have only taken 8 years, and in 1991 4 years. It is suggested that the increased time it takes to save could be down to lower credit availability from lenders, with many now asking the buyers to stump up as much as 25% deposit. It also claims that homeowners are finding it more difficult to save due to stagnant wages and increased rents.
According to the Resolution Foundation only 63% of households with low to middle incomes own their homes. This compares with 70% 10 years ago. For those under the age of 35, only 34% of low to mid income householders are on the property ladder, compared to 51% in 2006.
Although the figures suggest a downward trend in affordability we mustn’t lose sight of the fact that many individuals simply don’t want to be tied down to a mortgage. The housing dynamic in the UK is shifting with more people choosing to rent for the flexibility and convenience it offers, and the statistics, especially those for the under 35 age bracket, could reflect this.
For those who do want to buy their own property, mortgage lenders are again beginning to provide products with lower deposit options. Additionally, the government’s first time buyer scheme allows those who are eligible, to buy with just a 5% deposit. In both instances it is advisable to speak to a mortgage consultant to find the mortgage deal that is best suited to your circumstances.