First time buyers struggle to save a deposit

Permalink: First time buyers struggle to save a deposit
by Gill Montia

11% of people saving up for a deposit for their first home confess to taking out funds each month. 19% admit to spending their deposit every couple of months. Even worse, there are 888,000 people dip into their deposit every week.

These figures come from mortgage provider Abbey who commented that it is understandable why so many first time buyers are struggling to get a foot on the property ladder. Many are just unable to save a large enough deposit.

In addition, the Council of Mortgage Lenders produced a report in the summer of 2005, it stated that the majority of first time buyers said a 100% mortgage was they only they could buy the property they wanted.

The average home bought by a first-time buyer costs around £94,000, this means finding a deposit of £9,400. Only 21% of potential buyers have funds of between £6,000 and £11,000 whereas 15% have no funds at all. 25% of people said that by purchasing a property, they were stretching themselves so much that they would have no money to furnish a house.

One in 5 people are relying on financial help from the parents to cover the cost of a deposit and more than one in five are resigned to the fact that they will have to sign up for a 100% mortgage.