First timers have to wait five more years to buy a home

First-time buyers face an extra five-year wait to get on the housing ladder compared to in 2020, as the cost of living crisis destroys their hopes of home ownership.

The average prospective buyer expects that they will be unable to purchase their first home until they are 37 as it now takes nearly eight years to save a sufficient deposit, according to First Direct, a bank.

Back in 2020 a typical first-time buyer got on the housing ladder at the age of 32.

In a survey of 2,000 first-time buyers and homeowners, First Direct found that 86pc of young people see the cost of living crisis as the biggest barrier to home ownership.

Inflation hit another 41-year high in October of 11.1pc. The Office for Budget Responsibility, the Government’s fiscal watchdog, has forecast a 7.1pc drop in real household disposable incomes over two years – the biggest drop since records began in 1956.

More than half (59pc) of prospective first-time buyers said being unable to save for a deposit was a major reason why they had to delay their plans to buy. It now takes seven and a half years to save for the down payment.

As well as struggling to save up a deposit, buyers must also face far higher mortgage rates than they could have secured as recently as September. Major lenders are offering mortgages at rates 50pc more expensive than three months ago.

Chris Pitt, of First Direct, said: “Getting on the property ladder is a distant dream for many today. The rise in house prices relative to incomes is well documented, as is the difficulty in saving for a deposit while at the same time paying rent. The state of the economy will only make this situation worse.”

In 2021, average house prices in England and Wales were 8.92 times the average salary, according to the Office for National Statistics. This was the highest ratio on record and nearly a third higher than the 6.73 ratio recorded 10 years earlier.

Since last year, prices have only climbed higher in relation to wages. Values in September were up by 9.5pc year-on-year. Regular pay rose by only 6pc over the same period – and fell in real terms.