The study showed it now takes first-time buyers on average four years and nine months to save a 5 per cent deposit compared to just four years in early 2004.
The research revealed that the average first home is 16.5 per cent more expensive than a year ago while the typical first-time buyer’s income increased by just 0.5 per cent.
In early 2004, an average starter home cost £126,341 with a deposit of £6,317. A year later, this soared to £147,127 with a required deposit of £7,356.
First-time buyers in East Anglia are worst affected where saving for a deposit can take five years or more. Even Scotland, among the least affected areas, has seen the period increase from three-and-a-half years six months ago to three years and nine months now.
Ron Stout, assistant director of PR at Northern Rock, said despite the increase in time taken to save a deposit, the level of first-time buyers has remained “fairly consistent”.
“The percentage of our total gross lending last year that first-time buyers accounted for was 21 per cent – one in five customers. The year before it was 23 percent so it was not a massive decrease,” he said.
Although the situation remains tough for first-time buyers, there may be light at the end of the tunnel. House price inflation has slowed in the past six months and the resulting market slowdown has meant that in some areas, the time taken to save a deposit has stabilised.
This trend could reduce the time required to raise a deposit if it continues to spread across the UK.
