Despite planning to spend two years saving for their deposit, first time buyers will face a potential shortfall of over GBP5,000 each, according to a report from Alliance & Leicester (A&L).
A&L found that the average first time buyer wants to save a deposit of GBP11,710 – about 8% of the average first time buyer house price – but they are actually saving GBP270 a month for two years, which with interest gives them GBP6,570, leaving a shortfall of GBP5,140.
The UK lender says that first time buyers will either need to save almost double the amount, nearly GBP500 a month, or alternatively they will have to save for longer, around three and half years.
A&L also found that 30% of potential first time buyers are not saving for a deposit at all, despite having aspirations of getting onto the housing ladder in the next two years.
There is a clear mismatch between how much, and for how long first time buyers are willing to save, and their ideal target deposit to buy their first property, said Richard Taylor, head of mortgages at A&L.