House Doctor: 'How long until I can get on the first rung of the property ladder?


Question: I'm due to graduate with a Masters degree and have been fortunate enough to land a job paying a very decent £35,000 a year.

Given that I don't have much in the way of savings, how long will I have to rent before I can buy? Many of my friends are about to buy and, at 32, I'm wary of being very late to the property ownership game.

John Townsend, Chester

Answer: Earlier this year, housing minister Grant Shapps suggested that the average age of a first-time buyer (FTB) without parental help had crept up to 37 (although it's roughly 29 with help from the so-called Bank of Mum and Dad).

This is sadly no surprise given the sums that need to be amassed for a deposit. According to the Council of Mortgage Lenders, the typical pre-recession deposit hovered at around £12,700 at the start of 2007, but by the second half of last year it had soared to an eye-popping £31,500.

It's no wonder that many FTBs expect to be nearly 40 before they even get on the ladder, a recent survey by Moneysupermarket.com says. Yet housing's hypnotic spell could be about to be broken. In a Halifax report of 8,000 potential FTBs aged between 20 and 45, only a tiny 5 per cent said they were cutting back on their spending to save for a first home.

Two-thirds of likely FTBs now had absolutely no realistic prospect of becoming owners within the next five years and, the report added, did not have a "long-term saving mentality" required for a deposit.

Yet there's no need for you to become a long-term member of "Generation Rent", says Melanie Bien at broker Private Finance."Savings dedication and determination should help you to take steps towards that first rung," she adds.

Most importantly, don't be put off by the current average £31,500 deposit, adds Andy Montlake at broker Coreco. "You don't need to save 25 per cent of your desired property's value; there are plenty of mortgage rates for those with a smaller sum to put down," he says.

For example, if you can muster enough for a 10 per cent deposit, the Yorkshire Bank is offering a three-year fix at 5.99 per cent for a £599 fee.

Alternatively, Santander has a two-year fix at 5.29 per cent with a £495 fee payable upfront. But remember the larger deposit you can save the better deal you'll get.

housedoctor@independent.co.uk

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