Saving for a mortgage deposit now takes a decade, report shows

The time it takes to save for a mortgage deposit in England has hit ten years, having significantly increased over the past decade, according to research by campaign group Generation Rent.

Higher rents and house prices mean it now takes 9.6 years on average to save for a deposit on a mortgage, compared to 6.8 years in 2012.

The region least affected is the North East, where it takes around 4.6 years to save for a deposit – the same as a decade ago. London is the worst affected, taking an extra 4.3 years to save for a deposit, making the average time to save for a deposit 18.3 years – and even then only if the buyer lived in a shared home that whole time.

The time it takes to save is in part because the rent on the median one-bed home across England rose from £495 a month in 2012 to £725 in 2021. This partially offset the rise in the median post-tax salary from £16,823 in 2012 to £21,849 in 2021.

The other major factor is the increase in the price of the average first time buyer home, which rose by 72% between 2012 and 2023 to £253,202.

Generation Rent looked at government data on rents, house prices and salaries to estimate how long it would take the typical single renter to save for a deposit. Assuming that tenants saved 20% of the income they had left after tax, student loan contributions and rent, the median renter nationally could save £2,177 per year in 2012, which rose to £2,630 per year in 2022-23, a rise of 21%.

Because the average ten percent deposit for first time buyers was £14,745 in 2012, it would take 6.8 years of saving to reach that. Now that the deposit is worth £25,320, it would take 9.6 years of saving to reach.

Ben Twomey, director of Generation Rent, said: ‘Most renters dream of owning their home one day, but the struggle to save has got even worse in the past decade. In much of the country, the typical worker faces at least a decade living and saving in the private rented sector before they have a mortgage deposit. That gets close to two decades for Londoners and even then that’s only possible by sharing with other people into their forties.

‘More people are renting from private landlords for longer stretches of their lives, and want a home that allows them to settle down. That’s why we need the measures in the Renters Reform Bill that will stop landlords evicting tenants without a valid reason, drive out criminal landlords and improve the quality of private rented homes.’

Image: Nina Kitaeva